Run &Nbsp At High Risk; What Profits Do Businesses Make?

The near future

Nevertheless, in communication, enterprises also say optimistically that the cotton price issue is an external environmental factor. There are risks and opportunities. The key is whether enterprises can grasp them.

In addition to keeping a close watch on the trend of cotton prices and finding the right time with many years of experience, the profit point of enterprises also comes from its long-term foundation, as Yang Bin, manager of Zhicheng weaving factory in Xintang, Guangdong, said: "no matter what the price is.

Avoiding time difference brings profit difference.

When the reporter talked about the cotton price trend with the enterprises, most enterprises indicated that cotton prices still had room to fall, but prices had gradually stabilized.

Despite years of experience, enterprises have a certain ability to judge the cotton price trend, but when faced with a sudden change in the industry environment in the short term, they usually adopt a more conservative approach, using Fujian Zhonghe

But he also said that this practice is only suitable for the use list.

"At this stage, the enterprise can make the price according to the price of the cotton yarn at that stage, and the cotton yarn is basically not in stock, so ordering yarn with order quantity is relatively safe."

Chen Fengyu said, "when the enterprise is inside the list, it has already contacted the cotton yarn factory, and the price is ultimately determined by the cotton yarn price on which the customer pays the deposit."

That is to say, after the price rises or falls, the profits of the enterprises can be guaranteed.

But Chen Fengyu said that the operation mode of the outer sheet can not be similar, because the cycle of the internal single sheet is usually around 45 days ~60 days, and the export price has been finalized several months ago or even half a year ago. Because of the problem of liquidity, most enterprises will not prepare cotton yarn at one time, so in this time difference, the fabric enterprise will bear certain risk of raw material price.

In the face of the sharp fluctuations in raw material prices in a short time, the conservative practice adopted by most enterprises appears to be relatively passive. In fact, this is also a manifestation of risk manipulation ability. Moreover, enterprises are optimistic to see market opportunities. Judging from many years of experience, the market is on the one hand. On the other hand, enterprises can quickly capture the general trend of raw materials from various channels.

"As far as the current market situation is concerned, the cotton mill is afraid that prices will continue to fall and not dare to stock up. Basically, how many cotton yarns can be supplied, and the downstream customers of the enterprises do not have large quantities of orders."

Chen Fengyu said, "in fact, not only are fabric enterprises, but all enterprises in the chain of textile industry are very sensitive to raw material prices. It is precisely because everyone's wait-and-see mood has not loosened. Therefore, enterprises have to choose fewer stocks and receive short lists to avoid risks, but at the same time, they also tighten nerves and hope to seize opportunities in difficulties."

Low cost plates into popular product selling point

Consumer recognition of cotton fabrics is deep-rooted. Although clothing brands will consider cost considerations, T/C cloth is used instead of pure cotton cloth to control the price to a certain extent. However, this practice tends to keep the cost, but it is difficult to guarantee the sales volume of the market.

"Cotton polyester blended or other new type of cotton and cotton blended cowboy fabric, after repeated washing, the dimensional stability and feel are not as good as cotton fabric."

Yang Bin, manager of Zhicheng weaving factory in Xintang, Guangdong, said, "for the time being, the blending effect of Tencel and cotton is the most ideal, but the cost is high, and most clothing brands are unlikely to be selected."

Although some clothing brands can not choose cotton and polyester blended denim for cost consideration, but in Yang Bin's view, in fact, enterprises have a more ingenious way of doing things. At the moment, some brands are practicing, that is, converting low cost products into market selling points, and from the perspective of enterprises in recent years, the style of cowboy fabrics has undergone great changes.

Even ordinary consumers can feel that they are different from the cowboy fabrics which are very popular in previous years. In the past two years, cowboy fabrics in the market are mostly soft and light, and the finishing of denim fabric is relatively few. For example, the processing of mercerizing, clothing and other deep processing has almost disappeared.

"This is the concept that clothing brands are changing consumers. At this stage, the concept of cowboy products is comfortable, ancient and ecological."

Yang Bin said, "it is different from changing the raw materials to reduce costs, instilling consumers' different product style concepts, and skillfully converting low cost into market selling points."

In fact, as early as the international financial crisis in 2008, foreign denim fabrics had already shown this trend.

Yang Bin said that domestic cowboy fabrics were still popular with a strong glossy texture and thick texture. But since last year, because of the soaring price of cotton yarn, the domestic cowboy fabric has begun to keep up with the international trend. The concise, soft and light denim fabric has been gradually accepted by consumers in the country.

Long term strategic alliances carry each other's profit risk

"In May, the business really felt very difficult. At present, the situation is slightly better."

Yang Bin said, "the price of fabric is about 2 yuan per meter, but the order of customers in autumn and winter is still reluctant to come down."

Nevertheless, Yang Bin still saw the profit growth point of enterprises, that is, cooperation with downstream brand customers.

In his view, the overall export situation of the fabric industry is weak this year, and domestic sales growth is also weak. Only the cooperation with the clothing brands can clearly see the growth of profits.

"Because clothing brands have to guarantee the price of goods and ensure the quality of products, enterprises have established long-term cooperative relations with them. Even though everyone is watching, the final order will not be less, but the price will be more or less."

When the price of cotton yarn is high, the downstream customers help digest part of the cost. On the contrary, when the price of cotton yarn goes down, the fabric enterprises also yield part of the profits. In Yang Bin's view, these are the performance of long-term strategic alliances to advance and retreat and shoulder the risk of the market.

Establishing long-term and stable strategic alliance with customers is not a matter of a single day, but through the efforts of these years, enterprises have already tasted a lot of "sweetness".

"In the face of the financial crisis, the rise in cotton prices and the fall in the current cotton prices, the advantages of the strategic alliance have been fully demonstrated."

Yang Bin analysis said, "at this stage, many small and medium enterprises are not able to go on. The reason is that besides the advantage of low price, these enterprises have no other foundation of their own, and can not afford the huge fluctuations in raw material prices."

Yang Bin said that the next step is to deepen cooperation with customers at home and abroad, that is, continue to improve the "one-stop shopping" mode of enterprises.

"At present, we are making product development for our customers in 2012, following the concept of extension and deep development."

Yang Bin explained, "that is to say, we undertake the development project of a quarter of a customer.

On the premise of accurately understanding the needs of customers, we provide a complete plan for the customers with a trend of raw materials and washing and finishing.

This is to establish a solid strategic alliance with the brand customers, and of course is the biggest competitive advantage of the enterprises.