Crazy Entry Fee, When To Calm Down? Look At The Hidden Rules Of China'S Spinning And Weaving Industry'S Retail Channel

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The global economic recession has prompted many foreign brands and even luxury brands to pour into the Chinese market. In addition, the domestic brands, which have been mainly domestic sales, have been expanding their terminal sales channels, leading to a large number of textile and garment brands planning to enter the shopping malls and supermarkets to seize the market, resulting in the "entrance fee" has been continuously improved and the pain is getting worse.

What is "entry fee"?

The entry fee (also known as the entry fee) is a kind of fee charged by the shopping mall or supermarket to the supplier for its relative advantage in the market paction.

At present, various supermarkets, shopping malls (including hypermarkets) to enter the fees charged to suppliers, there are two kinds of contracts and contracts.

The fees in the contract are mainly on the cost of the upper frame, the monthly fee, the advertising fee, the promotion fee, the annual fee and gross margin.

The contract fees are often derived from the fee items in the contract, such as the bar code fees, terminal fees, promotional activities in banners, flower baskets, air floats, land stickers, wall stickers, light boxes, DM special advertising, personnel management and so on.

Among these various entry fees, one is relatively reasonable fees, such as new products, promotional fees, rebates and so on, because these goods occupy the shelves and human resources of shopping malls or supermarkets, and suppliers must pay the corresponding fees.

"Tricky" is mainly caused by another kind of unreasonable charges, and such charges account for the "big head" of the entry fee, such as store fee, compensation fee and so on, and the fees are charged by various names, or even taken out secretly.

Supplier: faced with numerous entry fees, he has been humming for years.

The city is located in Taiyuan, Shanxi, which is not very developed inland. After many days of visits to shopping malls, such as Hua Yu, Maoming, Meiyuan Parkson, Tongluowan, Dongfanghong, Liu Xiang Department store, Wangfujing and other famous shopping malls in Taiyuan, the textile and garment agents and suppliers, industry and Commerce tax departments, insiders and so on are aware of the entry fee for the textile and garment industry.

The main items include: new store opening fee, shop refurbishment fee, terminal fee, new product charge, personnel management fee, promotion stack charge, service charge, consultation fee, delivery time charge, compensation loss, unconditional discount, conditional discount, distribution fee, entrance fee, bar code fee, default fee, storage time for goods storage, DM postage fee, advertising support fee, festival fee (New Year's day, Spring Festival, may day, Dragon Boat Festival, Mid Autumn Festival, National Day), and various kinds of profit making rebates and other 30 kinds of expenses.

The corresponding cost level should be adjusted according to brand awareness, reputation, market positioning, price, shopping malls, passenger flow, counters location and so on.

Generally speaking, the entrance fee for textile and clothing brands in the Taiyuan market, such as Mao ye (formerly Lian Yang Department Store) and Baisheng, is generally between 2 and 50 thousand. The highest entry cost is the Huayu international fine commercial building of Fuxi street. Especially after the international luxury brand Louis Vuitton LV has been successfully settled, Huayu's "social status" is even more crazy, the second and the following brands are not allowed to enter, other brands come in at least 10 to 200 thousand of the entry fee, and also

We need to find relationships.

The general agent of Shanxi, a local menswear brand, told reporters that high-end textile and clothing brand terminal sales channels are generally only two, one is to open stores, and two is to enter shopping malls.

Opening stores, high rents, decorating and so on, at least costs 30 to 600 thousand, and even if they enter into shopping malls, they only need to pay tens of thousands of the maximum 100 thousand entry fees, and the number and quality of the target customers in the stores are obviously not in the market.

In the face of these two channels, we can only swallow and choose shopping malls.

Bian also complained to reporters about many "bitterness": "entry fees and public relations expenses accounted for 20% to 30% of the net profit in the whole year, because too many brands wanted to enter the shopping mall. Contract signing, entry fees, product purchase orders and payment settlement" power "were all in the hands of shopping malls. Shopping malls, department managers, purchase department managers, floor managers and counter group members all had to take care of them. Such a" PR fee "is inevitable for every agent supplier.

It's hard to say, "sneeze" in the mall, we all have to go with it.

According to insiders, 40% of the annual profit of the mall comes from "various entry fees", such as the net profit of one year is 100 million, then at least 40 million is "entry fee".

Merchant: entry fee is in line with international practice. We have great pressure to survive.

In the course of the interview, many businessmen agreed that "charging admission fees for shopping malls is a reference to international popular practices.

At present, the state has not issued relevant regulations explicitly stipulates that no entry fee is allowed.

The entry fees charged by shopping malls should be legal if they are complete in formalities and able to issue effective tax receipts.

