Recently, H&M announced that it will pay for “cancelled completed production orders” and will not negotiate prices for orders placed!
H&M stated that they are well aware that suppliers and their employees are extremely vulnerable in this situation. In the face of all uncertainties, we hope to maintain transparent and clear communication with suppliers and have close and open dialogue on short-term and long-term plans.
It is true that H&M has shown us a responsible and conscientious brand and has taken the lead in setting an example for other retailers. It also gave relief to its suppliers.
But some suppliers are not so lucky. There was once a piece of news saying that due to the bankruptcy of a major customer, the balance of the order could not be received, and the goods had already arrived, but no one cared about them. Textile foreign trade bosses can only travel across mountains and rivers, take high-priced flights, and get back the 1 million goods from bankrupt customers.
The debt payment cycle for overseas customers is getting longer!
At present, whether overseas customers can pay the balance in time has become a big problem hanging in Boss Bu’s heart. “The epidemic abroad is becoming more and more serious, and many stores are closed. In this case, once the customer goes bankrupt, all our funds will be tied to this batch of goods.”
China Silk City Network Editorial Team A survey was conducted at the end of 2019. Many traders said that payments from foreign trade customers were more timely than domestic trade payments, but now the situation is slowly changing. According to a foreign trader, “Our American customer previously paid after shipment.” Payment takes 45-60 days, and the longest will not exceed 90 days. Now there is a phenomenon of requiring payment within 120 days.”
This year’s market is probably based on poor and bleak conditions, and poor market conditions have also led to a lack of funds. The withdrawal cycle is lengthened. Under this situation, textile companies also began to “help themselves”, actively destocking and revitalizing cash flow. But the main problem at present is the lack of money. The entire industry chain is prosperous and suffers losses. End customers are short of funds, which is likely to cause upstream traders and gray fabric factories to be unable to collect the balance. For this reason, a textile company in Zhejiang issued a statement: If the debt period exceeds 90 days from the monthly balance, shipments will be suspended.
Debts are the norm in the textile market, but this piece of cloth is out of cash!
However, when payment in the textile market is delayed again and again, there is a piece of cloth that not only requires cash payment, but also needs to be booked in advance. Even so, it is still “hard to find a piece of fabric”. I believe everyone has guessed it, that is non-woven fabric.
Recently, non-woven fabrics are in short supply, and even if you have money, you can’t buy them in stock. The price has also skyrocketed! This once-neglected medical product suddenly came to the forefront. Seeing the huge profits, many people jumped in. Among them were textile bosses whose orders had been frequently canceled recently, and they began to become “traitors” to earn the price difference. A few days ago, a textile merchandiser spent 50,000/ton to purchase a batch of non-woven fabrics from Shandong, and then sold them at a higher price. He could probably earn around 3,000 per ton. It’s not a problem to make tens of thousands by flipping, it’s simply more exciting than buying stocks!
Because of the recent lack of orders, some fabric bosses are thinking of buying mask machines to produce masks and then sell them to overseas customers. They can basically recoup their costs in half a month.
Manufacturers switch to producing medical protective equipment, but it is not that simple!
Faced with such a hot anti-epidemic supplies industry, “mask machines” are also called “money printing machines”. Now the anti-epidemic supplies industry is also known as one of the most profitable industries. At this time, textile people need to keep a clear head. First of all, if they want to export, manufacturers must have a qualified certificate. To export to EU countries, they must have European Conformity Certification (CE). To export to the United States, they must have a Food and Drug Administration. FDA certification.
If you want to get a formal certificate, it may take six to eight months to complete a complete certification process with many standards. It also misses the best export opportunity.
Manufacturers that have just transformed lack relevant experience, but they want to seize the opportunity and make this wave of money. At this time, many institutions that handle fake certificates have also seen business opportunities, and manufacturers have the same mentality. They have bought mask machines, meltblown fabrics, and non-woven fabrics that are so expensive, and they are just missing the last step. It doesn’t matter if they spend this little money. But even if you spend a lot of money to get this certificate, you can go back and contact the customer, and the customer will see something fishy at a glance. At this time, the transformed manufacturers will lose more than they gain.
Postscript
In today’s special times, it is even more important to establish a good relationship between customers and suppliers. No one wants to default on payment, but as long as there is a problem with the capital chain at one end of the textile industry chain, the upstream companies will also be affected. Under the circumstances of relatively high financial pressure, it is even more necessary to understand and support each other, so as to achieve long-term and stable cooperation.
As for the current hot epidemic prevention supplies industry, the textile market has also come up with the idea of making quick money. However, when entering a new field, capital investment, necessary professional knowledge, and professional certificates are all indispensable. Textile people need to make relevant preparations and predict the future. Finally, the editor can only sigh: 2020 will be easy for no one! </p
