Chapter 99 – Settling the Sales Channels
“Director Feng, we will not do any promotions for your sugar. There is no room to discuss for this, but we will place your sugar together with your soybean oil, and it will be at an eye-catching place of the store. This is the biggest concession I can give.”
Feng Yu saw Zhou Kehua’s firmed attitude and knew that there was no point bargaining further. Anyway, he still has advertisement slots in the papers and TV stations. The sales of his sugar will not be too bad.
Feng Yu only wanted to sign a three years contract with the Food Department and nothing more than that. In 1993, this department will cease to exist. Actually from this year onwards, after the opening up of the food and oil market, the status of the Food Department had been declining.
Now, Zhou Kehua had a lot of authority but in 2 years’ time, he would either be transferred to another department or forced to move to a more relaxed position.
“Wait, Director Feng, why is your sugar so expensive? The supplier rates you gave us is almost as expensive as our retail prices.” Zhou Kehua saw the contract and said.
“Ours is pure fine sugar, and it is sweeter. Also, the sugar will be in packets. We do not sell in bulk. Furthermore, this sugar is produced using the most advanced techniques from the Soviet Union. It will not be discolored easily or attract pests. These are somethings that the sugar produced by your department can do.”
In this era, people buy sugar loosely in small paper bags. The sugar in the Food Department’s stores was stored in a large paper bag. If they did not store the sugar correctly, it could attract ants easily. After people buy the sugar, they would transfer to small bottles to store them. The sugar also turns yellow easily. This was not as attractive as packing the sugar in small packages. Sugar is not like salt or cooking oil. No one uses sugar every day.
“We also produce fine sugar. The cost is not that high. Who would buy your sugar when you price it so high?” Zhou Kehua felt that Feng Yu was messing around. People buy the cheapest product typically. Who would buy the most expensive ones?
“Chief Zhou don’t need to worry about this. You just sell according to the prices I listed. If the sales are not good, you can look for me, or you can be a consignee. I will give you 2 cents for every packet sold.”
Feng Yu sighed in his heart. Old mindset thinking that no one will buy expensive things. Wait for another 2 years, people then, will not buy food products if they were selling at low prices!
“Consignment? No, we will not do consignment. Then let’s see if your sugar will sell at this price. If there is no one buying, then you don’t blame me if I don’t order more of this sugar!”
“Fine. If you have no problems with these terms, then please sign.”
Feng Yu left with the contract. Chief Zhou lit a cigarette and was deep in thoughts. Why was that kid so confident that people will buy his sugar? Isn’t those regular fine sugar? Why were they priced so much higher?
Feng Yu made a phone call to notify the newspaper agency to release the advertisements for the sugar. It was still soft-sell advertisements. These advertisements will continue for the next 2 weeks. Feng Yu believed that with the people’s current knowledge, they would be buying his sugar. Also, with the help of the TV advertisements, everyone would remember this Tai Hua Fine Sugar.
The contract was photocopied to a few dozen copies, and Feng Yu arranged Wu Zhigang and the rest to other areas in the province. The cooperatives were still smaller compared to the Food Department’s stores. People in the cities prefer to go to the Food Department’s stores to purchase oil or rice. Feng Yu wanted the Food Department of that area to look at the contract signed between him and Bing City. He will then use the same conditions to sign a similar contract with the Food Department of those areas. This would let most people know about Tai Hua’s brand.
……
“What are you here? Is it a holiday today?” Feng Xingtai saw Feng Yu at the factory, and he did not behave like other fathers, who were happy to see their sons. He asked angrily: “You skipped school again?”
“Dad, don’t hit me first. I have something important. Have you discussed with the Farm Department Officer? Is the pig farm buying our animal feed?” Feng Yu dodged Feng Xingtai’s slap by jumping back.
“The officer had agreed to try it out. But the quantity will not be large. There are not many pigs at the pig farm anyway. What are we going to do with these animal feed? You still asked me to increase the production! Also, the sugar is stockpiled in the warehouse. Why not we sell it to the candy factory to make candies.”
When Feng Xingtai thought of the sugar, he starts to get worried. Other people sell their sugar in a big sack, and when their customers want to buy sugar, they would weight and put the sugar into smaller plastic bags. Only his son would package the sugar into small packages. These packaging also cost money! Now all the sugar were still lying in the warehouse. They will even make a loss if they sell it to the candy factory!
Feng Yu waved the contract: “You see this? This is the sales channel for the sugar. I have settled it. Contact the trucks for delivery. The candy factory wants our sugar? They can dream on!”
“The sales channel is settled? That’s great. Eh? This is Bing City’s Food Department seal? Finally, I can rest assured. If not, the money earned from soybean oil would be used to cover the losses from the sugar. Right, what about the animal feed? There are not many people in our village that rear pigs. One week’s production can last us more than a month!”
“Dad, did you tell the Farm Department that we want to take over the Pig Farm as a contractor?”
“Contract your head! I am already so busy with the factory, you want to work me to my grave?” Feng Xingtai was furious and raised his hand to slap Feng Yu. But he noticed that after Feng Yu had finished his last sentence, he had stepped two steps back from him. He could not reach Feng Yu.
“Dad, I have told you many times. A good boss does not do everything himself. Must know how to use people. I asked you to rest, but you just don’t listen. We can hire two experts in pig farming from the Agricultural Technology Station. We have the animal feeds now. If our pigs can grow faster, then our animal feeds will be selling well!”
“You are talking nonsense. Don’t need to manage? Do you know how hard it is to rear a pig? When you are young, we also reared a pig. Do you know how tiring it was? If the pigs fall sick, you will be so busy till you fall sick too!”
“We will hire people to take care of the pigs. Your job next time will be drinking tea, watching TV and playing Mahjong every day. Occasionally, you can walk around the factory, and if you are bored, you can count your money in your passbook. If not, you can go on holidays with me. China is big and should be enough for the both of you to tour a few years. When you are bored with China, you can go overseas. Anyway, you don’t need to worry about money in your lifetime.” Feng Yu starts to persuade his father.
“Get lost. Your father is still not that old. What drinks tea, watch TV and play Mahjong every day? Talk about yourself. You should be studying hard to get into a good university. I don’t expect you to be someone great, but you should not be worse than others.”
“Don’t worry. I will definitely be entering university. I can even enter the best university in Beijing. Let’s not talk about this. We shall go and look for the Farm Department Officer first to be the contractor for the pig farm. We might even be in time for the New Year and Lunar New Year festivals.”
Feng Yu dragged his father to look for the Farm Department Officer. When the officer heard that Feng Xingtai was looking for him, he immediately put down his work and went out to welcome him. This was the first private factory in the district, and the factory was renowned throughout the whole province. This factory was built during his time at the district, and this was considered his achievement. Maybe next year he might be transferred to other departments and be the leader there.
“You want to contract the pig farm? Old Feng, I had agreed on behalf of the pig farm to buy your animal feeds. Why are you trying to rear pigs yourself?”
The officer was feeling weird. The sales for animal feeds was not doing well, so they decided to rear pigs to consume their own animal feeds? What logic is this?
“That’s right. Officer, we do not want to contract the pig farm. We want to buy the pig farm and the land behind it. Next year, we want to build a bigger pig farm. A modernized pig farm!” Feng Yu used the pencil to circle an empty plot of land on the farm map.
“Modernized pig farm?”
“Modernized pig farm! Machines to feed animal feeds, water and clean up the pigsty! It will only require a few people to rear more than a thousand pigs!” Feng Yu said firmly.