College Student Sock Owners Suffer From "Cotton Inflation"

News background

This is a group of college students Entrepreneurship sample 。

They didn't know that there were peak and low sales seasons for their products. They couldn't open their mouths when they went out to the market. However, the roaring hosiery machine is weaving their entrepreneurial dreams 24 hours a day

In 2009, our newspaper reported that dozens of college students started their businesses in Liaoyuan Northeast Socks Industrial Park (hereinafter referred to as "Socks Park"). More than a year later, the soft cotton market and the steel needle of capital appeared, and college student entrepreneurs were hit by the soaring cotton prices for the first time. This group did not appear to be unbearable, but it was doomed to be not a "smooth road" before their eyes.

Needle hidden in cotton!

Recently, cotton prices are rising and falling, and students in Liaoyuan Socks Industry Park Entrepreneurship group It's winter. To make matters worse, logistics and labor costs rose at the same time. How can they cope?

With the promotion of the "external super zone" of the sock industry park, college students under the crisis began to differentiate. How do they consider their own future?

At 20:00 on November 19, He Xinpeng was alone in a pile of semi-finished socks, looking at the computer screen in the office of the snowman socks industry. Although the cotton price has dropped in recent days, this kind of unprecedented increase has made him very bottomless.

"Proletarians" start their businesses with 100% debt

"For me, whose family's economic condition is not good, I am grateful for everything provided by Sox Park."

Sox Park is located in Liaoyuan Development Zone. College students in Sox Park like to say they are proletarians.

At the beginning of 2009, Tian Zhongjun, the chairman of Socks Park, provided a platform for college students who wanted to start a business but had no conditions. The park provides each college student entrepreneur with 10 hosiery machines worth 230000 to 450000 yuan, and provides each person with 200000 yuan of working capital, all of which are guaranteed by the park, and apply to the bank for low interest loans or national discount loans. The entrepreneurs need to pay off in three years.

At the same time, Sox Park provides 300 to 500 square meters of factory buildings for each college student entrepreneurial team, free of rent in the first year, and 50% and 30% rent reduction in the second and third years respectively. Accommodation and early training practice are provided by the park.

He Xinpeng, who graduated from Changchun University and came from rural Hebei Province, was one of the first college students to settle in the sock garden. "For me, whose family's economic condition is not good, I am grateful for everything provided by Sox Park." He Xinpeng said, but because he has to repay the loan and the sock factory has a great demand for cash consumption, he has considerable pressure.

Wang Qiushi, He Xinpeng's partner, said: "Everyone who went to school knows that the debt ratio of enterprises cannot be too high, but we are special because we have a debt ratio of 100% and every penny is borrowed."

He Xinpeng's sock factory is called Snowman sock industry. He, Wang Qiushi and Wang Yu opened it together. With 30 sock machines and working capital, the enterprise was indebted more than 1.5 million yuan at the beginning of its establishment.

Now, the sock factories of the second and third batch of college students' entrepreneurs have also been opened, and 124 college students have set up 73 enterprises in the sock park.

Running during the day, taking the train at night

Wang Yingxin always takes his girlfriend with him when he runs away from customers, because after being rejected, the two of them just talk and smile, so they won't be particularly embarrassed.

College students' sock factories are mostly concentrated in buildings 6 and 7 of the park. Early in the morning of November 20, the two buildings that were originally bustling became strangely quiet. Hosiery machines and sewing machines stopped. Only a few workers and college students were cleaning the site.

"Last night, there was a fire inspection, and a large sock factory (due to potential safety hazards) was fined 50000 yuan, so now all college students' factories have stopped. It is said that the inspection will be carried out by the end of December. If the production is stopped for one day, he will have to pay more than 1000 yuan inside and outside." He Xinpeng complained while packing cotton thread and bobbins stacked everywhere into paper cases.

"How can we compensate so much?" Wang Qiushi, who is repairing the air suction pipe, comforted him, "Even if we wake up after the inspection, there are many combustibles everywhere. It's no good to have no safety awareness."

"Worry." He Xinpeng, with a worried face, walked around the empty workshop.

