Will the rising cost of raw materials affect the retail sales of drinking bottles?

The rising cost of raw materials will have an impact on the retail of drinking bottles?

Answer: Yes

According to data collected by well-known global survey institutions in 2019, the retail price of many products including water cups on Amazon is 6.5-8.5 times the ex-factory price, and the retail price on Tmall is 3.5-5.5 times. Of course, you can't just think from multiples, thinking that retail profits are too high, but it is not.

From the production of products to online sales, there are still logistics costs, warehousing costs, labor costs, advertising costs, operating costs, product losses, and courier costs after sales, labor service costs, etc. Especially with the popularity of Internet online sales in recent years, each e-commerce platform will charge different and expensive platform management fees. At the same time, every time a product is sold, the platform also collects commissions. According to the statistics of various expenses, the profits of real retailers are limited.

Of course, some products, such as accessories, have a premium space of more than 10 times, and make-up products have higher profit margins. These are no longer used for data comparison.

Taking this year's plastic material TRITAN as an example, the purchase price per ton in September 2020 is 24,000 yuan, and as of April 15, 2021, the purchase unit price has reached 42,000 yuan per ton. In other words, the unit price of materials has almost doubled, so the cost of product materials will definitely rise.

At the same time, the price increase of a product material will not only affect the labor cost of food, clothing, housing and transportation, but also indirectly increase labor costs. Take our factory as an example. As of April 2021, our ex-factory price needs to increase by 20% to reach the profit level at the end of 2020. The ex-factory price rises, and the retail price also rises differently depending on the length of time.

However, due to the space factor of retail price premium, the increase in retail price will not be as obvious as the ex-factory price.

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