Recently, there is a common phenomenon in the textile market. The same piece of cloth, if it is two cents more expensive, may not be sold no matter how much you sell it. If it is two cents cheaper, the supply will exceed the supply.
In order to ship goods, factories have no choice but to “bear the humiliation and bear the heavy burden”. Therefore, many factories are full when they start up, and cloth is shipped out one by one. In the end, they are so busy that they can’t make a few hard-earned money.
Is there any way to break the low profit situation?
The most direct reason for low profits from selling cloth is overcapacity, insufficient overseas demand, and slow domestic demand growth. However, at the same time, peripheral production capacity is still growing rapidly, supply is increasing, and demand is decreasing. It is indeed difficult to avoid excess production capacity.
Boss Youbu asked, can I create profits by improving my technical level? Of course, companies with technological advantages can sell their products at higher prices, but the market is so busy now, and everyone knows that improving technology can increase added value, so everyone does this. According to the 80/20 rule, there are still only a limited number of companies that truly have a leading edge in technology. In the end, everyone’s technology has improved, and the fabrics produced have higher technical content, but this still does not change the reality of overcapacity. It is still too expensive and no one buys it. Of course, it is not useless to improve technology. After all, in this era, if technology cannot keep up, you will accidentally fall behind. Enterprises improve technology in order to gain a chance to survive.
Inventory “bottomless pit”
According to the above statement, the current market simply does not have the space to consume so much production capacity. However, we have seen that even if the market supply exceeds demand, as long as the goods supplied are cheap enough, they will still sell as much as they want. Why is this?
This has to be said about the new fabric spot supermarkets that have emerged in the past two years. In the past, a small weaving factory had an order of one or two million meters, which was already an exaggeration. The cash flow pressure can crush the factory, but now the fabric spot supermarket Supermarkets, even smaller ones, can stock hundreds or even thousands of colors for a single specification of fabric. Smaller colors can be stocked for several thousand meters, and some common colors can be stocked for hundreds of thousands of meters. In this way, a single specification can be at least several million meters. of inventory.
Larger fabric spot supermarkets have a bottomless pit of pressed fabrics.
Fabric spot supermarkets are now springing up like mushrooms after a rain. They can buy large quantities of low-priced gray fabrics in the market. As long as the price is low enough, they can eat as much as they have, and then use their large size to negotiate business with dyeing factories and obtain Cost advantage.
Of course, the disadvantages of this model are also obvious. It requires enough money. However, at this time, money has become cheaper.
The new industrial pattern is accelerating the formation of
On June 20, the central bank authorized the National Interbank Funding Center to announce the latest loan market quotation rate (LPR): 1yearLPR is 3.55% span>, down 10 basis points from the previous value; 5maturity and above LPR was 4.2%, a decrease of 10 basis points from the previous value .
In the past few years, the country’s loan interest rates have been falling repeatedly, and some local governments have provided preferential policies for business operations. This is definitely good news for some industries that require a large amount of funds.
Take the fabric spot supermarket as an example. They also use loans to buy cloth worth 100 million yuan. If the interest rate is 5%, then the capital cost of these cloths is one year 500ten thousand, if the interest rate is 3%, the cost of capital becomes 300 Ten thousand, if the interest rate becomes lower in the future, the cost of funds will be further reduced.
It is foreseeable that as capital costs become lower and lower, there will be more and more fabric spot supermarkets in the future, with more and more complete categories, and the number of fabrics in stock will become more and more exaggerated.
Cloth prices will still be difficult to rise in the future
This means that even if the market improves in the future, it will be difficult for cloth prices to rise. For example, the usual price of a piece of cloth is 1rice 2 yuan, and supermarkets take advantage of the bargain price 1.8 span>I just came in. In the future, the market will improve, and the price will rise to 2.2 yuan, to 1.8 Cloth collected in Yuan can also be sold for 2 Yuan, and if the cost of raw materials rises due to good market conditions at that time, the price can even be cheaper than the cost. Therefore, except for some niche products, it will be difficult for most cloth products to be profitable in the future.
In fact, it is not just the textile industry. After many manufacturing industries develop to a certain level, there will be a similar situation of large shipments but no profits. However, in the textile industry, the hoarding of fabric spot supermarkets has become a problem.�The emergence of large inventories of products has exacerbated this phenomenon, flattening the supply and demand curve.
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