tian zeming, who is already a corporate executive and understands business logic better than most people, has not mastered the "instructions" of shared power banks. after becoming an agent for just over half a year, he decided to sue the brand along with other agents.

in the eyes of many people, shared power banks were once an excellent business - small investment, low threshold, quick return on investment, no maintenance, and pure profit in the later stage. encouraged by brand sales, many ordinary people with some spare money poured into this market, hoping to get a piece of the pie. however, as the market became more and more saturated, this industry gradually became like a piece of over-cultivated land. not only did it become more difficult for latecomers to make money, but they could also become the ones who were harvested if they were not careful.

"leeks" is a self-deprecating name given by some agents. in the process of operation, they realized that there are traps of all sizes hidden under the illusion of asset-light entrepreneurship. tian zeming attributed these traps to the brand side, "i didn't expect such a big company to cheat us and set traps for agents continuously."

from the promise of cash flow during the early stage of docking to the chaos during the laying process, tian zeming found that the cash flow did not match the sales promise at all after the laying was completed and put into operation. he realized that the payback period mentioned by the sales was a pure theoretical calculation without considering the actual situation. based on the current cash flow, he estimated that the cost would not be recovered in 3 or 4 years.

among the agents, tian zeming's experience is obviously not an isolated case. the traps that agents have fallen into are also varied. recently, sina technology reported that agents in many places are preparing to jointly sue monster charging. these agents have invested millions of yuan in purchasing equipment and after-sales installation services, but the installation was unfinished, resulting in large-scale disconnection of equipment and serious investment losses.

the risks are passed on layer by layer. brands directly sell and transfer to agents, making money from franchisees. franchisors and brands struggling in the internal competition have pushed up the price of shared power banks, making them "assassins" that consumers cannot afford. at present, 2-3 yuan/hour is already a regular price, and the price in some popular areas has even increased to 10 yuan/hour or more.

shared power banks, the survivors of the sharing economy, are now facing declining profits, market competition, and intensified conflicts. they are no longer a good business.

tempting good business

strong demand, small investment, low threshold, and pure profit, this perfect business is the gimmick used by shared power bank brands and sales, and is also the reason why most agents are attracted and choose to enter the market.

judging from the payback period alone, compared with joining a coffee or milk tea franchise, joining a shared power bank franchise does pay back much faster. even for luckin coffee, which has become the number one in the coffee industry, the payback period for franchisees is 15-18 months or even longer, while shared power bank sales say that it only takes 6 months to pay back, and the more radical figure is 3 months.

this is not groundless.

chen wenjin, a small agent in guangdong, was a regional manager of a shared power bank company before 2021, specializing in formulating store plans and sorting out store lists. at that time, he could see real-time backend turnover data every day, and the daily turnover of almost all projects could reach more than 1,000 yuan. in particular, an agent he was personally responsible for invested 200,000 yuan in the early stage, and the investment was fully recovered in 3 months. after that, the daily turnover was stabilized at more than 3,000 yuan.

this made chen wenjin think about quitting his job and starting his own business. at that time, the shared power bank industry was at its peak, and monster power, the "first shared power bank stock", was successfully listed that year. however, in chen wenjin's company, the business was constantly adjusted. he and his team were asked to leave the old battlefield where they had been working for a long time and transfer to a new city, which also meant that they had to start from scratch with a basic salary.

therefore, chen wenjin, who had first-hand business resources, decided not to work for brands anymore. he and half of his team members resigned and set up their own business as agents.

in 2021, chen wenjin spent 500,000 yuan to buy hundreds of devices at once. as he had been dealing with merchants for several years, the process of changing his identity was very smooth. chen wenjin, who claimed to understand the "industry mechanism", completed the installation of all the equipment in just two weeks and recovered the investment as scheduled in three months.

the "chen wenjin" narrative has been widely circulated among the salespeople of shared power banks, and has been renamed, exaggerated, and re-circulated. low cost, zero threshold, and high returns have become the labels of the shared power bank industry, attracting more and more people to join.

compared to joining a "tea brand", the entry threshold for shared power banks is much lower. lin yuxing, a luckin agent in jinan, told mirror that the total cost of opening a luckin store is nearly one million, not to mention other costs such as subsequent store operations and labor costs. in contrast, the agents of shared power banks are much more affordable. according to the lowest agent threshold, the cheapest 6-hole cabinet is 1,200 yuan/unit, with a minimum purchase of 10 units, and a total investment of only more than 10,000 yuan.

