The profit model of foreign retailers is mainly "eat the difference", that is, by expanding the scale of outlets and increasing the sales scale, suppliers are forced to reduce the purchase price, and by compressing costs and expenses, the difference between the purchase price and the retail price is obtained to achieve the purpose of profit.

Comparatively speaking, Gome and Suning emphasize the profit model of "eating suppliers" on the basis of "eating the price difference", that is, by expanding the scale of outlets, maintaining the low-price preferential market strategy for consumers and continuously improving the market influence of their channel terminals. On this basis, by increasing their own sales scale and increasing the absolute sales volume and purchase volume of products, suppliers are coerced to increase rebates and pay more channel fees.

The profit sources and composition of the two companies are the best evidence.

The announcement shows that from 200/kloc-0 to 2004, the profits of other businesses of Suning Appliance and Gome increased rapidly with the growth of their main business income, and the growth rate was much higher than that of their main business income: Gome's other business profits increased by 249.33% in 2002, which was 3.5 1 times of its main business income; By 2004, although the profit growth rate of Gome's other businesses had dropped to 64.5%, it was still 1.83 times the income growth rate of its main business. In 2002, the profit growth rate of other businesses of Suning Appliance was as high as 529.2 1%, which was 4.73 times the income growth rate of its main business. In 2004, the profit growth rate of other businesses of Suning Appliance reached 125.68%, which was 2.46 times the income growth rate of its main business.

At the same time, other business profits have become the main source of profits for Gome and Suning. The announcement shows that from 200/kloc-0 to 2004, Gome's other business profits accounted for more than100% of its net profit; Since 2003, Suning Appliance's other business profits have also accounted for more than 100% of its net profit. This means that if there is no profit from other businesses, the two companies are actually losing money.