Next door to the snowman sock industry is a sock factory run by two female college students. "In the past year, many problems have been encountered for the first time." Liu Bing, the boss of college students, checked various power supplies in the workshop and locked the door before talking to reporters. When they first came here, college students did not know that there was a slack season for sock production. They always wanted to wear socks all the year round. In fact, cotton socks are in the off-season from July to September every year, so it is necessary to adjust the production rhythm and strategy, otherwise the cash flow may be sluggish.

"I'm a bit of a backer. When I just opened, it was in the off-season. The hosiery machine here was still whirring, and no socks could be sold there." Wang Yingxin, a graduate of Yanbian University, said that he was the second batch of college students to start their own businesses in September 2009.

Every batch of college students who start their own businesses have experienced this process: the socks produced are not sold in the right way, the machines are poorly adjusted, and there are many secondary socks (inferior products) produced. They can't open their mouths when they go to the market, and they don't know what to say.

When the reporter saw Zhang timeout, he was "poking" the hosiery machine with "security" (hosiery machine maintenance worker). For the third batch of him who entered the park, Wang Yingxin's statement resonated with him. "My socks have been running steadily for more than a month, but the socks that can be woven are always defective, either wide or narrow, and the reason has not yet been found. Even in the peak season of socks sales, it is difficult to spare energy to run the market."

The market of college students' enterprises spreads all over the country, from Changchun, Harbin and Shenyang to Xinjiang and Guangzhou. For them, running the market is a headache.

Most college students go out to run the market and are unwilling to pay for food, shelter or cars. To this end, Wang Qiushi summarized several tips, such as trying to run to customers in the daytime and taking the train to another city in the evening, because this can save money on hotel accommodation. Wang Yingxin, however, had some experience in ticket evasion, but was still afraid of being caught.

"It's nothing to be bitter, just afraid of being rejected when running away from customers." Wang Yingxin always took his girlfriend with him when running away from customers at the beginning, because after being rejected, the two people passed away with a smile, so they were not particularly embarrassed.

Most students live in the dormitories provided by Sock Garden, and live a monotonous life of canteen workshop dormitory, or simply live in the workshop like He Xinpeng, saving everything.

"Don't be afraid of hardship. The key is that the competition in this industry is fierce. Now there are some big enterprises in the sock garden complaining that college students have robbed the market because of low costs." A college student said that the market is so small, and three years later, many preferential tax and rent measures for college students will disappear.

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The pain of cotton swelling

The average profit of each pair of socks has been reduced to 15 cents, and the logistics and labor costs have also increased dramatically.

Data shows that on November 11, ordinary cotton yarn was quoted at 48000 yuan/ton, while in August and September two months ago, ordinary cotton yarn was quoted at 26000 yuan/ton.

"Cotton has gone up too much, and the profit margin of cotton socks has been compressed a lot." He Xinpeng is the only one among the students who pays attention to the price of cotton futures. In September this year, he told Liu Bing that cotton still had to go up.

How much did the cotton boom cut the profit of socks? College students answered differently because of different products.

Shi Lei and Feng Lin of Allen Socks are a couple. They calculated a bill for the reporter. The cost of socks has a formula: the weight of a pair of socks × the price of cotton yarn per gram+0.65 yuan or about 0.7 yuan of late fees (including rent, water and electricity, and personnel expenses).

"Calculated, if the cotton yarn is 26000 yuan per ton, the cost of a pair of 30g female socks is about 1.43 yuan, while the wholesale price at that time is about 1.7 yuan per pair or more, and the profit of each pair of socks is about 0.3 yuan." Shi Lei held a pair of cotton socks and kept pressing a calculator. "The current cotton yarn is 46000 yuan/ton, and the cost of a pair of female socks has risen to 2.03 yuan. Even if the wholesale price has risen to 2.2 yuan per pair, the profit is only 17 cents. With the loss of socks, the average profit of each pair of socks has been reduced to 15 cents." Shi Lei is not very satisfied with the result on the calculator.

