Cost Rising And Profit Thinning -- Clothing Retailing Industry: Who Is The Backstage Driver Of Raising Prices?

"This year's Autumn dress It's a little expensive. Last year's clothes could still be worn, so there was no hurry to buy them. " Liu Li, a Beijing consumer, said, "now the brands are clothing The styles are updated very quickly, and after a while, it will be much better to wait for the discount. "

In August 4th, China's cotton price index showed that cotton price was 19716 yuan / ton, which has fallen below the 19800 yuan / ton storage price announced in the new year, compared with 31241 yuan per ton in March this year, a decrease of 36.9%. Reporters recently learned that although the price of cotton diving, but the cotton prices are closely related to the price of clothing has not loosened. Many consumers are puzzled that cotton prices have plummeted. Why is the price of autumn clothing still rising this year?

　　 Cotton prices are falling, but autumn clothing is still rising.

At present, the number of autumn clothing in major shopping centers has accounted for more than 7 of the market. "Like spring and summer clothing this year, the autumn market is still early." Beijing contemporary shopping malls salesman said, "compared with the sales volume of new listing last year, the overall decline of 2~3." Judging from the listing of autumn clothing, the number of jackets is more than that of trousers. Take the long sleeved jacket with 100% cotton logo as an example. Last year, the autumn price of fabrics was between 599 yuan and 699 yuan, and this year rose to 699 yuan ~999 yuan. "The price of autumn clothing has increased by 10%~20% over the past year. For example, last year, our newly listed shirts were generally around 200 yuan, and this year is almost 230 yuan. From the price point of view, the increase of trousers is not large, basically unchanged from last year, but the price of jacket is higher. The salesman said.

The salesperson also said that although the sales of autumn clothing are relatively low, but in mid September, with the promotion of Mid Autumn Festival and national day two sessions, autumn wear will usher in a hot season. And the brand has launched Quarterly "limited money" to cater to the consumer's "novelty seeking" and "unique" mentality, and even if the goods are not discounted, sales will go up all the way. In the launch of the "limited edition" clothing cabinet staff, several popular "limited edition" new autumn clothes have been sold out.

　 Rising costs and profit margins

Mr. Li, a fabric supplier in China Textile City, said that the price of cloth this year is still 10% higher than that of last year. "Cotton prices rose too fast last year, and many cotton companies hoarded cotton, causing prices to rise. It is still in the stage of digestion and inventory. "

Ms. Xu, the responsible person of a clothing enterprise, said that the cost of cloth is very small in the price of a garment, and the rising cost of labor and freight is the real reason for the high cost of the enterprise.

Since the beginning of this year, the cost of labor has been rising, labor costs have increased by about 30%, and the increase in oil prices has also increased the transportation costs of enterprises. Nike also said in its latest quarterly earnings report that due to rising oil prices, labor costs and freight rates, the price of footwear and clothing products will begin to increase globally in the spring of 2012.

"Now the garment factories have to increase wages for the workers in order to retain them. Transportation costs, store fees and rents increase at an annual rate of 10 thousand yuan, and all property costs, taxes and fees are allocated to the cost of clothing. According to industry sources, the profit of a garment from factory to sale is around 60%, but in fact, there is not much money to enter the dealer's pocket.

"In order to ensure that Management Profits can only push up the price of clothing. Insiders expressed frustration.

After last year's announcement by many provinces and municipalities to raise the minimum wage standard, the cost of employment of ordinary enterprises is rising rapidly this year. Taking Hangzhou as an example, after the new adjustment in April 1st, the monthly minimum wage rose from 1100 yuan / month last year to 1310 yuan / month, raising 210 yuan, or nearly 20%. This increase has almost become the benchmark for labor costs rising this year.

Fang Changjun, general manager of Hangzhou Ben Xin garment company, has recently begun to stock up autumn and winter down garments. The labor price is 65~120 yuan / piece this year, while the average level last year is 45~80 yuan / piece. The cost of a down jacket with a price tag of 1000 yuan is around 300 yuan. According to this calculation, the labor cost can even account for 1/3 in total cost.

