Rebirth of the Industrial Tycoon

In the eyes of later generations, placing an order and paying a deposit is a matter of course.

However, for Chinese companies that have come from the era of planned economy, the deposit is a very unfamiliar thing.

In the era of planned economy, the products that enterprises need to purchase are planned in advance. At that time, the purchase of goods did not rely on money, but on the list given by the planning commission.

In that era when the order was accepted but the money was not accepted, when purchasing, there was no need to pay a penny deposit, and the order was taken directly to pick up the goods. Therefore, there is no need to pay any deposit for purchases between enterprises.

In the early days of reform and opening up, the country gradually shifted from a planned economy to a market economy. However, at this time, various commodities in the country were generally scarce. Even if companies used cash to purchase, they might not be able to buy the commodities they needed. The deposit naturally becomes a meaningless thing.

For example, when Li Weidong went to the Red Star Factory to return the goods, the tires produced by the Red Star Factory were definitely in short supply. The buyer took the money and blocked the door of the Red Star Factory Sales Section. The Red Star Factory produced a batch of products, and the buyer immediately paid for the delivery. Give others the chance to pay a deposit!

For many products that are in short supply, it will take a long time to get the goods when the buyer pays the payment in advance. In other words, there is not enough production to sell.

Because of this, domestic companies have not had a deposit for a long time. If you want to buy something, you can directly take the payment for the goods. If you are familiar with some relationships, you can send the goods first and then make the payment.

This is obviously a business model purely based on reputation, and it only appeared in that business environment at that time.

This is not because the Chinese people at that time were honest and trustworthy and would not default on their debts, but mainly because the enterprises at that time were all state-owned enterprises and collective enterprises, and the latter were all guaranteed by the state.

As a result, a large number of state-owned enterprises have no money to repay, thus causing the triangular debt problem.

The large-scale appearance of triangular debt has also made enterprises realize that even state-owned enterprises are unreliable and will not pay back their debts, so things like deposits have gradually become popular among domestic enterprises.

In international trade, a deposit must be paid for orders.

When receiving foreign trade orders in later generations, the orderer will generally be required to pay a deposit of 25% to 30% first. In some industries, the deposit will be higher. If Indians ask for goods, they usually pay the full amount before delivery.

In China in the 1980s, in order to earn foreign exchange through exports, the deposit was relatively low. The deposit for many orders at the Canton Fair was even less than 10%, and some old customers could even offer cash on delivery discounts.

After all, China at that time was running a trade deficit for years and was really short of foreign exchange.

For foreign trade companies, it is not a big loss if the foreign businessman only pays a small deposit and then regrets it.

At that time, the products that could be exported to earn foreign exchange were also in high demand in China. If foreign businessmen went back on their terms, they would directly export them and sell them domestically. Some people wanted them. For what!

Once upon a time, export to domestic sales was still a symbol of high-end goods, and goods exported to domestic sales could be shown off in front of relatives and friends.

Foreign businessmen who came to participate in the Canton Fair have long been accustomed to the low deposit, especially for big customers like Hayward, who can enjoy additional preferential treatment.

Now Li Weidong proposed to ask for a 50% deposit, which has exceeded the general rules of international trade, and far exceeded the average level of the Canton Fair, which immediately made Hayward dissatisfied.

"Mr. Li, in normal international trade, the 30% deposit is already the maximum amount! You want a 50% deposit, is it too high?"

Hayward paused, then said, "We've had two pleasant collaborations before,

Are you still worried that our Costco will default on our bills? "

Li Weidong smiled and explained: "Mr. Hayward, you misunderstood me, of course I trust Costco's reputation, and I also believe that you will pay. The reason why I want a 50% deposit is for other reasons.

Mr. Hayward, you should know that the price of $40 for a toaster is very cheap. There is no such low price as mine in the world. However, the reason why I put forward such a low quotation is entirely the result of compressing various production costs. This includes the purchase cost of components.

When we purchase parts, the more quantity we purchase, the greater the discount, so if I want to reach a low price of 40 US dollars, I have to purchase parts in large quantities, and this kind of large quantities For my factory, the procurement will also cause relatively large cost pressure.

That's why I need Costco to provide a 50% deposit in advance, so that we have enough funds to purchase parts in large quantities, thereby reducing costs, otherwise, our toaster cannot be sold for only $40! "

Hayward frowned slightly, as if thinking about the authenticity of Li Weidong's words.

Li Weidong went on to say; "Of course, if Mr. Hayward is not satisfied with paying the 50% deposit first, we can negotiate again, but we have to increase the price, for example, if we pay the 30% deposit first, I will I can give you a quote of 43 dollars, I can't do a loss-making business!

As for our reputation, Costco does not need to worry about it. All companies that can participate in the Canton Fair are guaranteed by the state. There is nothing in the world that is more reputable than a state guarantee. What's more, we have had two pleasant cooperations before, and I think Costco can totally trust me. "

Hayward thought for a moment, then pulled out his calculator.

