A cautionary tale!An order of 5 million has destroyed more than 10 textile and garment factories.

Textile Mill

For an order of 5 million, the buyer asked four trading companies.The trading company asked 8 raw material factories, the raw material factories asked 16 raw material suppliers and 16 processing plants.Now business is not good, so many competitors, nervous, anxious eyes, bargaining.

Spinning Mill

There is no lowest price, only lower!

Find a few more bargaining, bargaining!

Finally, the order was received, the price was low, the profit disappeared, the quality discounted, the product quality inspection unqualified, the payment was not given, the factory closed!

In business, a proper comparison is fine
But not in order to receive orders,
Lost price, quality, service, profit
No matter what industry
How can we survive without profit and how can we be strong without quality

Doing Business in 2020

If you can’t keep the profit, you will die

If you can’t keep the price, you will die

A low price war is a dead end

The cost of doing business has skyrocketed

1. Two years, environmental protection rectification led to the price of various raw materials skyrocketed several rounds, the raw material cost of processing plants rose, the profit as thin as a blade.Starting from 2019, the second round of central environmental supervision will be launched again, and the whole country will be under strict supervision for four years!The situation is more serious!

2. China’s national tax “replacing business tax with value-added tax”, the original reasonable tax avoidance is illegal, formal enterprises have to add tax costs, business tax increased by 3% to 17%!

3. If all prices go up, labor costs will have to go up. Otherwise, labor costs will not be enough for living expenses.

Under this kind of environment, if the product can not keep the price, the peer also engage in vicious price war, that is to commit suicide!Do you think you can beat the other side if you bite the bullet and grab the client?

Textile Mill

Vicious competition is everywhere, maintain quality is the king

For manufacturers, low profit and high turnover is a commercial means, but in the chemical industry, there has been a vicious price war competition.

Bad competition will inevitably lead to vicious consequences:

Starve counterparts

In the same area, for example, there are 20 several chemical companies of the same type, and the same region in 20 several buyers need chemicals, if there is a chemical enterprise with the lowest price done 15 products buyers, the remaining 19 chemical enterprise is only five, don’t get the order it directly to starve to death.Over time, the market is disrupted.

Dead tired oneself

The chemical company, which receives orders at rock-bottom prices, is delighted, of course, and is working feverishly day and night to meet deadlines, place orders and arrange deliveries.

Behind this seeming prosperity, are companies really having a good time?To the end of a reckoning, in addition to the wages of workers, rent, utilities, logistics, telephone, all kinds of fines and so on, work hard for a year, in the end there are only three melon two jujube, is not as good as others to earn more, why bother?

“Buyers are never as smart as sellers,” the jargon goes, and a growing number of business executives have recently complained that competition from low prices has disrupted the normal order of the industry.”No matter what the product, there is always a lower price.No matter how low the price is offered by downstream users, someone will always take the order.”From a production point of view, these prices do not guarantee a profit margin, and if they can do it, they must be cutting corners on raw materials and workmanship.”In the long run, the healthy development of the industry is bound to be threatened.

Garment Company

Pit dead the owner

The buyer thought to take a big advantage, but did not know that the most cry is their own.We often hear complaints from various customers, but they have no idea that the cost of raw materials is rising seriously and the cost of all aspects remains high. What kind of high-quality chemical raw materials can we buy at such a low price?Covetousness ultimately damages one’s own vital interests.

It damages the interests of customers, damages the reputation of the industry, and causes the public to question the products of the industry. In the end, it is only oneself that suffers the consequences!

“Rob other people’s single, cut off own road!”

Chemical companies that accept orders at low prices only value immediate benefits, but seemingly forced individual choices are endangering the healthy development of the whole industry.This business model won’t last long, and it will turn out to be a dead end, so please those who want to destroy the competitors at a low price, think again!


Business Director at Shanghai Fumao Clothing Co.,LTD

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