1: Raw material cost. The cost of raw materials, also known as the cost of raw materials required for the cutting edge, includes the cost of raw materials and is most directly reflected in the procurement of diamonds and metal powders. Raw material costs often account for more than 50% of the cutting edge price.
2: Production management costs. The price difference between the management costs of large factories and small factories is significant, mainly due to several differences:
- Quality control differences: Large factories often do better quality testing in order to control the quality of the blade, while most small factories do not have such conditions.
- Difference in after-sales service: Large factories often provide after-sales service for products with quality problems, while small factories often do not make claims.
- Management personnel: The management of large factories is relatively standardized. If there is a problem, the relevant responsible person can be directly found, while small factories often cannot track down the responsible person, so there are often problematic blade heads, and similar problems will occur next time.
3: Reasonable profits. Pursuing profits is a prerequisite for the healthy development of an enterprise. Talent, equipment, research and development, and innovation all require a large amount of capital investment. In 2022, the gross profit of the diamond cutting head industry will remain around 5-25%. The larger the manufacturer, the higher the profit point, while the smaller the manufacturer, the very low the profit point. This leads to small manufacturers struggling to survive in long-term development without the possibility of further development.
4: Brand added value. This is also some value that only large factories have, and the added value is often slightly higher than other brands.