This year, in addition to the soaring price of raw materials, other production costs have also increased to varying degrees. Wang Yingxin said that since he opened his business, the electricity charge has risen from 0.83 yuan/kWh to 0.86 yuan/kWh, with an annual increase of 4000~5000 yuan. Freight has increased even more. In the short run, the price of logistics delivery to Changchun has increased from 5 yuan to 10 yuan, the logistics cost of Shenyang has increased from 10 yuan to 20 yuan, and the cost of delivery to Beijing has increased from 20 yuan to 40 yuan. Sent to Changzhou, Jiangsu, from 50 to 60 yuan/piece, up to about 80 yuan/piece and 130 yuan/piece. The sock factory sends goods every few days, which adds thousands of yuan to the annual cost.

What worries Wang Yingxin more is that in the past year, the labor wage has risen sharply. Previously, the car stopping workers were 1500 or 1600 yuan, but now they need 1800 or 1900 yuan. As a mature worker, the monthly salary of the head seamer has increased from 1800 yuan and 1900 yuan to 2200 yuan, and the best head seamer can get about 3000 yuan. Wang Yingxin's Montex stockings industry has a total of 20 single needle barrel looms and 3 head sewing machines. Since the production is carried out in three shifts around the clock, 21 blocking workers, 16 head sewing workers, two sub packers and a workshop director are employed. The monthly labor wage expenditure is nearly 80000 yuan.

"Sox Park's salary is high in Liaoyuan, and even such people are not easy to recruit. We only offer ourselves 1500 yuan." Zhong Qicai, Wang Yingxin's partner, said while pasting a notice on the glass of the workshop corridor to recruit people to stop cars, sew heads and turn over boards.

Substitute raw materials appear

In addition to changing the pattern, sock owners began to use tail yarn, or changed pure cotton yarn into polyester cotton or simply cotton free polyester and spandex.

It is difficult for the ex factory wholesale price of socks to keep up with the soaring pace of cotton prices. In September, some enterprises in the sock park set up a price adjustment committee to control the price of socks and avoid "killing each other". The chairman of the committee is Xian Changhai, the chairman of Cheng Xiang, a large enterprise in sock industry.

"I also participated in Uncle Xian's committee, but the effect was not obvious." He Xinpeng felt that the organization was not mature and the voice was not enough.

"The socks produced by college students are basically low-end products, which are worn by ordinary people. If the price increase is too harsh, the wholesalers will not accept it." Liu Bing believes that the price problem should be solved slowly.

Huang Liguo, a researcher in the textile industry of Wall Consulting, recently conducted a detailed survey of downstream enterprises on the rise of cotton prices. He told reporters that small enterprises do not have strong bargaining power and pricing power. It is a universal truth that the rising tide makes the ship soar, but the transmission of the industrial chain takes time. Under the background that the cotton price is about to double in just two months, the survival status of enterprises is still very poor. If the raw material reserves are exhausted, they may face losses.

"The college students haven't heard about the loss for the time being, because they usually still have the stock of raw materials purchased below 30000 yuan, and they have also thought of many other ways to deal with it." Wang Yingxin said, for example, changing the pattern of socks, because the color and pattern of socks have a significant impact on sales, for example, the Guangzhou Asian Games has significantly changed the pattern of socks needed in Guangdong, The cartoon female socks he produced are also selling well this off-season. The profit of each pair of socks in Wang Yingxin's factory can still be kept at about 0.3 yuan. The annual income of 10 hosiery machines is between 100000 and 120000 yuan. The annual income of 10 hosiery machines of other college students has been reduced to less than 100000 yuan. Some of them are only 50000 yuan, which is better than going to work.

Among the "other methods" mentioned by Wang Yingxin, the more important one is to use alternative raw materials of cotton yarn.

"I have been making colored yarn recently. This material is much cheaper than cotton yarn, and it also has color, which is more suitable for female socks." Liu Bing said that colored yarn, in fact, is a substandard product eliminated in large spinning mills, also called tail yarn, which is treated at a low price after being dyed. "However, this kind of yarn is very popular and is not easy to get," said Liu Bing.

