Since the second half of the year, factors such as soaring raw material prices, production line shutdowns, successive ceramic tile price increases, and rising warehouse rents have made the ceramic tile wholesale business increasingly difficult.
On the one hand, wholesalers’ operating costs have increased sharply; on the other hand, the increase in OEM orders and the sinking of manufacturer channels have made ceramic tile prices more transparent. Some wholesalers frankly admit that they can still make a profit by selling 300 million yuan a year. Without money, some wholesalers choose to quit and switch to selling seafood...
Rent doubled, ceramic tile prices increased in turn
The operating costs of wholesalers have increased sharply
Like most ceramic wholesalers, Sun Jian (pseudonym) has felt that business has become increasingly difficult this year.
In order to highlight its cost advantage, Sun Jian's business tentacles cover Jiangxi, Fujian, Shandong, Northeast China, Guangxi, Yunnan, Guizhou and other production areas. But even so, the sudden market and policy factors still caught it by surprise.
"Today porcelain tiles will go up by 1 cent, and tomorrow antique prices will go up by 3 cents. Not long after the increase, there will be a new wave of price increase notices."
Since August 10, Sun Jian has successively received price increase notices from ceramic companies in multiple production areas. The rising tide of ceramic tile prices has not subsided, but has risen again and again. "In just one month, some factories have already issued several price increase letters. Now it doesn't matter whether they sell or not. We just need to keep the quantity in order to survive."
"In the past few days alone, we have received new price increase notices almost every day." Sun Jian said that although the single price increase is not high, after several rounds, the increase in some specifications of ceramic tiles has exceeded 10%. Even some manufacturers' 800×800mm antique bricks have increased by 1.2 yuan/piece.
"As a result, our monthly lighting procurement cost has increased by 500,000 yuan, and the overall ceramic tile procurement cost has increased by 30%-40%. Ceramic factories can increase prices based on cost pressure, but we cannot do wholesale. The price may be raised, but you have to absorb this part of the cost. Now you don’t dare to sell new products easily. Once the manufacturer raises the price, there will be no profit. If you put too much pressure, you may not be able to sell it.”
Not only the purchase cost, for most ceramic tilesFor wholesalers, rising warehousing costs have also put a certain amount of pressure on daily operations.
"Our warehouse is located in Foshan, Guangdong. Now it is included in the "Three Olds" renovation area, and the rent has doubled. The rent per square meter has increased from more than 20 yuan to more than 40 yuan, an increase of one More than twice as much. In total, it will cost more than 1 million yuan a year in terms of rent alone." Sun Jian said.
“The supply of goods depends on grabbing, and the price depends on fighting for it”
A ceramic tile wholesaler has switched to selling seafood
Since June, the sales situation of the ceramic industry has taken a turn for the worse, and many production areas have begun to suspend kilns and reduce production.
The subsequent chain reaction is that due to insufficient production capacity, some manufacturers have begun to increase their OEM orders. At the same time, because some production lines in Guangdong mainly produce rock slabs, some conventional products have gradually turned to OEM.
“In the past, we competed with OEMs for supply, but now we have to compete with brand manufacturers. As a result, we have no price advantage and supply will be affected to a certain extent.” Sun Jian said.
At the same time, as ceramic brand channels have further intensified in recent years, even in rural markets, ceramic tile prices have become increasingly transparent.
An interviewee gave an example, "In the early years, when 400×800mm tiles were shipped from the Foshan warehouse, you could earn 3-4 yuan per piece. Now you have to go directly to the factory to pick them up, and the profit per brick is 0.3-0.5 yuan. . In Guangxi, there are even many ceramic tiles from manufacturers in Yunnan, Guizhou and other places, and the ex-factory price is only 13 yuan, which means that the warehouse price brought back from Yunnan is equal to the ex-factory price in Guangxi. ”
The supply of goods at the production end is tight, and the price competition at the sales end is fierce. This situation makes many ceramic tile wholesalers feel difficult.
In Danzhou, Hainan, a wholesaler who has been engaged in the ceramic tile wholesale business for many years decided to quit and switch to selling seafood due to long-term asset-heavy operations and no profit.
“In the past two years, ceramic tiles from Guangdong, Guangxi, Northeast China, Shandong, Hunan, Hebei, Guizhou, Yunnan, Fujian and other places have all flocked to the Hainan market. Locally, they buy whatever is cheap, even small ones. In other places, everyone ships goods by themselves, and wholesale is becoming more and more difficult. It’s not that they don’t want to do it, but they just can’t do it at all,” the above-mentioned wholesaler said helplessly.
Sales of 300 million a year, stillThere’s no money to be made
"This year's operating costs have been increasing, and profits have been declining. It is almost September now, and we have not yet made a profit. It is estimated that the sales will be nearly 300 million a year, and there is still no profit." Sun Jian said , "Now we can't make any money even if we sell 30 million yuan a month. Those who do wholesale like us feel that they are unable to do what they want."
In the opinion of another interviewee, it is indeed difficult for ceramic tile wholesalers to make no profit, but what is even more difficult is that even if there is no profit, they have to bite the bullet and do it. "You can't make money if you do it, and you can't do it if you don't do it. Now I can't collect it even if I want to. There are still nearly 60 million yuan in inventory in the warehouse, so I can only continue to do it.
On the one hand, operating costs are high, and on the other hand, some preferential policies of manufacturers are gradually being cancelled.
“In the past, manufacturers would have corresponding payment policies in the off-season. For example, if you make a payment of 1 million, there will be certain discounts. However, this year due to the increase in prices of raw materials, energy, etc., as well as the increase in OEM orders, these policies have also been cancelled. " Sun Jian said that pressure from many aspects has further squeezed the living space of wholesalers.
In short, "price, supply, and cost" have become the three main challenges faced by wholesalers today. Many ceramic tile wholesalers said that according to the current market situation, there will basically be no turnaround this year.
(Article reproduced from Ceramic Information)
