Chapter 41 – Setting the rules
Feng Yu looked at Wu Zhigang, who was holding a stack of forms. Wu Zhigang immediately gave out the forms to everyone and let them fill out the forms.
They looked at the form. Company’s name, nature of the business, contact person, contact details, etc. They all understood the reasons for asking this information. But the last one, “acceptable wholesale price of the electric fans”. What the hell is this?
They looked around and don't know what to write. What if they fill in a high price, and this crazy boss used the highest price as the wholesale price. The person who filled in the highest price will the enemy of everyone.
If they fill in a low price is also not good. They can imagine what this Manager Feng will say: “You filled in the lowest price. There is no sincerity at all! Get out!”
One of the businessmen suddenly noticed that Manager Feng was not paying attention to them. They started whispering among themselves to decide the wholesale price. This way, everyone will fill in the same price.
Everyone whispered and discussed for a long time. Finally, they decided the wholesale price for the two models of fans, which were 40 RMB and 48 RMB respectively. They also supervised each other and does not allow anyone to submit the forms first. They will submit the forms together at the same time.
Feng Yu only looked at one form and nodded. “Good. You all are sincere about this business. Every unit at 40 RMB and 48 RMB. Although we will almost have no profits for this pricing, we are willing to accept. We will treat this pricing as the promotional pricing. The wholesale price will be fixed at this price. Anyone disagree?”
Everyone kept quiet and Feng Yu was satisfied. Look, chasing away someone will act as a warning to others.
“How many units are you all going to buy?” Feng Yu asked.
“1000!” One of them shouted loudly.
Others saw that Feng Yu had not sent the man away, and they all also shouted. There were 800, some 1500, up to 5,000 units.
The one who shouted 5,000 units is a fat man and looked like an unscrupulous businessman. He was crossing his arms, with his head held high, looking down on the rest. He was from the southern province. The southern provinces are hotter and are definitely a bigger market compared to the north.
Wu Zhigang, who had been consolidating the forms, handed summarized report to Feng Yu.
There were four provinces overlapped and more than 10 provinces are blank.
“Ok. Now I will tell you all the rules of our company.” Feng Yu said.
Hearing what Feng Yu said, these businessmen thought in their heart: “I knew you still have ‘rules’.”
“Everyone can see how our company's Wind and Rain fans fared from the sales in Bing City, the most northern province of China. You all are here because you all know that these fans can sell and will sell well. The summer in other provinces are hotter than Longjiang province, so you all know what to expect from the sales of our fans. In fact, we had wanted to build our own sales channels in other provinces. Since you all came, I will give you all a chance. According to our company’s plan, there will be only one dealer for every province. Now, those I read out the names will go to the left side of the room, and those that I didn’t call, will go to the right side of the room.” Feng Yu said.
Wu Zhigang called out names of those businessmen whose provinces overlapped. They looked at each other and walked unwillingly to the left side of the room. The rest had a sigh of relief. It seems that they have no competitors in their provinces.
“That was just the first rule. Now, the second rule. Every province will have only one distributor and the minimum order for the fans cannot be less than 5,000 units. This standard is set by that fatty over there. If anyone is unable to order so many units, you can leave now!” Feng Yu said.
This time, that fatty is not complacent. Everyone was glaring at him. That fatty is cursing Feng Yu in his heart: “You obviously wanted these people to order more units. Why let me take the blame!”
Who is willing to quit? Wind and Rain fans were inexpensive and of good quality. Furthermore, it is summer now and it is the best time to sell electric fans. There should not be any problem to sell 5,000 units in a province.
If they do not have enough money, they can borrow. Even if they can’t borrow, they can find other people to cooperate. In short, they cannot give up this rare opportunity! If they quit this time, then based on this Manager Feng’s temper, they will be blacklisted!
“You all agree to it? Very good. Then I tell you all the third rule: Pay first, then deliver the goods.” Feng Yu said.
This rule is a bit unacceptable. Most of the business deals were to pay a down payment or deposit first and the rest after the goods went on sale. But these businessmen knew that those who do not agree will be chased out of the room.
“The fourth rule: The retail price in your province cannot be higher than 15% of Bing City’s retail price. Also, you cannot sell the goods to other provinces. If I found out, then it will be considered a breach of contract and the damages is 500,000 RMB!” Feng Yu continued.
Not able to enter someone else's market made some of these businessmen a little uncomfortable. They thought: “Forget it. I can just stick to my province and even if I sell to other provinces, as long as I don’t get caught by Tai Hua Trading Company will do.”
“Fifth rule: Cannot damage the image of Wind and Rain brand and Tai Hua Trading Company. If there are imitations or fakes in your market, you must first to stop them or inform our company.” Feng Yu said.
Once the Wind and Rain fans are introduced to the southern market, those unscrupulous southern businessmen will soon launch imitations. To put it plainly, there is no technical content for electric fans. Based on the number of electric fans factories in China, anyone factory can produce imitations anytime.
But when the imitation appears, the Wind and Rain electric fans will no longer guarantee Feng Yu the high profits. Feng Yu is making an average of 19 RMB per unit. The profits for 100,000 units is 1.9 million RMB! Feng Yu's initial capital is only slightly more than 300,000 RMB.
Unfortunately, Feng Yu preparation is too late. If he had so much money two months ago, he will have ordered the production of more than 500,000 units and set up his own sales channels. This way, the imitations will have no way to enter the market. Another thing that made Feng Yu frustrated is that he is unable to apply for patents for his fans. Even he is able to apply for the patents, it will also take at least six months. Six months later, it would be winter. Who will still buy his fans?
These electric fans are also considered a one-time business. Feng Yu is able to do it this year but this business cannot be done again next year. Feng Yu knew that next year, these businessmen will be getting their goods from other places or start their own productions. But, this summer is enough for Feng Yu to become a millionaire!
Actually, Feng Yu had wanted to set 108 rules but he was afraid that these businessmen will run away.
Anyway, these five rules are enough. If these businessmen followed his rules, then he can still do these electric fans business next year.
The four businessmen from the repeated provinces had also discussed among themselves. All of them are unwilling to quit. So, they decided to share the market.
Of course, Feng Yu will not refuse them. Most of these businessmen do not have enough funds for the minimum order of 5,000 units. They still need to borrow money or find someone to cooperate.
But Feng Yu had a pleasant surprised. These four provinces wanted more than 5,000 units. They had divided the province themselves and they can estimate how many fans can be sold in their own areas.
When the rich fatty heard that they can order more than 5,000 units, he thought: “Since we can order more units, then can we be the dealers for two or more provinces?”