It is understood that the scheme of this scam is to first sign a large processing order with a textile company and take advantage of the unspoken rules of “accepting orders on credit” in the textile industry. By paying a small amount of payment, defrauding the goods and then exporting them, this fraud team has caused huge harm to 24 textile companies in total, with the defrauded amount reaching more than 110 million!
This incident has to give people a chill. Cool, “accepting orders on credit” has always been a common rule in the textile industry, and scammers often take advantage of this to commit fraud. What are you afraid of when doing textiles? Afraid of selling on credit, afraid of cash on delivery, most afraid of not paying when the goods arrive, and even more afraid of not being able to get the money back after selling the goods. But why do textile people know the dangers of selling on credit, but in actual operations it is difficult to completely avoid it? Sales on credit are more common this year and the cycle is longer than in previous years. What is the reason for this?
01
Orders in the textile market are scarce, and textile workers are eager to receive orders and are forced to sell on credit
Due to the impact of the epidemic this year, domestic and Foreign trade has been severely hit, resulting in scarce orders in the textile market. As a boss who makes imitation silk said: “Although the market was not good last year and there were few orders, we kept the bottom line and did not agree to sell on credit. We all required full payment. But with the market this year, if we don’t sell on credit, there will be no sales.” Listed.”
The cycle of credit sales is also related to the market conditions , generally speaking, when the market is good, like in 2017 and 2018, under the “once-in-a-decade” market situation, many textile bosses reported that supply exceeds demand! Most customers queue up at the factory gate with cash, so there is no credit sales at this time. But in 2019, the market sentiment began to decline. Customers said that funds have been tight recently, so they should take care of them and take the goods away first, and then check out later. But after the customer leaves, it’s a long road to pay! At the end of last year, when the editor visited the market, many gray fabric manufacturers and traders said that there were still millions floating around outside.
As of this year, the textile market is already in a serious imbalance between supply and demand. At present, the inventories of most weaving manufacturers have reached a high level of more than 2 months. In an environment where there are too many people and too little food, once there is an order, each manufacturer will try its best to grab it. Live, if you can sell on credit, you can sell on credit. And the debt payment cycle is usually around 3 months, and sometimes even more than 3 months.
When the market is bad, weaving factories and traders have little say. In order to take orders, they can only allow customers to sell on credit. It is precisely because of this mentality that criminals can take advantage of it and start a business called real business. For the purpose of fraud. “This model of credit sales cannot be completely eliminated in the short term. Although many bosses have had the experience of being cheated on credit sales before, it is impossible to completely eliminate credit sales in business. Old customers will still be allowed to owe money in the future, but they will definitely be more cautious. .” said a cloth boss.
02
Closing stores, losing money, laying off employees, the capital chain of terminal service companies is tight, and it is difficult to pay in full Qing
Since the beginning of this year, due to the impact of the epidemic, some well-known terminal service companies have closed stores and suffered losses. Examples include Zara, NIKe, Adidas, etc. This has also resulted in the entire textile and apparel industry chain being in a state of funding shortage. It is difficult for garment companies to pay all clothing costs to garment factories, which results in garment factories being unable to pay all fabric costs to fabric merchants. Finally, fabric merchants default on payment to gray fabric merchants. In this way, the entire industry has formed a “credit sales chain.” And if there is a problem with one party’s funds, the following party will not be able to get payment for the goods.
“It’s not that we don’t want to pay, it’s just that our downstream customers still owe money, and it is said that the customer’s next customer has not received the payment in time.” A fabric trader said helplessly. In this case, the weaving manufacturers will be most harmed, because the weaving manufacturers need to pay cash to purchase raw materials, but the downstream traders can owe money. If the debt period is long, the profits of the weaving manufacturers will be more difficult to guarantee.
Especially this year, everyone has limited funds, so you must be more cautious at this time. Even if you have a big order, don’t be fooled. Especially for new customers, you must find out the details of the other party before you can establish a cooperative relationship with him! I also hope that all textile people can consciously pay back their money in a timely manner. It is not easy for anyone, so please be considerate of each other!
</p