● power banks placed on the streets of qingdao. image source: visual china

tian zeming was also attracted by the narrative of shared power banks. as a corporate executive, he had some savings and was looking for some investment opportunities.

at the beginning of this year, he was repeatedly pushed advertisements for shared power banks on short video platforms. each video promoted the idea of ​​low investment and quick returns, with a payback period of only 6-8 months. the attractive figures and success stories in the advertisements made him excited. with a try-it-out mentality, he clicked on the advertisement link and filled in his contact information on the page that popped up.

tian zeming soon received a friend request from a local sales bd. during the first call, the sales bd spent two hours telling him how profitable this business was. according to the salesperson, the average daily turnover of each device could reach 3.3 yuan. if 3,000 units were purchased, the monthly turnover would reach 300,000 yuan.

in order to dispel his doubts, in the next half month, the salesperson also sent him screenshots of the backend data of other channel dealers. tian zeming also did some calculations himself and found that if he used the amount in the screenshot, he could indeed get his investment back within a year.

"it's ok to take a little money to test it." after a quick calculation, tian zeming, who earns 3 million yuan a year, felt that half a year's salary was within his budget. so he took out a bonus of 2 million yuan and bought 3,000 shared power bank cabinets. since he had no experience in offline promotion, the salesperson also promised that the company would provide supporting promotion services and that the company had a special team to help tian zeming complete the installation.

light capital, light operation, stable income, everything seemed to be in good order. but in a place that tian zeming did not see, the bubble of the sharing economy began to burst ahead of schedule.one piece of evidence is that from 2021 to 2022 when the industry was on the rise, monster charging suffered losses of 125 million yuan and 711 million yuan respectively. it was not until 2023 when it transformed into an agency franchise model on a large scale that monster achieved full-year profitability for the first time.

the influx of agents has jointly supported the booming industry and helped brands bear costs and risks.

in chen wenjin's opinion, "most agents don't understand the 'mechanism'. for example, self-employed business owners or novices doing side jobs may not be able to recover their investment for a year or two." chen wenjin sees it very clearly, "they think that if they put out the equipment and someone uses it, they will make money directly. the sales will not take the initiative to raise many follow-up issues. they will only tell you that if you buy our equipment, you can just go and install it."

soon, tian zeming faced the seven-day acceptance deadline of the installation team. after actually starting the operation, he realized that things were not as simple as the sales promised.

traps one after another

the reality is that commitment turns into a costly trap.

faced with the task of laying out 3,000 devices, tian zeming, who had no experience in field promotion, had to rely on the helper team. the helper team said that if they wanted to lay out all the devices within a month, the helper fee for each device would be 210 yuan, which would total 600,000 yuan. although he was a little hesitant, tian zeming still accepted it, as he felt that it was a necessary initial investment.

but when the team arrived in shenzhen, they suddenly asked to rent 13 five-seater cars, two people per car, and also to put equipment. this made tian zeming feel uncomfortable, because these fees had never been mentioned by the salesperson before. he contacted the previous salesperson, hoping to get an explanation, but the salesperson was just vague and said that he could give him a discount on the laying fee as a consolation. at this time, tian zeming began to feel that something was wrong, but the equipment had already been bought, so he had to bite the bullet and continue to pay.

at the end of the month, he spent nearly 200,000 yuan on car rental, gas, parking fees and other miscellaneous expenses.

when the time came, the laying team left shenzhen, and at this time, various problems began to emerge one by one. tian zeming found that two or even more devices were placed at the same point. although he had emphasized that the increase in the number of devices required prior approval, in fact, most of the repeated placements did not have his consent. in order to save trouble, the laying team was lazy and placed more equipment at one point. for each additional device placed, they could charge an extra 210 yuan.

what’s worse is that the promised daily average turnover of 3.3 yuan was not achieved. for a period of time after the laying was completed, tian zeming found that the turnover at many points continued to be lower than expected. only during the 7-day acceptance period after the laying was completed did these devices barely meet the standards. once the acceptance period was over, the equipment either had no turnover or was directly cut off by the merchant due to low rental rates. tian zeming even suspected that the team behind the laying had manipulated the data in the background to get away with it and get the balance.