The pressure of domestic shopping malls is also increasing. According to China's WTO accession commitments, the retail industry has been fully open since 2005, including nearly 15 of the world's top 50 retailers, such as Japan's Yi Dan and Korea Lotte Department stores.

According to the data released by AC Nielsen, the average retail sales of local retail businesses are only half a little more than that of international retailers. The profit margin of 9% is far from the 24% of international retailers.

The game between suppliers and shopping malls: the former is the player, and the latter is the player.

At present, there are relatively few shopping malls in the domestic sales channels, and the suppliers of various brands are relatively large, leading to the shortage of counters in the shopping malls.

So in this business game, the shopping malls are obviously game makers: how much the fees are collected, how to collect, when to collect and what items are all made by the shopping malls; suppliers are game participants -- how to sell cards in the market, and how the suppliers will take the job.

The relevant departments of the state, including the Ministry of Commerce, the General Administration of industry and commerce, and the General Administration of Taxation, have issued many documents, requests, and administrative measures in recent years. However, the entry fee has shifted from the table to the background.

Kou manager, a business outlet of a shopping mall in Taiyuan, made a direct statement: "do not talk about what the state stipulates policy, so long as it violates the basic rules of the market, even if it is formulated, there is no difference between it and no formulation."

For the suppliers who are in a weak position in the supply business game, when will the country get rid of the gloom in the sky?

Head of state authority: prohibit businesses from collecting "entry fees" and prohibit the delay in delivery to suppliers.

As for the so-called "international practice" of businessmen, as early as 2003, the Assistant Minister of Commerce of the State Council of Commerce explained the "international practice" when he served as the director of the market Management Bureau of the State Economic and Trade Commission. He said: "the survey found that most of the shopping malls currently collect fees in the Yellow Sea, which is in line with international practice and is reasonable.

For example, advertising costs, tens of thousands of goods in the supermarket, only to publicize you, of course, to charge a corresponding fee; for example, promotional fees, all kinds of goods to the chain store, shop again for your commodity code, the appropriate charge is reasonable.

However, there are a lot of fees, such as store fees, sponsorship fees and so on, which are unreasonable for the suppliers to bear, and some fees are not written into contracts or invoices at all. This is unreasonable.

According to the contract, it is totally unreasonable for the supermarket to pay the supplier's goods overdue. It must be stopped in accordance with the law. "

Insiders: "no objection to the entry fee, no objection to the admission fee".

"We are not opposed to collecting fees. We object to collecting fees."

Fan Xiaojun, chairman of Shanxi eight Tong industrial group, explained to reporters that fan is always the national marketing elite in China's agents. His company acts as a proxy for Procter & Gamble and many other brands, with an annual sales of more than 200 million. As early as 2006, he was preparing the China Federation of agents, boycotting the entrance fee for shopping malls, and in the same year served as the president of the Shanxi Federation of agents.

For shopping centers to collect entry fees, Fan Xiaojun and other representatives of China's best agents have the most say.

There are mainly two kinds of fees for Fan Xiaojun's unauthorized entry fees, one is the unequal contract, all the terms are made by the retailers, the supplier as Party B has no bargaining power, and the two is the signing of the contract, but the retailer is not strictly executed according to the contract, increasing the charging items halfway, and not paying the contract according to the contract.

At the same time, fan believes that at present, China's shopping malls and supermarkets have a large profit from the entry fee. Suppliers, as long as they have good business, are willing to pay more for retailers, so long as the fees they pay are within reasonable limits.

"Entrance fee is not a problem of collection." Professor Li Fei of Tsinghua University thinks that the question of "how to collect fees, how much to collect and how to execute contracts is a real problem."

There are different opinions on how much the market charge should be charged. Businessmen have different opinions. Some believe that they should be charged according to a certain proportion. If large enterprises can receive more, small and medium-sized enterprises can receive less. If they do not, the quantity and quality of entering enterprises can not be controlled.

At the same time, whether commercial bribery is involved is one of the focuses of the debate on entry fees.

Crazy entry fees, consumers pay.

"Secretly charging" entry fee "leads to unfair competition, which affects the quality of products, and ultimately affects the level of consumption of consumers.

Liang Xiaohui, a legal expert of China Textile Industry Association, is an analysis.

In order to obtain profits, pass on business risks, improve the "entry fee", and let many suppliers complain, suppliers can only shift the cost to retail prices or pass them on to manufacturers in order to maintain their profits. Manufacturers have to do things in terms of raw materials and weights, and consumers are ultimately injured.

Wang Fen, a scholar specializing in commerce, pointed out that the current retail profit formation has gone through three stages: the difference between the selling price and the selling price, the profit to the supplier and the profit to the supply chain.

"At present, most retail enterprises in China remain in second stages."

