Chapter 205 – Astronomically Priced Electric Fans Part 2
Feng Yu thought for a while, and he decided to use an old method. He gave all the distributors a piece of paper each to write down the distributor prices, retail prices and the yearly sales target that they were willing to accept.
10 minutes later, Feng Yu collected all the papers and looked through them carefully.
The highest sales target written was 1,500 units, and the distributor price and retail price were 280 RMB and 400 RMB respectively.
The lowest sales target was 300 units, and the distributor price and retail price were 390 RMB and 500 RMB respectively.
Both of these distributors were from big southern provinces, and the sales target had a difference of 5 times!
According to Feng Yu’s temper, he would use the highest sales target to pressure these people. Sales were like cleavages. With some pushing, there will be a deep cleavage.
After Feng Yu had tabulated all the figures, the highest sales target was 1,500 units, highest distributor price was 400 RMB, and the highest retail price was 580 RMB. The lowest sales target was 300 units, the lowest distributor price was 210 RMB, and the lowest retail prices was 330 RMB.
Feng Yu looked at these figures and was in deep thoughts.
It seems that if he continues to ask for high prices, there might be no one who was willing to be the bladeless fans distributors. But Feng Yu was not satisfied if the fans were priced too low.
Why do the bladeless fans be so popular even when it was priced at 500 USD in his previous life? Why in this life, the distributors felt that 100 USD was the max and still thought that it would not sell well?
Feng Yu thought back. The bladeless fans were sold for 500 USD in the US and Europe. Those were developed countries, and the people there had more buying power than China.
Now, the average Chinese’s annual income was not even 1,500 RMB. To use a year’s salary to buy an electric fan with not much features, was something not acceptable to many!
The circumstances were different and could not be compared. Feng Yu thought back, and the first bladeless fan he bought in his previous life was after there was a drop in the prices. He bought it for 200 RMB.
Later, some factories in China got the authorization to manufacture the fans, and the retail prices dropped to less than 100 RMB. But the imported bladeless fans were still selling for more than 500 USD. There were even models that were selling for 1,000 USD!
The purchasing power in China now still could not catch up with other countries.
“Everybody be quiet. After I tabulate the figures, the average retail price that all of you can accept is 588 RMB. the average distributor price is 400 RMB, and the average sales target is 1,500 units.”
Feng Yu just used the highest figures as the average. Anyway, these people would not know if this was the truth. Only a few distributors that had written these high figures were looking down and dare not looked at other distributors.
They were not too optimistic about the market but also not too pessimistic. This bladeless fan was a new product and had a high-tech feel. They could market it the same way as those imported products.
Currently, the Chinese were still very infatuated with imported products. They felt that imported products were better and should be priced more expensive!
But 400 RMB distributor price and retail price of 588 RMB meant that the profit margin was only 45%. After deducting the transportation, their agents’ share of profits, their actual profits were only about 20%.
20% profit was considered high, but the cost of this product was too high. They wondered which idiot wrote such high sales target. Does your province have so many wealthy people?
“Is there anybody that does not want to be the distributor for Wind and Rain Bladeless fans? You can leave now. Don’t worry, it will not affect the rest of our cooperation.”
The distributors were speechless. Rather than asking who does not want to be the distributor, why not try asking who wants to be the distributor. Will not affect other cooperation? That expression of yours, tells everything. Once we leave, you will find ways to stop our other contracts.
Other people might not do such things, but all of them knew that Manager Feng of Tai Hua Trading would do it!
“No one wants to leave? Fine. Since we had worked together for so long, I will not set a high sales target. The southern provinces will be slightly higher, and the northern provinces will be slightly lower. The sales target for the southern provinces will be 2,000 units, and the northern region will be 1,000 units. Reasonable, isn’t it?”
The distributors were all cursing and swearing in their hearts!
Fuck. This is not setting a high target? You had just mentioned that the highest sales target we can accept is 1,500 units and now you added 500 more units? This is not setting a top target? Reasonable?
Someone raised his hand, wanting to say something but Feng Yu waved and continued: “All of you might feel that this bladeless fan’s sales will be low because it is expensive. All of you have a look down on the purchasing power of Chinese. The wages of the working class are not high, but businessmen are earning a lot. All of you had worked for others before. What about now? Every one of you is earning more than a 6 figure annual salary. Do you know how much is this bladeless fan selling overseas? Just change the currency to Rubles!”
What? This bladeless fan is selling overseas for 580 Rubles a unit? That’s more than 3,000 RMB! It cost almost as much as an air conditioner. Who would buy it?
The air conditioner cost only a few thousand, but the installation charges were more expensive. The total added up to about 10,000 RMB. But overseas was different from China. There was no lack of electricity. Why would people choose the fans over air conditioners?
“We have bought the advertising slots at CCTV, and it is all primetime slots. This commercial was directed by Baldy Chen, and he is also the star of the commercial. In the past, all of you also felt that Songjiang Motorcycles will not be selling well. But what about now? With CCTV advertising, celebrities’ endorsements, your sales figures increase every month. This bladeless fan will be the same. The sales will not be bad! If you do not want to be a distributor, you can be an agent. The commission will be the same as Songjiang Motorcycles. About 5%.”
When Feng Yu said agent, the distributors became suspicious. They were the agents for Songjiang Motorcycles. It was not that they do not want to be the distributors. It was because they do not have enough cash.
Since Feng Yu dares to ask them to be an agent, that means Feng Yu was very confident in this product. All the products which Feng Yu was optimistic about, were all popular!
The distributors looked at each other. They wanted to know what others were thinking.
The Fatty Huang from the Guangdong province was the first to stand up and said: “Manager Feng, I am not sure what others are thinking but I, Huang Lun, will accept your condition!”
Damn. The rest of the distributors looked at Fatty Huang angrily. Every time Manager Feng sets some condition, he would be the first to accept. If it weren’t the both of them had different surnames, they would be suspected relatives!
Feng Yu nodded: “Mr. Huang, you are the first one to sign the contract? Good. I will give you a 5% discount on your distributor price!”
What?
The other distributors’ jaws dropped. Damn. This was a good deal. All of them were regretting. If they had known earlier, they would be the first person to accept Feng Yu’s terms. But since they can’t be the first, they could be the second. All the distributors start to accept Feng Yu’s conditions. Even though they did not get any discount this time, they could at least leave a good impression, and maybe next time there will be a discount for them!
Feng Yu smiled. You think I don’t know that all of you had contacted each other and wanted to work together to lower the distribution price? Just a simple trick like this can easily break up your alliance.