Cooper Electronics went out of business?
On July 18, the cross-border e-commerce circle had another big earthquake, and the WeChat group of the circle of friends was talking about a big thing, saying that the well-known big factory had closed down.
The announcement of closure is an electronics factory located in Fenggang, Dongguan with nearly 1,000 workers, more than 40 R&D teams and more than 10,000 square meters of plant, Dongguan Cooper Electronics Cooper Electronics Co., Ltd. The notice of suspension of production and suspension of business issued by it indicates the reasons for the suspension of production and business and that employees can appeal to protect their rights and interests according to the national labor law and other laws and regulations, and has now gone out of business.
Why is there such a high degree of discussion about the closure of a large factory? That's because Cooper can also be regarded as a big factory in the cross-border circle, and its own corporate strength is still very strong.
Cooper mainly focuses on electronic digital products, computer peripheral products, and has independent import and export rights, is a national high-tech enterprise integrating the research and development, production and sales of Bluetooth headsets. Cooper Electronics was awarded the Key Enterprise of Fenggang Town's Enterprise Scale and Benefit Multiplication Plan in 2017, and obtained the "High-tech Enterprise" certificate issued by Guangdong Province in 2020.
Enterprises that have previously declared national high-tech know that patents are an important evaluation criterion for certification. There is not enough number of patents, and naturally this certification cannot be obtained. And patent certification is not any certification can be, with inventions and other intellectual property rights of enterprises, technological advancement score is generally a little higher, but also easier to obtain the national high-tech enterprise certification.
According to the data, Cooper Electronics has more than 200 patents, is a veritable high-tech enterprise, innovation ability and scientific research capabilities can be seen, what is the reason for the 12 years of operation of the electronics factory collapsed?
The of a thousand miles collapsed in the ant nest
According to Cooper's notice, the general environment for its shutdown is due to the continued huge impact of the new crown epidemic on global economic trade. The reasons are mainly the following:
1. It is sold by a number of cross-border e-commerce companies for arrears, and a large number of finished products are backlogged in the warehouse, and the funds cannot be returned
2. Domestic and foreign orders are seriously disjointed and fall off a cliff;
3. In recent years, production and operation have lost money year after year, which is difficult to sustain;
4. The sudden outbreak of war and the impact of the general environment directly led to a great impact on the company, and the market was extremely severe.
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And what's going on behind these brief reasons?
Let's start with Cooper being sold by a number of cross-border e-commerce companies in arrears. Cooper's main customer is Zebao, Zebao does not need to say much, is well known on the Amazon platform to sell consumer electronics products Shenzhen well-known cross-border e-commerce.
Cooper is the supplier of its Bluetooth headset and has been its second-largest supplier for many years in a row. Taking 2017 as an example, Zebao purchased 82.443 million yuan from Cooper Electronics, accounting for 8.96% of the total procurement.
It can be seen that as a foundry for supply, Cooper's industrial situation is also closely related to the business situation of its customers. So as Cooper's main customer is Zebao, why is he in arrears?
Sales performance and sales were slashed off a cliff
The most fundamental reason is because Zebao's sales performance has been sharply reduced by a cliff, and things start from the wave of suspensions that countless cross-border e-commerce companies are reluctant to mention in 2021.
Amazon's platform strengthened compliance reviews of Cross-border e-commerce in China, resulting in a large number of high-sell accounts being blocked, and Zebao is one of the most affected sellers, which has been greatly impacted.
In the same year, Zebao's sales performance fell sharply. When product sales plummet, sellers' cash flow is limited, foundry inventory is constantly backlogged, and payment collection is slow, and a vicious circle comes. Many netizens even commented: Zebao owes Cooper payments, and Cooper also owes countless suppliers payments, which is the real vicious circle.
Since the beginning of this year, Amazon sellers have generally reflected that advertising costs have risen, inventory backlogs have been long, and products have fallen into low-priced volumes, it seems that sales have risen, but a careful review of performance, many sellers have found that they have sold more goods but earned less money, which will also affect the seller's demand for ordering goods. Inventory clearance is the current main trend, the goods have not been cleared, the demand for incoming goods is also reduced, and then the number of orders received by the factory will also be sharply reduced.
The account period prevents funds from being repatriated quickly
In addition, the last straw that crushed the factory is the problem of account period, basically according to the situation in the industry, it will allow 1 to 3 months of account period for up to half a year, which is also an unwritten rule in order to better do long-term cooperation business.
But now in this environment, everyone seems to avoid the account period, and almost everyone is dragged by the account period to the point of having to go to the door to collect debts. In order to ensure the good operation of their own companies, many sellers have said that because the risk is too large, they are now afraid to give cross-border e-commerce account periods.
Since the beginning of this year, many manufacturers in order to reduce operational risks, have shortened the account period, many factories from the original 3 months account period shortened to 1 month, now it is understood that a month account period is a common situation, some even do not give the account period, one hand to pay the other hand delivery, everyone is trying to solve the problem of slow return of funds to the greatest extent.
Several factories also closed in disguise
This situation is not only a problem for the Coopers, soaring operating costs, sluggish consumer markets in Europe and the United States and other factors impacting this year's cross-border market, not long ago, several factories announced that employees "unpaid leave" is actually a disguised closure.
We can do it
For cross-border e-commerce sellers, ensuring the healthy turnover of funds is always the top priority. At present, with the lifting of the overseas epidemic home restrictions, the recovery of global shopping demand since June is on the rise.
It is expected that the cross-border e-commerce industry will also usher in a new round of recovery in the second half of the year. Or that sentence, carefully prepare goods, ensure the healthy turnover of funds, be careful to make the Wannian Ship, and hope that all sellers will be ready to meet the next round of shopping demand recovery.