She said that with the increasingly fierce competition in the retail industry, it will not last long to earn profits by collecting channel fees.

It is imperative to integrate supplier resources and establish partnerships with suppliers.

In October 2009, at the 106 Canton Fair, the head of the foreign trade division of the Ministry of Commerce said in an interview with reporters that China will introduce regulations on fair trade between suppliers and retailers, which will focus on regulating the trading behavior of domestic retail enterprises, such as prohibiting the entry fees and prohibiting the payment of goods from suppliers for extended periods.

Let's hope that the relevant policies of our country will be released as soon as possible, and the cooperation between suppliers and retailers will soon find a new model. The crazy "entry fee" will calm down as soon as possible and become a win-win cooperation fee.

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A summary of relevant measures promulgated by relevant ministries and commissions in recent years to crack down on "entry fee"

In October 2004, the State Administration of Taxation issued the notice of the State Administration of Taxation on the Levy of levying taxes on the part of the fees charged by commercial enterprises to the suppliers of goods through its website. The industry experts believe that the notice indicates that the government has recognized the legality of collecting the fees, but has not standardized the rationality.

In November 2006, the five ministries and commissions of the Ministry of Commerce, the NDRC, the Ministry of public security, the General Administration of Taxation and the General Administration of industry and Commerce jointly issued the "Regulations on the fair trade management of retailers and suppliers", which clearly stipulates that retailers should not collect contracts for signing or renewing contracts, and unauthorized bar code fees, decoration fees, festival fees and business expenses.

In February 2008, CCTV's authoritative program "focus interview" reported on the "entry fee" that should not be collected.

In March 2008, SAIC issued four measures, requiring all industrial and commercial organs to further strengthen market supervision, including cracking down on the violation of regulations such as "festival fee", "admission fee" and "promotion fee".

In October 2009, at the 106 Canton Fair, the head of the foreign trade division of the Ministry of Commerce said in an interview with reporters that China will introduce regulations on fair trade between suppliers and retailers, which will focus on regulating the trading behavior of domestic retail enterprises, such as prohibiting the entry fees and prohibiting the payment of goods from suppliers for extended periods.

In recent years, provinces and cities have introduced relevant measures to combat "entry fee" and the self boycott behavior of shopping malls everywhere.

In May 2004, representatives of suppliers, retailers, local suppliers associations and representatives of the China Federation of Commerce (CPC) representatives of more than 150 enterprises set up the retail business committee of the China Federation of Commerce.

In February 2005, the Beijing Municipal Bureau of Commerce promulgated the "Regulations on the purchase and trading of commercial retail enterprises in Beijing (Trial Implementation)" and put an end to the "entry fee" of supermarket stores. The relevant regulations require retailers not to ask the suppliers to obtain sponsorship fees in the name of new shop opening, shop celebrations and festivals, etc., and do not repeat or set up fees in disguised form; and prohibit the deduction of suppliers' settlement payments without the agreement or charging items and the amount being agreed.

In March 2006, at the Congress of Nanjing general merchandise business association, it discussed the adoption of the "proposal to standardize the purchase behavior of retail enterprises". The more than 30 shopping malls of Nanjing central shopping mall, Xin Bai, Jin Ying and Dayang department store jointly boycotted the "entry fee" to form a fair trading environment.

In May 2007, the implementation measures for fair trading management of retailers and suppliers in Chengdu were promulgated.

The method explicitly prohibits shopping malls from collecting 10 fees, such as admission fee, celebration fee, contract renewal fee, decoration fee, bar code fee and so on.

In August 2008, 75 commercial retail enterprises in Changzhi, Shanxi signed a letter of undertaking to boycott commercial bribery. They promised not to take advantage of their advantageous position to borrow commercial bribes from suppliers in the name of entry fee, promotion fee, publicity fee, sponsorship fee, research fee, labor cost, consulting fee and commission.

In November 2008, the six departments of Wuhan business, price, public security, state tax, local tax, industry and Commerce jointly announced the new regulations, cleaned up the hidden rules of the retail industry, and focused on cracking down on commercial bribes in the form of entry fees and sponsorship fees. This is the first time that Wuhan has issued relevant administrative rules for cracking down on commercial bribery in retail trade.

In 2009, Jiangsu province implemented "Jiangsu province commodity bar code management method". This method, at the same time to the regulation of commodity bar code, also put forward requirements for shopping malls and supermarkets: not for the name of the supplier to charge the "entrance fee" to the supplier.

The regulations on the management of barcode for commodities in Jiangsu have made clear the corresponding penalty: "in the name of commodity barcode, the cost of entering the shop, loading on the shelves and information processing fees to the suppliers will impede the popularization and application of the bar code, and be ordered to be corrected, and a fine of more than 500 yuan and 3000 yuan shall be imposed".