Wednesday, January 5, 2011

Christmas orders export earnings do not make money

"This order is good, but cannot make any money, now there are foreign traders emergency plus set Christmas products, was anxious nor profit, I have not received a single!" Qiu-Peng in Yiwu international trade city, there are two shops specializing in Christmas tree, Christmas Toys crafts of export processing.

Qiu-Peng said, starting from March, a foreign order, than the last two months in advance. 7-9 months is the Christmas gift this year, the export season, and continued until mid-October. "Foreign sales for Christmas supplies very confident, orders increased by 34%. ”

Compared to last year, this year the European retail holiday sales season ahead into many commodity sales significantly improved. European consumer "money bag" cover was not so tight that China's export business with a direct positive. According to Yiwu Christmas products industry statistics, this year's Christmas products sales volume increased by 30%, far better than last year.

In addition to Christmas products, electronic products such as GPS, smart phone, e-books, games, and cell phone accessories iPad became the best-selling Christmas gift in Europe and America. Domestic electronic product export Enterprise fared in the past. Dongguan d-link electronics factory Gong Chi Fu may also worry about the second half of the enterprises have no business doing, but the next few months, order was, especially Christmas order season in September, the factory outlet also all-time high.

However, despite the order status of surface light and fresh, but many export enterprises. Recent inflation suddenly attacking, cotton and chemical fibre raw material price volatility, resulting in cost is far higher than the price of the order, if agreed upon in accordance with the contract price, performance can only lose. "Make an order not to make money" as many exporters of Yao's pain.

"Used for packaging of cotton material, 60, 70 dollars a m, now risen to over 130; do Christmas tree wire also rose by 30%-40%; rent increases doubled; wages $ an hour last year 4.5, now $ 7 an hour. A year down the busy stiff, you can actually earn the money to the landlord and the material's work. "Qiu-Peng said.

Although at the end of October in the Canton fair, export of Christmas products increased by 15%, but many exporters indicated that the order quotes rise is insufficient to cover the costs, export profits rise it is compressed.

Exchange rate fluctuations also allow exporting enterprises do. "Hard work completed order to settlement period, and catch up with the appreciation of the Renminbi, eat a lot of profit. "Kung-Fu said that the gross profit margin also now works at 2%-3%.

China light industry technology exporters on 45 light industry export enterprises of questionnaire surveys, since June 19, after restart, 45 companies in 35 profit decline occurred. If future RMB 1 percentage point, 45 enterprises will have 20 profit margins decline 3%.

Guangdong Customs that China continues the "Christmas orders" are mostly small and medium-sized enterprises, and even family workshop, resistant to compression of the competitiveness of small and weak, bargaining is not strong, earn low processing fees maintained that when costs, order, or exchange rate fluctuations, not effectively mitigate the risk, narrow profit margins to maintain.

Of course, there is also a part of the proactive exporters and traders a new path, by changing the operating channel and increase productivity, reduce costs and risks.

In Yiwu jewelry businesses concentrate on running their own Xiao Wu in Dunhuang network online trade shop. "I have a jewelry factory. Previously, when the entity shop trading company is over orders, wholesale trade companies to purchaser, purchaser and wholesale to foreign distributors, resellers and then sent to smaller distributors. This way the process is long, thin profit margins. "Now he directly from the global medium and small traders, products from factory direct to retailers, profit more from 20% to 200%. To add a single small single-and short, average single 50 — US $ 100. Although every single modest, but growing single-volume. From the product sent to remittances only needs 7 to 15 days, the basic collection risk does not exist.

For Gong Chi Fu factory, control costs and more effective ways to increase productivity. The "factory of the year did some internal adjustments to optimize production processes to improve efficiency. The original production cycle is 7-10 days, now 5-7 days or so. We also want to gradually reduce production cycle and improve human proportion of production automation level and hopes that these measures may fight rising costs. ”

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