Everyone knows that business in China’s foreign trade industry is extremely hot now, with orders flying in like snowflakes. The trade surplus expanded nearly 7 times in the first quarter, creating a history.
If you are interested, you can check the specific data online. Behind this historic number is the result of the hard work of countless small and medium-sized enterprises. This is also The main characteristics of my country’s manufacturing industry, but what you may not know is that on the other side of the busy scene, many business owners say that business is becoming increasingly difficult to do now.
Almost all companies are facing severe shortages of raw materials, skyrocketing prices, rising exchange rates, container shortages, and route congestion. Business risks are becoming increasingly high. .
It is easy to “freeze to death” if you take an order, and you will “starve to death” if you don’t take an order. Whether you can make money in a business depends entirely on luck. Good or bad. Practitioners generally said that this was very abnormal. They worked hard until the end, only to find out that they didn’t make much money and that they were working for Americans for free.
Why is this?
Because despite the large number of orders, overseas demand is strong, but soaring raw material or shipping costs may eat up the small profits at any time.
“Profits are really too thin, especially this year!”
A person engaged in A boss in the textile industry lamented, “Last year, corporate profit margins were still 10%, but now they are only 2%.” In his view, no matter which factor it is, the most fundamental reason for the huge loss of profits can be attributed to the four words “unpredictability”.
Yes, unpredictable!
The prices of various raw materials are increasing, and the fluctuation range is extremely large, and companies are taking risks when doing business.
So many people ask, why don’t companies increase prices?
“Our contract prices are all based on the quotation when signing the contract. We cannot say that because the cost has increased now, we can tell the customer to increase the price. No. This is the way to do business!” The business owner said excitedly, “So no matter how much the cost is increased, the company can only bear it by itself. It is good to earn less. Sometimes we will lose money. When the price is uncontrollable, some orders are made by us. Maybe I just choose not to take it.”
In addition, the main reason why Chinese companies do not raise prices is because they dare not, because the business owners are not united. If prices increase, foreign customers will immediately look for new companies.
The embarrassing reality is that despite so many years of development, most enterprises in our country are still in “low value-added” industries, with low technical content, low product profits, It is highly substitutable and its main competitive advantage lies in low labor costs.
So, despite the fact that the entire foreign trade industry is in full swing, they are actually working for foreigners for free.
In recent years, China’s labor costs and land costs have risen rapidly, causing many companies to cry out that they cannot bear it. This year’s surge in raw material prices and freight prices has directly swallowed up the What should I do if I lose the final profit?
Industrial upgrading does not exist. Enterprises simply do not have the ability and do not know how to upgrade. They have moved to India, Vietnam, Cambodia, Myanmar and other Southeast Asian countries to open factories in order to Reducing cost pressure has almost become the only way out.
But there may still be a long way to go before all these labor-intensive industries are transferred to third world countries. As the boss said, “Sooner or later, they will have to move, but the industrial chains in these countries are not yet fully mature. It will take at least ten years for the industrial chains to move south, so there is no need to worry about the southward migration of the industrial chains.”
Another set of data is that China’s manufacturing industry accounts for less than 30% of the economy, indicating that companies are disappearing.
Many Chinese people are quite angry about this, but in fact, what should be more worried about than these business owners who still have a way out is the employment of workers, etc. Ten years later, when all the companies have moved away, what will the workers do?
Are they ready?
Now I work for foreigners for free and I still have food to eat, but what about in the future? No one can answer these questions, only time is left to resolve them.
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