Reborn Industrial Tycoon

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

However, for Chinese enterprises that came from the planned economy era, deposits are a very unfamiliar thing.

In the era of planned economy, the products that companies needed to purchase were all planned in advance. At that time, purchasing goods did not rely on money, but on orders given by the Planning Commission.

In those days when orders were accepted but not money, there was no need to pay a penny deposit when purchasing. You could just take the order and pick up the goods. Therefore, purchases between enterprises naturally did not require any deposit.

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

The deposit will naturally become meaningless.

For example, when Li Weidong went to Hongxing Factory to return goods, the supply of tires produced by Hongxing Factory was definitely in short supply. Buyers blocked the door of the sales department of Hongxing Factory with money. After Hongxing Factory produced a batch of products, the buyers immediately paid the money to take delivery of the goods. How could it happen?

Give others a chance to pay a deposit!

For many products that are in short supply, it will take a long time for buyers to get the goods after paying for them in advance. In other words, the products produced are not enough to sell.

Because of this, domestic companies have not had deposits for a long time. If you want to buy something, you can just take the payment directly. For some people with whom you have a good relationship, you can just ship the goods first and then pay later.

This is obviously a business model that relies purely on reputation, and it could only appear in the 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. It was mainly because the enterprises at that time were all state-owned enterprises and collective enterprises, and they were backed by state guarantees. State-owned enterprises owed money to each other, so were they afraid of not paying back the money?

As a result, a large number of state-owned enterprises did not have the money to repay, thus creating a triangular debt problem.

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

In international trade, a deposit must be paid when placing an order.

When receiving foreign trade orders in later generations, the ordering party is generally required to pay a deposit of 25% to 30% first. In some industries, the deposit is even higher. If an Indian wants the goods, they usually pay the full amount before shipping.

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

After all, China at that time had been running trade deficits for years and was really short of foreign exchange.

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

At that time, products that could be exported to earn foreign exchange were also in short supply at home. If foreign businessmen regretted it, they could directly export to domestic sales. There were many people who wanted them, and companies made a lot of money by selling them, and they could also earn a deposit. Why not

Why!

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

Foreign businessmen who come to participate in the Canton Fair have long been accustomed to low deposits, especially large customers like Hayward, who can enjoy additional preferential treatment.

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

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

Hayward paused and then said: "We have had happy cooperation twice before. Are you still worried that Costco will default on its debt?"

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

Mr. Hayward, you should know that the $40 quotation for the toaster is very cheap. There is no such low quotation in the world. However, the reason why I proposed such a low quotation is entirely the result of compressing various production costs.

.Including the purchase cost of parts and components.

When we purchase parts, the more we purchase, the greater the discount will be. So if I want to reach a price as low as 40 US dollars, I have to purchase parts in large quantities, and this kind of large quantity

The procurement will also cause relatively large cost pressure for my factory.

That’s why I need Costco to provide a 50% deposit in advance, so that we can have enough funds to purchase parts in large quantities and reduce costs. Otherwise, our toaster cannot be sold for only 40 US dollars!”

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

Li Weidong continued: "Of course, if Mr. Hayward is not satisfied with paying a 50% deposit first, we can still discuss it, but in terms of quotation, we have to increase it. For example, if we pay a 30% deposit first, we will

I can give you a quotation of US$43. I can't do business at a loss!

As for our reputation, Costco doesn’t have to worry. All companies that can participate in the Canton Fair are guaranteed by the state. There is nothing more reputable than the state guarantee in the world. What’s more, we have had two happy cooperations before.

, I think Costco can completely trust me."

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

"With a quotation of 40 US dollars, the purchase of 200,000 units is 8 million US dollars, which is a huge purchase. If calculated based on 30% deposit, a deposit of 2.4 million US dollars needs to be paid in advance; and if calculated based on 50% deposit

If so, you need to pay a deposit of US$4 million first, which is a difference of US$1.6 million.

No, that’s not how this account is calculated. For a 30% deposit, it’s a quote of US$43. The total price of 200,000 units is US$8.6 million, and the deposit will then be US$2.58 million! There is a difference of US$1.42 million in deposit.

.

Calculating it this way, if I pay an extra deposit of 1.42 million, I can save 600,000 US dollars in payment. So this deal is still a good deal. Even if 1.42 million US dollars is given to a Wall Street investment bank, it may not be able to be paid in two or three months.

Earn 600,000 within a month!”

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

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

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

"How much is your price for your air fryer?" Hayward asked.

"At the Canton Fair in October last year, my quotation was US$200. This year, with a 20% discount, it only costs US$160!" Li Weidong said.

"So much cheaper?" Hayward was surprised.

In just half a year, the price has been reduced by 20%. This kind of price reduction is still very powerful.

Li Weidong smiled slightly and said, "Mr. Hayward, if you are willing to pay more deposit, we can negotiate the price!"

….

The next day, when Gordon from Wal-Mart showed up at the Canton Fair, he was also impressed by the toaster that cost 40 US dollars.

This price is indeed too attractive. There is no such cheap toaster in the world.

More importantly, Costco's Hayward has purchased 200,000 units, so Wal-Mart must not fall behind.

Just imagine, if Costco launches a cheap toaster but Wal-Mart does not have it, it means Wal-Mart will lose this part of the market.

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

A huge order worth 16 million US dollars was signed for a toaster, and colleagues around him were all crying!

…

Manager Xue was called to the office by Jiang Aiguo.

“Mr.

"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 an order of 16 million!"

Manager Xue said, picked up the toaster in front of him, and then shook his head: "No, this toaster seems different from Li Weidong's. There are differences in appearance and size."

"The thing you have in your hand was specially brought over from Hong Kong Island. Such a small thing 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.

"Just this gadget can be sold for more than 600 Hong Kong dollars. How expensive is it?" Manager Xue hesitated for a moment and said, "I originally wanted to take it apart to see the structure inside. But after your leader said this, I can't

I don’t dare to dismantle it.”

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

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

Jiang Aiguo said: "I have seen this kind of thing before when I entertained foreign businessmen, but I didn't expect that such a small thing could be sold so expensive. If I had known that this thing could earn 16 million in foreign exchange from export, I would have

I have asked you to imitate it a long time ago. In that case, what would happen to Li Weidong? Now, the sixteen million US dollars has been taken away by Li Weidong again."

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

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

"So, can your factory imitate it?" Jiang Aiguo asked immediately.

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

"That's great. You can take this sample first. After the Canton Fair is over, you can imitate it immediately when you get back." Jiang Aiguo said.

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

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

"Boss, let me do the math first." Manager Xue started doing the calculations in his notebook.

After a while, Manager Xue raised his head and said: "Boss, Li Weidong also sells this kind of toaster, right? I remember this toaster, his price is 40 US dollars, right?"

Jiang Aiguo thought for a while and replied: "It's 40 US dollars! What's wrong? Is there anything wrong with this price?"

Manager Xue pointed to the notebook in his hand and said: "I have just calculated the cost. The cost of assembling this toaster is almost 40 US dollars. If Li Weidong sells it to a foreign businessman for 40 US dollars, he will

You won’t make any money at all, and you might even end up losing money!”