● multiple brands of shared power banks are displayed in the bookstore. image source: visual china

only then did tian zeming realize that the seven-day acceptance period and the promise of waiver of final payment that were solemnly promised before the sales were probably just bait to attract agents to join.

this so-called "voluntary concession" clause was cleverly packaged in the contract, allowing the company to be exempted from paying the remaining half of the balance if performance did not meet the target or the two parties failed to reach an agreement. in the end, tian zeming did not pay the 300,000 yuan fee, but the brand refused to give him the backend authority to adjust the share, resulting in all income flowing to the cooperating merchants. it was not until he continued to complain and put pressure on his superiors that he got the authority back.

for large agents like tian zeming, the subsequent operating costs are relatively high. he needs to rent a warehouse to store idle equipment and equipment that needs to be repaired, and hire someone to be responsible for daily operations and maintenance. each item costs 30,000 to 40,000 yuan per month, which adds up to more than half of the turnover. for small agents like chen wenjin, who only have a few hundred devices, although they only need to hire 1-2 employees, the monthly labor costs also cost thousands of yuan.

not only do agents have to deal with a constant stream of issues, but they also have to frequently sign updated "supplementary agreements.""the new content is imposed and is beneficial to the brand." chen wenjin explained helplessly that he was fined several thousand yuan every month for the loss of power banks. the content about who will bear the loss of the power bank did not appear in the formal contract, but was added in the subsequent supplementary agreement.

like chen wenjin, tian zeming also has to pay thousands of yuan in fines for lost power banks every month. in the previous supplementary agreement, the brand's compensation for power banks was priced at 80 yuan, which means that agents need to pay a fine of 80 yuan per power bank. if the power bank is found later, the money will be returned. however, the supplementary agreement was changed again later, lowering the price to 68 yuan. this means that even if the merchant initially paid a fine of 80 yuan, it could only receive a refund of 68 yuan in the end, and each power bank that was lost and found would lose 12 yuan.

this time, tian zeming was unwilling to sign. however, he applied for the replacement process, but the product was not shipped for three months on the grounds that he had not signed the supplementary agreement.

the absence of bao in the charging pile means that the agent's income will also decline. chen wenjin also encountered the same problem. the previous application process for bao can be completed in 3 or 4 days, but once it was delayed. faced with hundreds of yuan in losses every day and constant complaints from shops, chen wenjin followed the application process and found the brand employee who had not passed the review. he tried various ways to communicate with him, but found that all contact methods were blocked by the other party. later, he found out that this so-called internal employee was also a local agent. after all the trouble, the delivery took a full three weeks.

in the absence of rechargeable batteries, chen wenjin, who could not find any other solution, followed the employees to run all over the city. however, chen wenjin found that many machines that showed full warehouses on the mini program were broken, or the power banks could not be ejected, or the machines were too dirty. as a result, after running around, they only received less than 10 power banks.

in the internal competition

although the equipment is purchased by themselves, the agents are stuck in the game of profit distribution, with brands above and merchants below, and cannot make any money.the limited high-quality locations and shops are the winners who take the biggest share of the profits.

there are two common cooperation models between agents and merchants. one is the admission fee model for high-quality locations with large traffic such as ktvs and convenience stores, where the agent pays the merchant a monthly fee as agreed, but the fee is not affected by turnover. the other is the more common profit-sharing model, where the agent shares the actual monthly turnover with the merchant in an agreed proportion.

as more and more players enter the market, locations have become a scarce resource, and merchants have therefore gained greater voice.

different shops are divided into grades according to their ability to "attract money". high-volume shops are divided into top shops and mid-level shops, while low-volume shops are not directly within the scope of agents. however, good locations and high-volume shops are scarce. if you want to grab those golden spots from other agents, you need to give merchants more attractive prices.

