Exploring The Feasibility Of Implementing Reverse Supply Chain Management And Trade-In Programs Within The Stage Lighting Industry

Trade-in strategy

The stage lighting industry has been around for 30 to 40 years. With the continuous development of the market, it has now developed into an industry with an output value of tens of billions of RMB and hundreds of thousands of employees. At present, according to rough statistics, there are more than 1,000 manufacturers in the stage lighting industry, and the number of manufacturers in Guangzhou and its surrounding areas accounts for more than 80% of the total number. Therefore, with the saturation of the market, the growth rate of the industry has slowed down or even stagnated. The competition among lighting companies focuses on competing for the share of existing users rather than developing new users. It can be said that the lighting industry has entered the stock market stage.

Unlike the incremental market (focused on the development of new demand), the competition logic of the stock market is a "zero-sum game." The concept of a zero-sum game means that in the competition, the gains of one party must be at the expense of the losses of the other party, and the total gain of the game is always zero. Its core logic is that the total amount of resources is fixed, and the essence of competition is the distribution of "you lose and I win," and there is no room for win-win cooperation.

In the stock market stage, entrepreneurs in the stage lighting industry face three major challenges, namely, intensified homogeneous competition, rising user retention costs, and higher thresholds for technological innovation. Therefore, how entrepreneurs should choose their product routes and market strategies will become more important. Normally, when facing competition, optimizing products and improving services are common means, but they are relatively slow to take effect in the stock market stage. Therefore, in order to quickly win in the competition, innovation in market models becomes particularly important, and the old-for-new strategy is one of them.

The old-for-new strategy is actually a means of reverse supply chain management. This market strategy has been widely used in industries such as home appliances and automobiles, but it has just started in the stage lighting industry. Let me first introduce the concept of reverse supply chain management to you.

Reverse supply chain management is a management activity that plans, controls, and optimizes the flow of products from the consumer terminal to the initial supply end. Its core goal is to achieve a balance between economic and environmental benefits through efficient recycling, processing, and reuse of resources.

Key steps to trade-in

1. Product acquisition

Product acquisition is the recycling process of lamps. Lighting manufacturers recycle old lamps from customers at a suitable discount price. In the lamp recycling stage, the recycling price of old lamps is crucial. The essence of recycling pricing of trade-in pricing is the combination of "technical evaluation + business strategy." Enterprises need to dynamically adjust the pricing model according to product characteristics and market goals to find the optimal solution between recycling costs and sales conversion.

2. Inspection and sorting

The purpose of inspection and classification is to inspect the quality level of recycled products and to develop appropriate treatment strategies for each product in the reverse supply chain. There are three treatment methods:
(1) Reuse: direct reuse or resale of products;
(2) Product upgrading: repackaging and repairing, restoring, or remanufacturing of products;
(3) Raw material recovery: including dismantling and recycling of accessories. The actual service life of many accessories in stage lighting can reach 5-10 years, so they can be recycled.

3. Reprocessing

Reprocessing means that the lighting manufacturer will refurbish the recycled lamps. The lighting manufacturer will evaluate whether the product still has refurbishment value through inspection results. Through reprocessing at a lower cost, the lamps can be resold. If the cost of reprocessing is higher than the expected profit, the lamps can be restored to raw materials.

4. Distribution and Sales

Distribution and sales refer to the process of reselling refurbished lamps. The sales of second-hand lamps are generally divided into two ways: online and offline. Online sales generally refer to sales through public second-hand trading platforms, which can trade lamps of their own brands and also allow consumers to display and sell lamps from other manufacturers.

Offline sales channels are also divided into two ways: sales by manufacturers themselves and sales by third-party second-hand sales companies. LED lamps that have been used for less than 3 years still have great use value. Manufacturers can sell second-hand lamps to customer groups with lower requirements and price sensitivity according to different customer groups, including domestic third- and fourth-tier rental customer groups and customer groups in small and medium-sized countries in Asia, Africa, and Latin America.

Conclusion

In general, trade-in is a model that takes into account economic, environmental, and consumer needs. If lighting companies can further optimize the evaluation mechanism, process experience, and other aspects, their value will be more fully released. Trade-in is both an environmental protection strategy and a marketing strategy. On the one hand, it can promote the recycling and reuse of resources and reduce environmental pollution; on the other hand, it can stimulate market consumption, accelerate product updates and upgrades, and increase corporate profits. However, studies have shown that the trade-in strategy is more suitable for factories with a certain degree of brand awareness, which can better boost the sales of new products and realize the rapid circulation of second-hand products. It is not recommended for small and medium-sized enterprises with less visibility or just starting out to adopt a trade-in strategy. Therefore, entrepreneurs should make a comprehensive judgment on whether to carry out trade-in activities based on the stage of their own company.