2003: Starting with Foreign Trade

Chapter 194 Establishment of the Distribution System

The filming of the advertisement lasted for two days. Two days later, Tan Jincheng left Hengdian and drove back to Ningbo.

It was the weekend, and it was already late when Tan Jincheng arrived in Ningbo. So he didn't rush back to Beicang, but instead found a hotel near Ningbo University to check in.

"Let's go look at houses in a while. How about I buy a house near your school?" Tan Jincheng said, putting his arm around Gu Qingqing.

Having tasted the forbidden fruit for the first time, the experience was indescribable. After being apart for a few days, the young couple couldn't wait to meet again.

"Why buy a house? You're so busy, and you can't come here often. It's such a waste."

“I can stay here after get off work. I live alone anyway, so it doesn’t matter where I stay.”

"No, it will affect my studies."

"Really not?"

Silent all night.

The next day, Saturday, Tan Jincheng took Gu Qingqing, Qin Siyu, and Zhao Xianbo to Beicang. Their filming work for the week was not yet finished, and they were currently mainly shooting spring clothes.

Now that winter has arrived in Ningbo, the daily high temperature has dropped below 10 degrees Celsius. Shooting spring clothes in this kind of weather, even indoors with air conditioning, is still quite unpleasant, and you can easily catch a cold while changing clothes.

Money is hard to earn, and life is tough.

On the way back, Qin Siyu made conversation by asking, "Boss Tan, is Liu Yifei pretty?"

"It's quite pretty," Tan Jincheng said seriously after thinking for a moment.

To say she's not pretty would be a lie, but 18-year-old Liu Yifei is still too naive. She's quite wealthy at such a young age, and her family even owns an airport.

In comparison, Qingqing was much poorer.

Although Tan Jincheng had her contact information, he never contacted her privately.

In short, it's not my cup of tea.

"How does she compare to Qingqing?" Qin Siyu asked, looking thoughtfully at Gu Qingqing.

"They each have their own merits. If we take away the celebrity aura, I think my Qingqing is better."

"Haha, Mr. Tan, you're so good with words."

Tan Jincheng said solemnly, "I'm telling the truth."

Gu Qingqing, sitting in the passenger seat, smiled. She had met Liu Yifei before; she was really beautiful and had a great temperament. She was nothing like the ordinary person her brother had described. In fact, Gu Qingqing had been a little worried when she first met her.

However, since her brother treated Liu Yifei no differently than Chun Ge, Gu Qingqing felt much more at ease.

Besides, worrying about this is useless; let nature take its course.

After arriving in Beicang, Tan Jincheng didn't have time to spend with the three of them. He had a lot of things to sort out recently and no time for romance.

Like many industries, electric scooters also have their own off-season and peak season.

After entering November, with the arrival of winter, electric scooters enter the off-season for sales in various regions. However, starting in July, the usage rate of electric scooters increases, and sales in various markets begin to rise rapidly. This is the traditional peak season for the sales of electric scooters.

However, in the winter of 2005, when Beijing announced in December that electric scooters could be legally registered and driven on the road, electric vehicle companies and sales markets across the country received a much-needed boost.

Production and sales are booming, with major companies gearing up for the competition, resulting in a situation where the off-season for electric vehicle sales is not slow in various regions.

Suddenly a spring breeze comes.

The policies in the capital city act as a weather vane, and various regions have sprung up their own policies to lift restrictions on electric vehicles.

"This thing is almost like buying stocks. It goes up like crazy whenever a policy comes out, haha." Tan Jincheng laughed heartily in his office.

The national electric vehicle market is divided by administrative regions. Currently, FlashTech mainly targets the East China, South China and Guangxi provinces in the Southwest, focusing its efforts on provinces such as Jiangsu, Zhejiang, Shanghai, Anhui, Henan, Guangdong and Guangxi.

The marketing department's field sales team mainly covers these areas. Currently, Wu Zhenping is mainly responsible for the East China market, while Lin Yumin leads the team south to be responsible for the South China and Guangxi province markets in the southwest.

Promoting a brand during the traditional off-season isn't a great option, but there's no other way. FlashTech's production capacity isn't fully utilized yet, and if we wait until next year to promote it, it will be too late. We have to plan ahead.

Fortunately, policies are getting better, and there are relatively fewer competitors during the traditional off-season. Judging from the feedback from Lin Yumin and Wu Zhenping, among the three offline promotion models designed by Tan Jincheng, the city partner model is the most popular due to its relatively stringent conditions.

The franchisee model is still relatively new and quite advanced these days; most merchants cannot accept this model.

In his previous life, when he was doing business, Tan Jincheng had also studied this method. The commercial franchise management conditions should have officially come into effect on May 1, 2007, which is still a year and a half away.

