Raw material prices have skyrocketed across the board! Sellers: Costs have increased by 50%, making it hard to make money...

Copper prices are rising! Steel prices are rising! Paper prices are rising! Tire prices are rising! Chemical prices are rising! Fertilizer prices are rising! In a word, raw materials are skyrocketing ... "The factory has been open for 20 years, and this is the first time the price of raw materials has increased so much that he is questioning his life." With this wave of price increases, what changes will occur in the profits and sales of cross-border sellers? Some sellers have said that their costs have directly increased by 50%.

Rising prices! News of rising raw material prices continues to flood the screen

“In January, we asked you to stock up, but you said the increase was impossible and only 3%;

We asked you to stock up in early February, and you said the price would go down in March and April, but in the end, it went up another 3%;

I asked you to prepare the stock at the end of February, and you asked me if the price will go up again? I told you, the notice has come down, and the price will go up another 3-4%! "

After the holiday, the fund fell like a dog, and the raw materials rose to the sky. The editor opened the circle of friends casually, and the information about the price increase of various raw materials came to him.

The price has gone up like crazy! Last year, when the factory started operation, I bought brass strips for 36,000. Yesterday, the price I inquired about was 67,500.

The price of raw materials has risen so horribly that the deposit paid at the end of last year is no longer valid.

The price of plasticizers has skyrocketed by more than 3,000 per ton. I can’t quote any price anymore. This year has been really miserable.

Inquiry reply: We will quote you after you confirm your order. Currently the price changes three times a day .

The price has gone up so much that it is really difficult to adjust the price for customers.

The price of raw materials for our mobile phone cases has increased by 5,000.

The materials factory hasn’t even started working yet, but a notice about price increase has already been sent to us.

The prices of all materials have increased, and our price increase covers more than the number of orders.

It is understood that amid the chorus of price increases, many companies have issued price increase letters one after another, and the furniture, home appliance, electronics, textile and tire industries are no exception!

A rubber factory issued a notice saying: "Due to the high prices of raw materials, after careful consideration, the company plans to adjust the price of the company's PCR products on March 1, 2021, with an increase of 2% to 5%. The specific price adjustment will be subject to the company's official price adjustment document."

One factory issued a notice saying: "Due to the recent fluctuations in labor costs and raw material prices, and the continuous increase in the overall operating costs of the factory, our company plans to increase the price of motorcycle tires/electric bicycle tires RE products by 3%-5% again in March."

A certain optoelectronic technology company issued a notice stating: "Due to the soaring raw material prices, the production costs have continued to increase. Therefore, the company has decided to make corresponding adjustments to the prices of the entire product line. Please be sure to consult the new price before placing an order (orders before the New Year will be invalidated). The unit price is subject to the time of shipment!"

The above are price increase notices issued by several factories compiled by the editor. Of course, not only these companies are raising prices, but also some textile and garment factories, paper factories, plastic factories, etc. are raising product prices.

Cross-border sellers: costs increased by 50%

After the price of basic raw materials increased , companies reported a decline. " This year's raw material prices have increased sharply, and processing and export companies are having a hard time ." " This price increase will make life very difficult for small companies! "

Although the price of raw materials has increased significantly, in reality, 90% of customers are asking for price reductions. The head of a company that manufactures and exports home appliances and clothing products said that after the copper price rose, the terminal price did not rise but fell, and the profits of their company's home appliance products were severely squeezed.

A person in charge of a Dongguan foreign trade factory also said: "I was very happy when I received the pre-order before the New Year, because I had work to do at the beginning of the year. However, this wave of price increases not only eroded most of my profits, but I may even have to sell at a loss in the end. This is the first time in my 20 years of running a factory that the price of raw materials has made me doubt my life."

Factories are having a hard time, and cross-border sellers are having a hard time too? The answer varies from person to person.

A European seller of household products said that the value of their products is relatively low, and the price of products priced at 20 or 30 yuan would generally increase by only one or two yuan, so this actually does not have a big impact on them . The impact on high-value products may be slightly greater.

Another home furnishing seller also said that the price increase of raw materials has little impact on the company as a whole, and that they have been cooperating with the factory for a long time and the price has not even increased. As for the cost of the raw material price increase, the factory can only absorb it itself.

However, many cross-border sellers also said that this wave of price increases has a great impact. A seller of clothing products on Amazon US admitted that the price of raw materials has been rising, and many are now hoarding raw materials. He gets the goods from his relatives' factories, but the cost has still increased by about 50% .

" Bulk raw materials have increased in price, and the midstream prices have also started to increase. It is estimated that purchasing will be difficult in the next few months. If the costs cannot be passed on to downstream customers, it will be even more difficult . " said an interviewee.

How can affected companies stop losses in time?

In fact, the price of raw materials tends to rise at the beginning of each year and then stabilizes, but the collective price increase of commodities this year is still rare.

According to the price monitoring of Sino-Business Network, there were 73 commodities that rose month-on-month in the commodity price increase and decrease list on February 26, 2021, concentrated in the chemical sector (25 commodities in total) and the steel sector (11 commodities in total). Commodities with an increase of more than 5% were mainly concentrated in the chemical sector; the top three commodities in terms of increase were diammonium phosphate (8.48%), OX (8.33%), and PET (7.21%).

From the commodity price rise and fall list, we can see that most raw materials are in a state of price increase. The prices of some raw materials have skyrocketed by more than 1 times. The continuous rise in raw material prices has not only made it difficult for factories, but also for cross-border sellers...

A cross-border e-commerce seller said that it may take a month for the price at the supply chain to be reflected in the market, and two months for it to be reflected in Amazon's US site . Therefore , if the price does not drop after two months, there may be a large-scale price increase on Amazon's front desk .

The US has been printing dollars non-stop, which is considered by many to be one of the important reasons for the first rise in raw materials at the beginning of the year . "The massive money printing will definitely drive up the prices of bulk commodities." On February 22, local time in the United States, the $1.9 trillion coronavirus relief plan was passed by the House Budget Committee. If nothing unexpected happens, the proposal will be officially passed on March 14.

By then, while sellers will be greeted with a surge in orders, they will also gradually suffer a lot of bitter consequences.

As mentioned above, an important measure for companies to deal with rising raw material prices is to increase product prices. So apart from this method, will all companies affected by rising raw material prices have other countermeasures?

Some companies said that if the price increase continues to be so fierce, their company will consider importing raw materials from Malaysia. Other companies said that if the price of raw materials continues to rise wildly, they will also buy them frantically, anyway, they will pay at the end of the year. Of course, there are also some Buddhist sellers who frankly said: making money ... just let it be!

In any case, every turning point is a major reshuffle. Companies with low profits and small scale will gradually withdraw from the social stage in this setback, and the strong will only become stronger!

Raw materials

Price increase

cost

Cross-border e-commerce

foreign trade