There is a saying: This is the best of times and the worst of times.
This sentence is the most appropriate way to describe the current textile market. Although this year’s textile market is full of difficulties, it is not completely hopeless! Do weavers who live in the cracks still have hope? The textile people who have been busy for more than half a year look through the account books in their hands and calculate the profits to see how much is left!
Weaving factory: Even 10% profit can hardly be saved
In Despite the overall unsatisfactory market conditions, many weaving factories have stated that the rent for renting out their factories is more than what they earn after working hard for a year! “Last year, our sales reached 80 million yuan, with a gross profit of 6.32 million yuan. Generally speaking, the industry’s average profit margin is about 10%, but last year’s gross profit margin was 7.9%, which is also a low point in many years.” Boss Bu, who has been working in the textile industry for more than 20 years, said: “In the gross profit of 6.32 million yuan, the company also needs to pay local taxes, sales expenses, logistics expenses, management expenses, and bank interest. After calculation, after excluding these 5 For these expenses, the total profit of the factory last year was more than 400,000 yuan. After paying the corporate income tax, the net profit was only more than 300,000 yuan.”
We all know that textile companies have “big profits but small profits”, especially especially This year is considered the “worst year for the market.” Although the market has improved slightly with the help of the “Golden Nine and Silver Ten”, it still cannot solve the market’s “overcapacity” problem. At present, the inventory of weaving manufacturers in Shengze area is around 37-38 days, which is still at a high level. Destocking is very slow.
The order that the weaving boss has been looking forward to has not been issued as scheduled. The boss of Youbu said: “The recent market situation is so bad. This month, the sales volume of nylon spinning in our factory is actually 0!” Under such circumstances, it is not surprising that there is a phenomenon of selling goods in the market. If not If the goods are sold for cash, there will not be enough cash to buy raw materials, pay wages to workers, etc. “The current quotations are really low. The price of gray fabrics in our factory has dropped by about 30% compared with the beginning of the year. Many of them are sold at a loss, and the price of raw materials has not increased, so the price of cloth will naturally not rise. “A manufacturer specializing in imitation memory said.
“Now we don’t seek profits. As long as there are orders, we will do it. The factory has been open for so many years, but we still have to continue operating. This year, we just want to stabilize the business!” This is the sentiment of most cloth bosses.
Traders: Domestic demand is insufficient, export sales are trapped, orders and profits are reduced by 30%!
Since this year, foreign trade orders have shrunk sharply due to the repeated impact of Sino-US trade relations. “This year’s foreign trade situation is complex and changeable. Our order volume has suddenly been reduced by 1/3. Especially during the off-season of July and August, there are basically no orders to do. Even if there are orders now, they are all calculated in thousands. Last year The 10,000-meter order will be cut in half this year.” A trader in luggage fabrics in Shengze revealed.
Furthermore, because the market was so good in the past two years, many garment factories have a certain amount of inventory, resulting in a reduction in the number and frequency of orders this year. As we all know, Heilan House’s inventory reaches tens of billions! La Chapelle’s inventory is as high as 2.534 billion! The stocks of these well-known clothing brands are so high, you can imagine why they are not in a hurry to place orders.
Both domestic sales and foreign trade have encountered Waterloo. Although traders this year There is not as much inventory pressure as a physical business, but orders have shrunk and profits have shrunk by nearly 30%! Fortunately, Sino-US trade has eased recently, market confidence is slowly recovering, and foreign trade has also relaxed. Orders that should be placed will still be placed one after another.
Editor’s note
There are still two months left before 2019, regardless of whether the market is good or not this year This is the worst year, and every boss must be mentally prepared. If you continue to follow the old path of producing conventional products, you will no longer be able to meet the requirements of this market. Whether this year is a dilemma or a hope, the key lies in Boss Bu himself. </p