The distribution of these management regulations signifies that the franchisee model has officially entered a standardized phase in the country.

While franchise models exist nationwide, they are primarily used by large brands like KFC. For emerging brands like FlashTech, it's difficult for ordinary entrepreneurs to build trust.

But don't rush. Once Fengchi's advertising campaign is fully launched, along with the franchise hotline, many people should be interested.

There are actually many types of distributor models, which can be divided into three types: agency, exclusive sales and direct sales. Most people are probably already familiar with the details.

Due to its unique characteristics, the electric vehicle industry is not well-suited for online sales. Although the internet is developing rapidly, and consumers may be willing to buy large items like computers online, it is still quite difficult to get them to accept buying electric vehicles online.

The reason for this is that it has not been cultivated into a consumption habit.

Currently, FlashTech's distribution model is still modeled after Gree Electric Appliances. Although this model has been criticized in the Internet era for being too unwieldy, it is still very advanced for today.

Gree Electric Appliances implemented this model around 2009. This model was a major contributor to Gree Electric Appliances' ability to accurately predict operating revenue and was admired and imitated by many companies for a long time.

Gree Electric Appliances adopts an external sales model with a general agent nationwide. The general agent is a manufacturer-distributor joint-stock cooperative company, which is mainly composed of regional sales companies.

By integrating the distribution channels across the country through the general agent, the national regional sales channels are integrated, ultimately becoming the sole agent nationwide.

A simple explanation is somewhat similar to a pyramid structure. There is only one general distributor nationwide, while regional sales companies are branches of the general distributor. They are mainly responsible for the overall management of product distribution, storage and logistics services, and setting different prices based on whether the sales target is a wholesaler or an individual seller.

The pricing documents were then distributed to lower-level distributors, who were required to strictly adhere to them.

Generally speaking, regional sales companies will wholesale to city and county-level agents at a markup of about 10%, and then allow city and county-level agents to distribute the goods to various sales terminals at a markup of 6% to 8%.

Ultimately, each sales terminal can add a 10% to 15% markup to sell the product to the end user, that is, the final consumer.

FlashTech entrusts the production of its electric scooters to its general distributors, who are at the very top of the pyramid. The general distributors account for 70% of FlashTech's revenue. FlashTech binds its distributors through effective channel policies such as rebates, maintaining a stable channel structure and ensuring the efficient operation of the channel.

The national general agent was introduced by Zhao Jinsheng; it's a very powerful trading company headquartered in Shanghai.

FlashTech has established a new trading company with FlashTech through equity investment. This stronger trading company will also send a team to cooperate with FlashTech's marketing department for this marketing campaign.

As for how Zhao Jinsheng met him and what connections they had, Tan Jincheng neither cared nor wanted to. After the city investment company invested, the relationship between the two parties was basically intertwined.

This behavior does not involve any business violations and is also beneficial to FlashTech's rapid market expansion. There is absolutely no need to ask so many questions.

As for whether it will become too big to handle in the future, there is no need to worry. The development rights for the overseas market of the electric scooter are still in the hands of FlashTech. FlashTech will also participate in the Canton Fair next year.

We don't need to worry about the results; it's good to let foreigners see it first.

The new trading company's full name is Shanghai Shengshi Shanchi Trading Co., Ltd.

BJ Shengshi Gree International Trade Co., Ltd. holds a 20% stake in the company. Flash Technology does not interfere with the allocation of the remaining regional shares.

Besides what he had seen and heard in his previous life, Tan Jincheng had actually thought of this model a long time ago. Only when interests are bound together is it safest, and only cooperation is the most effective and fastest way to expand in the business world.

It's just that I was a nobody before, too weak, so even if you wanted to cooperate, no one would pay attention to you.

"Bring me the production report so I can take a look." As soon as he entered the office, Tan Jincheng instructed Zhang Xuhui, who came to greet him.

"Okay, boss, please wait a moment."

The production department records the number of electric vehicles produced each day and reports it to Zhang Xuhui once a week, who then passes it on to Tan Jincheng.

After Zhang Xuhui submitted the latest production report, Tan Jincheng frowned as he looked at it. The production capacity still couldn't keep up. It was too difficult.

The Flash series is still in short supply, and as for the Windmill, there are only more than 4000 vehicles in stock, which is out of the question for dealers. However, it is enough to open a brand flagship store in Beicang with this inventory.

The location for the brand's flagship store in Beicang has already been chosen, and it is currently under renovation. Zhang Qingliang's amateurish renovation team definitely can't handle the design of this kind of brand store, so a professional interior design company must be found. Therefore, Tan Jincheng did not choose to let Zhang Qingliang take charge of this part.

"In that case, let's start with brand stores."

(End of this chapter)