LED companies trapped in triangular debt quagmire: The most romantic thing I can think of is that the payment for the goods has been paid!

The so-called "triangle debt" in the industry refers to the common name for the arrears of payment that should be paid but have not been paid through the collection and payment period or the agreed payment period between enterprises in the industrial base. It is a chain debt relationship formed by the arrears of payment between enterprises.

In fact, the triangular debt phenomenon in the LED screen display industry is also serious - customers default on payments to screen manufacturers, screen manufacturers default on payments to suppliers, and suppliers default on payments to upstream chip and auxiliary material factories... By analogy, the originally normal industrial chain has become a debt chain full of risks, so there is a saying in the industry: If a screen factory has a problem with its capital chain, its "suppliers" will also face financial difficulties, especially for some small businesses that do not have "sufficient financial strength."

The reason for the serious "triangular debt" in the LED display industry is that the current industry has overcapacity, supply exceeds demand, and the market competition is extremely fierce. In order to "win customers," companies constantly compare products, services, and lower prices. As a result, corporate profits are very low, so there is not much book capital turnover. In addition, companies provide "credit" to stimulate customers. , comparing their loan amounts and payment cycles, some arrears may even last for half a year or more, but in this way, it is equivalent to the company handing the capital chain that is related to its "life and death" into the hands of the customer. Once there is any problem in the middle, it may cause the company's capital chain to break and plunge the company into a desperate situation.

In addition to the rampant "triangular debt" caused by the "excessive competition" of enterprises in the industry, the normal operations of LED display companies themselves require strong financial strength as backing. Generally speaking, a display project often requires an investment of hundreds of thousands, or even tens of millions. And because many project cycles are relatively long, many companies adopt installment payment methods, and the time for funds to be withdrawn is also extended. More seriously, if there is any problem during the project, the company often cannot receive the final payment, which is undoubtedly worse for those small and medium-sized enterprises with insufficient financial strength.

Price wars have reduced corporate profits one after another, and triangular debt has prevented corporate funds from finding a home. No wonder many people in the industry say that most LED display companies are dragged down by debt and go bankrupt.

Nowadays, the development of the LED display industry has entered a relatively gentle stage. Every enterprise is looking for market hot spots and tapping profits, but it must be noted that in the face of interests, enterprises must reasonably control capital chain issues, compete in the market with a reasonable and healthy business model, start to solve price wars, improve product quality, and make the industry's competitive ecological environment gradually benign and healthy.

Choosing friendly cooperative enterprises with high credibility is also one of the important measures to avoid falling into the "quagmire" of triangular debt. In addition, Gree's "pay first, then deliver goods" system is worth learning from the LED display industry. Nowadays, more and more factories have adopted the method of "pay first, then deliver goods": delivery after payment allows customers to carefully consider the variety and quantity of goods purchased. quantity, and do not purchase goods randomly. If there is a debt, there may be random purchases; at the same time, delivery on payment can allow customers to sell products more carefully; in addition, delivery on payment can make the relationship between cooperative enterprises better, because cash customers must be the most cherished customers of the company, and the company will return the greatest discount;

It is undeniable that the LED display industry is a high-risk industry with "triangular debt". Enterprises should actively do internal coordination and turnover work, protect their own enterprise's capital chain, and provide guarantee for the company's good future development.