Yiwu boss sells zippers for a few cents each, with annual sales of 30 million

This article interviews the owner of the Yiwu zipper factory and tells his entrepreneurial journey. It is recommended for friends who are interested in entrepreneurship to read and learn.

When he goes out to buy clothes, Wu Guofeng always observes the zippers of the clothes.

Ordinary people may only pay attention to whether the zipper is smooth to use, but Wu Guofeng looks at what kind of zipper head it uses and whether there is any special craftsmanship.

If an expensive piece of clothing uses a regular zipper, he will feel that the cost-effectiveness is not high. If the zipper of a piece of clothing is of good quality and uses special craftsmanship, he will have a good impression of the manufacturer behind the clothing. "The cost of a zipper is not high, and the difference between the cheap and expensive ones is not much, but it can show the manufacturer's level of care."

Wu Guofeng, a post-80s born in Yiwu, had the idea of ​​doing business since he was a child. He served customers in Ethiopia, opened 1688 (a wholesale platform under Alibaba) with his friends, and opened a store in Yiwu International Trade City. In 2016, after he married his wife, he took over the zipper factory in his wife's family, took the zipper business online, and started a self-media, intending to do business on the C-end. He expanded the scale of his business seven times in eight years. The zipper factory, which once had an annual sales volume of only 4 million yuan, now has an annual sales volume of more than 30 million yuan. In his factory, the cheapest zipper only costs 7 or 8 cents, "making only a few cents."

01 “I returned to Yiwu to start a business”

Wu Guofeng had been through many "troublesome" times. In 2010, Wu Guofeng returned to Yiwu from Nanjing after graduating from university and joined a foreign trade company.

His customers are mainly from Ethiopia, and they mostly buy cheap flashlights, bags, department stores, etc. His English was good in college, but in actual work, body language and calculators are more useful. "Many foreign businessmen are not from English-speaking countries. Some of them can speak English, but their English is not very good."

At that time, many Yiwu bosses did not know much foreign language. When there was a translator, they communicated with the translator. When there was no translator, they gestured to the customers while pressing numbers on the calculator. They pressed a number for a few yuan, and pressed another number when the customer bargained. After working for a year, a college classmate of Wu Guofeng found him and wanted to cooperate with him to open a 1688 store.

As a native of Yiwu, Wu Guofeng watched his parents do business and open factories since he was a child. His parents opened a socks factory in their early years, and later partnered with his uncle to do daily necessities business. Most of his relatives were "businessmen", and the seeds of "entrepreneurship" were planted in his heart early on. Even after graduation, he returned to Yiwu to look for entrepreneurial opportunities.

Wu Guofeng and his schoolmates hit it off immediately, rented a small one-bedroom house as a warehouse, and started their own business.

That was in 2011, less than a year after Alibaba changed the name of its Chinese trading market to "1688". There were not many Yiwu manufacturers on this platform specializing in wholesale and procurement business. Wu Guofeng and his schoolmates visited factories in Yiwu and put the popular products on Taobao for sale online.

Because of the low prices and wide range of products, their business was pretty good in the first year. They moved from a one-bedroom apartment to a warehouse on a whole floor and sold hundreds of thousands of yuan worth of goods, but they didn't see any cash flow at all. "As soon as I got the money, I invested it to buy goods. I only saw the goods in the warehouse, not the money." The platform bonus they had just received also disappeared quickly.

In the second year of Wu Guofeng's entrepreneurship, many Yiwu manufacturers appeared on the platform. They no longer had a price advantage as they relied on purchasing goods, and the number of orders became less and less. Wu Guofeng and his alumni decided to stop the loss in time, thus ending their first business venture.

After completing his first business venture, Wu Guofeng was called back home by his parents and asked to "inherit" the family's trade city store and return to Yiwu's most original market to take orders and ship goods.

02 Selling a zipper worth a few cents for 30 million

In 2016, Wu Guofeng married his wife, who is also from Yiwu and whose family owns a zipper factory. Wu Guofeng's best friend's family was in the zipper business, so he indirectly learned about the business and took over his father-in-law's zipper factory after marriage.

The factory is not large, with only four or five employees. Its annual sales hover around 4 to 5 million yuan, relying mainly on orders from old offline customers.

When he started his first business, Wu Guofeng discovered the opportunity of online orders. The zipper factory had already done e-commerce in the early years, but it was just for display, not for special operation, and there were not many online customers. He decided to "activate" the online business, take photos and edit pictures by himself, find an agent to make the detail page more beautiful, buy advertising slogans...

At that time, not many auxiliary material factories were engaged in e-commerce business, and even fewer could do well. After adjusting the customer acquisition channels, the annual sales of the zipper factory increased from 4 million to 5 million yuan to 30 million yuan, more than 80% of the orders were found online, and the number of employees increased from four or five to more than 20. When working in a foreign trade company, Wu Guofeng saw many bosses driving Porsches and BMWs to deliver goods. Some bosses would say during chats, "Xiao Wu, I really envy you for working here. If possible, I would not want to run a factory."