Fang Changjun said that at present, a skilled worker in Hangzhou can earn more than 3000 yuan a month, and in this way, he may not be able to recruit people.

"Some workers simply open a factory in their hometown, do not work, and some skilled technicians are unwilling to sign long-term contracts with the factories. They only do temporary jobs, where they can go to higher prices. Therefore, some small businesses should use them in order not to stop work. Fang Changjun said.

　　 Circulation links up prices

Although raw material prices are rising and labor costs are rising, the most painful price increases of these two manufacturers do not fully cover the digital increase in the price tag of finished garments.

The sales director of a women's clothing counter said that the price tag consumers saw in the mall was often several times the factory price. This is because garments may go through multiple agency sales links from factories to counters. At present, the gross margin of each link is about 15%. Since the agent has to bear the pressure of inventory and enter the store's buckles and all kinds of miscellaneous fees, the agent will increase the purchase price by several times and enter the retail terminal.

In this way, a shirt that went out of the factory but only 30 yuan was transferred to the provincial agent. It may have turned into 40 yuan, and the price has risen to 60 yuan when the agent is sent to the municipal level. However, at what price they will be bought by consumers, it depends on the final retail terminal of these garments. Insiders say that the final price increases will be determined by brand awareness. "The general brand may increase its price by about 5 times (i.e., the price is 6), and the famous brand can even reach 10 times, and the international top brands are as high as dozens of times. In addition, different retail terminals will also affect the rate of increase, for example, the retail prices of general community stores are lower than those of downtown businesses. Finally, the price of this shirt will reach 300 yuan ~700 yuan. {page_break}

　　 Brand clothing companies benefit steadily

Brand clothing companies have benefited from this round of price increases.

In Baoding, an operator who made costume processing for mus barway said: "this brand of clothing has great bargaining power on manufacturing enterprises. Retail prices generally rose by 10%~30% this year, but the cost of processing products they paid to manufacturers did not increase correspondingly. The increase in production costs basically depends on the digestion of production enterprises themselves. They have brand names that determine the value of clothing brands. So they can sell several times or even more than a dozen times in the sales link, so that enterprises can really benefit from the price rise.

　 Faced with the "high prices" in the market, many smart consumers choose to switch to online consumption.

This trend can be verified from the hot data of online clothing sales. According to the data released by Taobao, women's clothing ranks first in the transaction share, accounting for more than 10%. Men's and women's shoes are less than 10. In 2010, the share of women's clothing sold on Taobao reached 38 billion 300 million yuan. And Mcglaughlin and Meng bausa, who specialize in clothing websites, are being touted. The former is listed in the US, and the latter has got 8 digit venture capital.

"If you don't pay attention to brands, tens of dollars and one dress is not uncommon. If you don't pay attention to the season, some brand clothes can also be bought at 3~4 discount price." Consumer Tang Yuan said.

　 Behind these trading figures, a nearly perfect supply chain has been formed.

In addition to the large number of strong network clothing operators have their own cooperative factories, most of the ordinary sales clothing stores are still stocked in traditional wholesale market channels.

It is understood that the factory cost price of 90 yuan for the same dress, the online shop can be priced at 120 yuan, and then shop to sell 190 yuan to dealers in Dongguan. The price of the dress that finally appeared in a shop counter in Dongguan is already over 400 yuan, even if it hits 30 percent off, it will cost 280 yuan. In the case of "storm payment" (the best seller), sometimes a large online shop is equivalent to the shipment of a provincial agent.

Cooperation with online shops has become one of the ways for small and medium-sized manufacturing enterprises to maintain their survival. The pressure of cost increase in production links is greater. In the face of big brand partners, there is no bargaining power. One way out is to speed up their capital turnover.

Even so, clothing sales, which are now less than 200 yuan, are in the best condition.

Fang Changjun disclosed that the increase rate of general brands in the market is 6 times to 10 times, but the average increase rate of online stores is only 1~2.5 times. Therefore, even if the volume of production is fast, the profits of small and medium-sized manufacturing enterprises without scale advantage or brand advantage are still very thin, and the cash flow is very tight.