In addition to tail yarn, many university student enterprises have changed pure cotton yarn into polyester cotton or polyester and spandex without cotton at the same time of consuming cheap raw materials. A college student told the reporter: "The price of polyester is only 17000 yuan/ton, and the socks woven are also of good appearance. Now college students have basically not imported cotton yarn at a high price for production."

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However, even with substitutes, life is not always easy. "The price of polyester is also rising, because cotton yarn is the leader of textile materials." He Xinpeng said that in August, the purchase price of polyester was still 11500 yuan per ton, while in October, the price of polyester was 13200 yuan per ton. At present, the price of polyester is 17000 yuan per ton.

Liaoyuan was rated as the "Hometown of Cotton Socks" in China in 2008. "Pure cotton, hand sewing" is the characteristic of Liaoyuan socks. It may not be a long-term solution to use a large number of alternative materials.

Worried things happen

Cotton prices began to fall sharply, and some wholesalers asked for a reduction in the wholesale price of socks.

On the evening of November 20, Premier Wen Jiabao presided over the executive meeting of the State Council, which decided to increase the export of raw cotton from Xinjiang. By the end of November, Urumqi Railway Bureau had transported 500000 tons of cotton, an increase of 5.1% over the same period last year. The price of futures Zheng Mian began to fall sharply, and He Xinpeng thought it was very good.

But Wang Yingxin felt that it was not good for the price of cotton yarn to fall too fast, because it was hard to raise the price of socks. Now the price of cotton is falling very fast, and the wholesalers will discuss with the manufacturers the possibility of not increasing or even reducing the price.

On the spot market on November 27, the price of commodity cotton (tertiary cotton) in the national cotton trading market fell from the highest 34560 yuan/ton on November 10 to the current 25000 yuan/ton, a drop of 27.7% in 18 days.

According to Xinhua News Agency, the main fund of cotton futures at the end of October was about 3.2 billion yuan. By the end of November, the scale of main funds had been reduced to about 1.2 billion yuan.

Wang Yingxin's concern finally emerged, and some wholesalers demanded that the wholesale price of socks be reduced. "The increase of socks was not enough before. It is estimated that the price can still hold for a while, but it is difficult to increase the price, but it is easy to fall down. We have no pricing power." He Xinpeng sighed.

According to Huang Liguo's research results, the downstream industry is happy to see that the price of raw materials does not fluctuate significantly. Because even if the price of cotton yarn is 100000 yuan per ton, if it is stable in this area for a long time, the price of socks at the terminal will naturally rise, and consumers will have time to digest it. On the contrary, a sharp rise or fall is not good for downstream enterprises. Such fluctuations will encourage speculation, which is not conducive to the orderly storage of raw materials by enterprises.

Game "outside super zone"

College students have the opportunity to "step up".

"To make progress together, we don't want the best, we just want to do well." Many college students posted inspirational slogans in workshops or offices, and when dealing with difficulties, they thought more about how to become bigger.

Liu Bing and Liu Yanhui are building a sales network. Liu Bing even "established" a general agent of "contented sock industry" in his hometown of Henan. Her classmates are all over the country, and they are very supportive of Liu Bing's business, so she thinks there is a lot of room for the future. "I plan to launch several hosiery machines next year. I must have my own brand and sales network."

Some college students also believe that it is unrealistic to set up brands and sales networks at present, because a lot of capital and manpower are needed, and many large enterprises dare not touch these things.

Like college students, the park is also planning its own development path.

Li Xiufen, director of the Human Resources Department of the park, said that the park had recently proposed a strategy called "1+10+N" model. "1" refers to brands and leading enterprises, and "10" refers to cultivating processing enterprises, mainly providing processing for foreign trade and supermarket orders of leading enterprises. Each leading enterprise plans to allocate about 10 processing enterprises, mainly imported hosiery machines, and each processing enterprise is equipped with about 50 hosiery machines.

This provides college students with the opportunity to "step up", because college students enterprises can use the existing preferential policies to be included in the plan. The college students who signed up for the program said that they would go to the "Outer Super Zone".