"For a quotation of US$40, the purchase of 200,000 units is US$8 million, which is a huge purchase. If it is calculated as a 30% deposit, a deposit of US$2.4 million needs to be paid in advance; if it is calculated as a 50% deposit If you do, you need to pay a deposit of $4 million first, which is a difference of 1.6 million.

No, this account is not calculated like this. If the deposit is 30%, it is a quotation of 43 US dollars. The total price of 200,000 units is 8.6 million US dollars, and the deposit will be 2.58 million US dollars at that time! A difference of $1.42 million in the deposit.

In this way, if I paid an additional deposit of 1.42 million, I would have saved 600,000 dollars in purchase price. That deal is still a good deal. Even if the $1.42 million is given to an investment bank on Wall Street, it may not be able to earn 600,000 in two or three months! "

Thinking of this, Hayward nodded: "Okay, I can promise you to pay a 50% deposit first!"

"The plan is successful!" Li Weidong let out a sigh of relief.

Then Li Weidong asked: "Mr. Hayward, in addition to the toaster, I have an air fryer here. This year's air fryer is also very cheap. I don't know if you are not interested?"

"What's the price for your air fryer?" Hayward asked.

"At the Canton Fair in October last year, my quotation was 200 US dollars, this year's 20% discount, only 160 US dollars!" Li Weidong said.

"So much cheaper?" Hayward was taken aback.

After only half a year of work, the price has been reduced by 20%. This price reduction is still very strong.

Li Weidong smiled and said, "Mr. Hayward, if you are willing to pay some more deposit, the price can be negotiated!"

…….

The next day, when Wal-Mart's Gordon appeared at the Canton Fair, he was also impressed by the $40 toaster.

This price is indeed too attractive, and there is no such cheap toaster in the world.

What's more, Costco's Hayward has purchased 200,000 units, so Walmart must not be left behind.

Just imagine, if Costco came out with a cheap toaster and Walmart didn't, that would mean Walmart would lose that part of the market.

So Gordon also ordered 200,000 toasters without hesitation, and also accepted a 50% deposit.

A toaster signed a huge order of 16 million US dollars, and the colleagues around were crying!

...

Manager Xue was called to the office by Jiang Aiguo.

"Manager Xue, look at this thing." Jiang Aiguo put a brand-new toaster in front of Manager Xue, and then said, "This thing is specially used for baking bread, can you see if it can be imitated?"

"Li Weidong is also selling this kind of thing. I heard that Costco and Wal-Mart each purchased 200,000 units, which adds up to 16 million orders!"

Manager Xue said, picked up the toaster in front of him, and then shook his head: "No, this toaster doesn't seem to be the same as Li Weidong's. There are differences in appearance and size."

"This one in your hand was specially brought over from Hong Kong Island. It's just such a small thing, and it costs more than 600 Hong Kong dollars! And this is the cheapest one. Take a closer look, Your factory can make it!" Jiang Aiguo said.

"It's just this little thing, it can be sold for more than 600 Hong Kong dollars, so expensive?" Manager Xue hesitated for a while, then said, "I originally wanted to disassemble it and see the structure inside. If you say this, the leader, I can I dare not take it apart.”

"It's okay, just dismantle it. Although this toaster is quite expensive, if you can imitate it, it can create millions of dollars in foreign exchange." Jiang Aiguo said.

"That's fine, I'll dismantle it. If it's broken, the leader can't blame me!" Manager Xue said, took the tools, and began to dismantle the toaster in front of him.

Jiang Aiguo said: "I have seen this kind of thing when I entertained foreign businessmen before, but I didn't expect such a small thing to be sold so expensively. If I knew that this thing could be exported to earn 16 million foreign exchange, I would You guys have been imitating it long ago, so what about Li Weidong! Now, 16 million US dollars has been taken away by Li Weidong again."

Jiang Aiguo complained that Manager Xue had already dismantled the toaster.

"It turns out that the structure is so simple, just put a few heating rods in an iron box!" Manager Xue said.

"According to this, can your factory copy it?" Jiang Aiguo asked immediately.

Manager Xue nodded: "This thing is very simple, we can imitate it, and the materials can be bought from China."

"That's great, take this sample first, and after the Canton Fair is over, go back and imitate it immediately." Jiang Aiguo said.

Manager Xue frowned: "Leader, I feel something is wrong."

"What's wrong? What's wrong?" Jiang Aiguo continued: "You just said that this thing is very simple, but don't tell me, you can't make it!"

"Leader, let me do the math first." Manager Xue's notebook, calculated on it.

After a while, Manager Xue raised his head and said, "Leader, Li Weidong also sells this kind of toaster, right? I remember this toaster. His price was $40, right?"

Jiang Aiguo thought for a while and then replied, "It's $40! What's wrong? Is there any problem with this price?"

Manager Xue pointed to the notebook in his hand and said, "I just calculated the cost. If you assemble this toaster, it will cost about 40 US dollars. If Li Weidong sells it to a foreign businessman at the price of 40 US dollars, he will If you don’t make money at all, you might even lose money!”

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