mirror learned that oscar, the largest ktv in jinan, has signed an exclusive agreement with xiaodian, which stipulates that xiaodian pays 30,000 yuan per month as an entrance fee, which is not affected by the turnover. previously, china entrepreneur also reported that the entrance fee of a certain amusement park alone is more than 700,000 yuan, and it is paid annually.

for the mid-level merchants, chen wenjin usually gives 70% of the profits on a monthly basis. for the hard-earned top stores, chen wenjin is even more generous, usually signing an annual contract directly and raising the share ratio to 80%-85%. after deducting the 10% share that is fixed and handed over to the brand, chen wenjin can only pocket a small fraction of 5%.

● shared power banks are randomly placed at the entrance of the bar. image source: visual china

convenience stores with monthly turnover of thousands of yuan are the most competitive. once, tian zeming's team found that a device placed at the door of a convenience store was missing during a maintenance visit. in just a few months, the same situation happened 18 times.

tian zeming retrieved the surveillance footage at the police station and discovered that it was an employee of the direct sales team who took the equipment. when questioned by the police, he explained that if the equipment was disconnected for seven days, they could be taken away directly. these 18 locations were in the same situation and returned to the direct sales team for similar reasons. they brought in new agents and set up the locations again. in tian zeming's management backend, the original merchant's contact number was also updated to the new agent's number.

chen wenjin previously had a chain hotel location with an annual revenue of more than 100,000 yuan, which he regarded as a high-profit store. however, at the end of 2022, this location was taken back by the local direct-operated team on the grounds of internal competition for the location. what is even more troublesome is that the total revenue of more than 120,000 yuan that month was also confiscated by the direct-operated team.

in chen wenjin's opinion, they had worked hard to negotiate for this store, they had invested in the equipment and paid for it themselves, so it should be their location. but at that time, monster had just launched the "win-win situation between direct sales and agents" (win-win situation between direct sales and agents), and the management was not clear. the contract for the store that chen wenjin had negotiated for belonged to the backstage of the direct sales team, which became the reason for the direct sales team to take the location away.

chen wenjin tried to appeal to the higher authorities, but the supervisory officer gave the reason that he was competing with the direct sales team for locations. the supervisory officer did not mediate, but only said that the fine could be counted as a pre-purchase payment for future equipment. but for chen wenjin, who had already made back his investment, he did not need to buy new equipment, and the fine was eventually dropped.

in addition to the direct sales team scrambling for locations, the brand's cooperative installation team also verbally promised the merchants high commissions and monthly rental fees in order to complete the task faster, and all of this was done secretly without tian zeming being aware of it. the installation team verbally promised the merchants 90% of the commission, and if the distribution was based on this ratio, the agents would not earn a penny.

only after the agents have paid the final payment for the installation and passed the acceptance, they are eligible to change the profit sharing ratio. when tian zeming wanted to squeeze out some profits and renegotiate the profit sharing ratio with the merchants, some of them did not believe tian zeming because they could find agents who could give high profits and continue to cooperate. there were even dozens of merchants who directly complained about the agents and brand fraud. they finally chose to terminate the cooperation and remove the machines, which also meant that the installation costs previously invested by tian zeming were wasted.

this non-standard business operation is not limited to a single brand, but is a common phenomenon among multiple brands in the industry.the agents who kept pouring in were harvested over and over again. after the brands handed over the pricing power to the agents, in order to make money, the prices of shared power banks for consumers also rose steadily.

many agents believe that modifying pricing is already a consensus in the industry. obtaining high-quality sites is often accompanied by high entry fees or a larger commission ratio. agents need to raise prices to ensure their own profit margins, so price increases have become the only way to recoup their investment.

in chen wenjin's view, there are many "tricks" hidden in the shared power bank industry that are unknown to outsiders. those who can really make money are often those internal employees who are familiar with the profit mechanism, or those former employees who have left and are familiar with the industry rules. for those novices who lack field maintenance experience and do not know how to gain an advantage in the competition, even if they work hard to lay out the equipment, they may only end up facing a pile of power banks that no one cares about and have run out of power.

(all interviewees in this article are pseudonyms)