From cooperation to solo flight

He Xinpeng thought of the "Outer Super Zone" to pursue greater development, but his partners felt that the pace was too big. Wang Yingxin returned to his hometown of Shandong to speculate on garlic in the slack season of cotton socks this year, and also earned a lot.

The plan to go to the "Outer Super Zone" has changed the existing pattern.

According to the earliest planning of the park, in order to spread risks and enhance resistance, college students' enterprises mostly focus on cooperation. Compare the "three brothers" model of Xinpeng, Wang Qiushi and Wang Yu, the "two sisters" model of Liu Bing and Liu Yanhui, and the "mom and pop shop" model of Shi Lei and Feng Lin. Now, some people start to fly alone.

"I have become independent, and I will go to the" Waichao District "in the future." Although I am still in a workshop, He Xinpeng's 10 hosiery machines have started independent business accounting. The reason for solo flight is not emotional disharmony, but differences in business philosophy.

"If He Xinpeng goes to the 'Outer Super Zone', he will be a big boss with tens of millions of dollars, which is absolutely different from now." Wang Qiushi points to He Xinpeng's 10 machines and says with a smile.

He told the reporter that according to the idea of the park, the condition for entering the "Outer Super Zone" is that you must use 150 thousand to 17 thousand sets of Italian hosiery machines. If each family has 50 sets, the equipment cost seven or eight million yuan, plus 3 million working capital, the debt will exceed 10 million yuan. In Wang Qiushi's opinion, this step is a little big. He hopes to repay more loans first, reduce the debt ratio, buy hosiery machines bit by bit, and then seek breakthroughs.

However, in He Xinpeng's opinion, the current scale does not mean much, and he believes that the planning prospect of the park is good, and giving up this opportunity will delay time.

Wang Yingxin also signed up to go to the "Waichao District" to work alone, but he was not as optimistic as He Xinpeng. "There is a lot of uncertainty. Although the Italian hosiery machine is advanced and durable, the single machine price is too expensive, and the production cost of the product is too high. Should socks be sold for 10 yuan a pair?" Wang Yingxin also worries that many foreign trade enterprises have closed down because of the appreciation of the RMB and the bad economic environment abroad. Will this situation eventually improve?

Wang Yingxin felt that the sock factory could only earn some hard money, but could not make a big fortune. Therefore, in the off-season this year, he even returned to his hometown of Shandong to speculate on garlic, and earned a lot. However, if he can make money steadily, Wang Yingxin still hopes to become a big sock factory.

When it comes to development, Wang Qiushi regrets that he did not accept the shareholding scheme proposed by Sox Park at the beginning. "Although Sox Park accounts for 51%, if we go public, will our wealth also increase several times?" Wang Qiushi asked reporters.

Reporter's notes: green dream of boss

The park is Entrepreneurship Forty five percent of college students have prepared a dormitory for four people, which is divided into male and female buildings. The lights are off at 10 o'clock.

The smell of smelly feet in the men's dormitory is coming. "University bosses" are obviously used to this environment. The bed railings were hung with underpants and socks, and lunch boxes, thermos bottles, and toiletries were placed disorderly on the windowsill. There are many sneakers and slippers under the bed. Like college dormitories, few people make quilts here.

There is a canteen in the industrial park, which is full of all kinds of snacks, including spicy hot soup, ramen noodles, rice noodles, and rice noodles. It doesn't matter if you miss the meal. At least one or two stalls in the canteen will provide stir fry before 9 p.m. A meal can be basically settled at 5 yuan. College students' bosses usually rush back to the workshop after eating in a hurry.

A large shopping mall has just opened near Sox Park, and the video game machine in it has become a little fun for many entrepreneurs.

Half of college students' entrepreneurs come from rural areas. One of the most popular words they say is that it's better to go home now than to plant land, not to mention being their own boss. People who are far away from home can receive phone calls from their parents every week. Many people want to connect their parents with them after they have a firm foothold.

They look very green, but their thinking is more active than the big bosses in the park, which is also an important reason why the park values them.

A leader of Sox Park said that the college students are too large, and the ability of Sox Park is limited compared with it. But if everyone sticks to it bit by bit, there will always be unexpected gains.