If there was an order of 1 million yuan now, would you dare to take it?
The answer is: …(zi xing nao bu)
The editor heard something recently:
A shoe factory with thousands of employees recently had a large order (about 100,000 pairs of shoes), but the boss did not dare to take it. Because the customer’s required shipping time is before October 15th (the next batch of tariff increases will be on October 15th). According to the normal progress and procedures, the initial proofing and confirmation time will take more than a month, and normal shipments are extremely risky.
Since September, there have been too many topics about the textile market: PTA and MEG have skyrocketed and plummeted, King of Glory has become a hit, bulk inventory has been piled outside the factory, and peripheral weaving factories have reduced production… The market is entering In the so-called “traditional peak season”, there are more orders, but recently the cloth bosses still sigh at the deserted market. When asked if they dare to take a big order, many cloth bosses shook their heads and said: handle it with caution. If you are not careful, you will lose all your money!
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A cloth boss who has just entered the textile industry said: There are many stores in Keqiao, and they will close down because of a big order! So I’m afraid I’ll miss the mark, so I won’t take any big orders so far.
It is true that the current textile enterprises are having a hard time!
Profits shrunk by half, making life difficult for textile bosses! It seems that since this year, the market has been “not prosperous in the peak season and very weak in the off-season”, which makes textile bosses fearful. Although the total market orders have increased during this period, compared with previous years, the total volume is still lower. Many cloth bosses even said that low profits have become another “big worry” in addition to overcapacity. According to relevant data, in the first half of 2019, the 67 major listed companies achieved operating income of 107.52 billion yuan, a year-on-year increase of 0.4%, and a net profit of 7.15 billion yuan, a year-on-year decrease of 15.8%. Both revenue and net profit growth rates were relatively high. There were further declines in 2018 and 2019Q1.
Operating revenue of China’s textile and apparel industry from 2016 to the first half of 2019 (100 million yuan)
From 2016 to the first half of 2019, the net profit of China’s textile and apparel industry (100 million yuan after deduction of non-revenues) has declined in corporate profits of listed companies, let alone those small and medium-sized enterprises. According to the complaint of Mr. Wang, a textile boss in Changshu area, in the second half of the year, in addition to shrinking the company’s order volume, the decline in profits is more troublesome. Mr. Wang, who specializes in workwear fabrics, made a profit of about a hundred yuan per loom in previous years, but this year the maximum is 50 yuan, or even lower. The profit has been cut in half. No wonder he says that life is difficult! This is not an isolated case. According to the profit (loss) change trend chart of the secondary index in the Shengze Monthly Prosperity Index of the Ministry of Commerce, it can be seen that since the fourth quarter of last year, the profits of sample companies have been in a state of decline as a whole. Manufacturers stated that in recent years The costs of raw materials, rent, water, electricity, labor, environmental protection and safety supervision have been rising, and the price of gray fabrics sold has fallen instead of rising, which has directly compressed the profits.
The poor profit situation has directly affected the mentality of textile bosses, and also prompted them to be more cautious when accepting orders. This also leads to the problem mentioned at the beginning that companies now dare not The embarrassing situation of taking a big order.
After procrastinating again and again, the payment for the gray cloth is as fast as the finished product! According to interviews and surveys, when many textile bosses were asked whether they would take large orders, they mentioned two key words: payment and profit, of which payment is the most important factor.
Since the beginning of this year, affected by the economic downturn, the receivables problem that has gradually improved has appeared earlier than in previous years. Some textile bosses rush to customers at the end of every month. In between, ask for payment.
“If we don’t give old customers an extra 1-2 months to pay back their arrears, they may choose others to cooperate, so we can only give in now.” said Mr. Yang, a simulation silk boss in Shengze area. .
It is understood that the general sales model of gray fabrics is that old customers make monthly payments, and new customers take payment to pick up the goods. The sales model of finished products is 30% deposit, and then the payment will be recovered within the agreed time, usually around 1-3 months. , but the receivables situation this year is not ideal. It is said that some cloth bosses with large inventories will relax their requirements on receivables in order to destock as soon as possible.
“Originally, the arrears were settled monthly, but now customers generally owe 2 months or even 3 months, and the arrears for gray fabrics and finished products are almost the same!” Mr. Yang said.
“Large-volume orders generally have low profits, so we can only consider refunding money if the payment is made in a timely manner., then we will consider taking it, otherwise we will still choose to give up. After all, we are also under great pressure. We have to calculate profits, think about how to retain customers, and also consider risk factors. “Mr. Chen, a trader in Keqiao area, said.
Faced with the current complex and changeable market situation, “It is better to lack than to overload” has become the aspiration of many textile cloth bosses. In fact, it is not just Jiangsu and Zhejiang. Considering that the market production capacity is too large, Comprehensive costs have risen, and the pressure on the entire industry chain has increased. Many textile bosses who go to peripheral areas to open factories will also “select” customers. After all, considering that market risks will increase in the future, they still need to “foresight”. Blinded by the big order!
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