At that time, Wu Guofeng just thought they were joking, "If you don't run a factory to make money, how can you get luxury cars and mansions?" It was not until he entered the factory himself that he realized that these were the truth, "Manufacturing is really too tiring."

The cheapest zipper used as an auxiliary material is seven or eight cents per piece, while the most expensive is only a few yuan. "Most zippers make money by the cents, and some only make a few cents per piece." They rely on the principle of "small profits but quick turnover."

With more customers and more orders, the factory needs to increase production capacity, buy machines, invest in equipment, and recruit workers. "It's useless to just buy machines without workers to operate them." Zippers may not look complicated, but they require skilled workers to operate them. If there is an operating error, at least one zipper will be lost, and at worst hundreds or even thousands of meters of semi-finished zippers will be scrapped.

When Wu Guofeng first took over the zipper factory, the average worker's salary was more than 1,000 yuan, and the master's salary was 2,000 to 3,000 yuan; now, the average worker's salary is more than 10,000 yuan, and the master's salary is at least 10,000 yuan.

The salary is not low, but recruiting workers is a problem. “It’s heavy physical labor and working in two shifts. Young people basically can’t stand the hardship. Even if they come, they will leave after working for a while.” The average age of workers in the factory is over 40 years old, and there are other factories that want to “poach” people.

As a manager, Wu Guofeng also needs to be active on the front line of the factory. He personally checks everything from mold design to pre-production samples and then to the final bulk goods. "If there is a problem with the mold, then there will be a problem with the final product. If there is a problem with the material, then the zipper will have quality problems." While monitoring production, he also has to coordinate the work of different workshops to ensure that the products reach customers quickly.

03 The zipper factory owner who made Douyin

A zipper that costs a few cents may seem inconspicuous, but it can influence customers' purchasing intention.

In 2016, Wu Guofeng received a consultation call. The merchant on the other end of the phone made a batch of finished bags, but the zipper broke as soon as it was pulled. Wu Guofeng understood immediately, "This is because the material used for the zipper head is not environmentally friendly and contains too much lead." In this case, the merchant can only take back the goods and find the previous supplier of zippers to replace them. The orders of the zipper factory mainly come from clothing and luggage manufacturers, and the customers are basically B-end customers, with hundreds of thousands of orders at a time. But before placing an order, they will buy samples to try first, and only place large orders after they approve the product, and then go to the factory to check the goods and put forward customized requirements.

A substandard zipper may ruin a whole batch of finished products. Quality is the foundation of a zipper factory's survival.

In addition to ensuring quality, Wu Guofeng has also made many improvements. Once a luggage customer made a round bag that was only about one centimeter wide. If the existing base was used, the zipper tape would easily be worn out.

Wu Guofeng and the mold factory conducted repeated experiments and changed the right angle of the zipper base to an arc shape, "which makes it smoother to pull and less likely to wear out the fabric tape." Since then, all zippers in their factory have used this base, "Now when you look at the zipper base, you can tell whether it is ours."

Like all industries, the zipper industry has become increasingly competitive. "There are hundreds of zipper factories in Yiwu, and more and more of them are doing online business." The cost of operating platforms has increased. Wu Guofeng wants new channels to expand his customer base, and in 2020 he targeted short video platforms. "I want to do self-media, and I must do it."

Zippers are just auxiliary materials. Although they are cheap and can be seen in daily life, they are completely different from daily necessities. "How should zippers and zipper heads be sold? Should they be sold one by one or one by one?"

At the beginning, he just posted some short videos of factory production on Douyin. He didn’t have any shooting skills, the camera was shaking, the picture quality was blurry, and he was embarrassed to show his face. The number of views was only a few hundred, and there were very few comments.

It was not until this year that Wu Guofeng saw Lei Jun appear at the Xiaomi SU7 launch conference and promote his product on social platforms. He made up his mind to appear in short videos, "regardless of whether I have the ability or not, I must endorse my product."

He hired an editor to introduce the factory in person, talk about his entrepreneurial experience, and discuss changes in the industry. The first video received more than 80,000 views. Although he has not received any orders from short videos, Wu Guofeng has bigger ideas. He wants to bind with his factory and create an IP together. In the second half of the year, he will visit the factory and shoot videos with the merchants he cooperates with to "bring traffic to my customers."

On the short video platform, Wu Guofeng calls himself a "second-generation factory owner", but deep down he feels that he is more like a "first-generation factory owner" because he has re-established his parents' business on the Internet. In the future, he also wants to use the Internet to bring the traditional zipper business to overseas retail platforms and sell zippers to ordinary consumers.

Author: Wang Zhan; Editor: Zheng Yawen; WeChat public account: Seller