2003: Starting with Foreign Trade

Chapter 21 Agreement on Samples
After repeated bargaining and persuasion, Tan Jincheng finally ordered 9100 pieces of clothing for 8 yuan, which is less than 8.8 yuan per piece on average.

Zhang Haiping had never seen such a persistent young man.

"Mr. Zhang, the formal contract will be signed with you in about two days. But before that, please have your workers produce 40 samples."

Seeing Zhang Haiping's gritted teeth, Tan Jincheng felt a little embarrassed; however, the samples still needed to be produced, and four sets of samples would require at least 40 pieces of clothing.

Upon hearing this, Zhang Haiping stared at Tan Jincheng speechlessly for a long time. It was one thing to be able to haggle over the price, but to be so shameless was another.

"Well, we can pay for these 40 items."

"Alright, it's just a few hundred dollars, I'm not that stingy; but with your thick skin, it's hard for you not to succeed."

"Not at all, Mr. Zhang is too kind. We're just doing a small business."

"Then it's settled. We'll come over in two days to sign the formal contract. We'll ask Mr. Zhang to give us the samples then."

"No problem, you can rest assured about the quality of our samples. Our machining skills are excellent."

Then, Zhang Haiping looked at Tan Jincheng and said, "But let's make it clear first, we will only officially start work after 50% of the prepayment is received."

"No problem, once the formal contract is signed, the advance payment will be transferred to your factory's account immediately," Tan Jincheng said confidently.

When they first started discussing cooperation, Tan Jincheng would try every means to lower the unit price of the samples, and he would also argue his case regarding other terms of the contract.

However, Tan Jincheng did not change his mind about the payment method requested by Zhang Haiping. He felt that he was in a weaker position at the moment. It would be difficult to gain trust if the prepayment was not made in full during the first cooperation.

It was precisely because Tan Jincheng had no objection to the payment method that Zhang Haiping felt his sincerity, which led him to make some concessions on the unit price of the clothes.

Holding the initialed agreement, Tan Jincheng and Zhang Xupeng left satisfied, having made a very fruitful day.

Upon leaving the factory, the first thing Tan Jincheng did was call the agency and use the registered address they provided to process the business license as quickly as possible.

To avoid wasting time, Tan Jincheng had told the agency this morning that if he needed their registration address, he would notify them this afternoon.

By the end of the day, most of the things that could be done had been done, and overall it went quite smoothly.

The two brothers were in a particularly relaxed mood, especially Zhang Xupeng. He had just tried something for the first time and received very good feedback, which made him extremely happy.

Especially since this matter is related to making money.

Zhang Xupeng had already figured it out: even if he couldn't sell a single item from this order, he could still make at least double the gross profit by shipping the goods back to the farmers' market in his hometown.

"Xiao Tan, are these clothes really that cheap at the factory? Then why are the clothes we buy so expensive? Do the manufacturers even make a profit?"

"They're all around this price. I estimate Mr. Zhang didn't make much money on this order; it's more like making friends. But he still made a profit."

"As for why the clothes we bought were so expensive, in addition to the cost of the clothes themselves, we also have to invest in packaging and transportation costs. The actual cost is not just 8 yuan."

However, the profit margin is still quite considerable. In his previous life, Tan Jincheng had been involved in the foreign trade industry, but not in selling clothes.

A typical American-style coffee maker can sell for around 150 to 200 yuan on Taobao, and even on Pinduoduo, it can be found for 99 yuan with free shipping. However, its factory price is generally no more than 20 yuan, and even at that price, the factory can still make a profit.

Tan Jincheng didn't really understand the costs in the clothing industry at the moment, but since Zhang Haiping was willing to accept his quote, whether it was a loss or a profit, it was something he could accept.

You don't need to worry about that.

"I see. So where will we get the money for packaging and shipping costs? What if we don't have enough?"

"When we receive the order, we can collect a deposit; what's there to be afraid of? We'll be collecting US dollars, so even if it's only 10%, we won't be short of money."

Excluding leftover stock, if the cost of each garment can be controlled at $1.5, with 9100 garments and a shipment volume of half, selling each garment at $3 would guarantee that we break even.

The rest is all profit. For every additional 1000 units shipped, we can earn more than 2 yuan. With tax rebates and subsidies, we can earn even more.

If sold at $3 per item, this order could potentially earn up to 100,000 RMB, meaning a profit of more than 100%.

Of course, this is just the most ideal scenario according to Tan Jin's current calculations. It is also possible that it will not sell for $3, or that the unit price will be higher.

The exact gross profit for this order will only be known after the transaction is officially completed, but according to Tan Jincheng's calculations, the gross profit margin should be over 30%.

A 30% gross profit margin would be a highly sought-after business in later years, but in today's rapidly developing era, it's really nothing special.

"Let's go have a good meal. We've been eating at the Grand International Hotel for several meals in a row, and we can't take it anymore."

"You chose the International Hotel last night, and then you chose it again at noon today. I've wanted to say this for a long time!"

"Haha, that's because it's convenient at noon."

Although working on a cruise ship is tough, the food is quite good. Chefs from all over the world serve nearly 2000 guests daily, offering a variety of international cuisines.

In such an environment, the employees' meals would be quite good, especially since it coincided with a holiday when they went home, so they ate relatively well.

It's already quite remarkable that Zhang Xupeng managed to refrain from mentioning that he had been just making do with whatever he could for several meals in a row.

It was around 6 p.m. when I took the bus back to my hotel near Ningbo Vocational College from Xiaxi Village.

Although both are located in the same city, the scenery around Ningbo Vocational College is completely different from that around Xiaxi Village.
There are universities, high schools, hospitals, various residential areas, and large shopping malls nearby, and now is the peak time for shopping.

Students, people shopping after get off work, and strolling around; everyone's face is beaming with smiles.

The area around Xiaxi Village is mostly populated by migrant workers who hurry off work, their faces etched with exhaustion.

"Oh, right; if you go to the factory in the future, you can take the Tianrunfa shuttle bus back at night. It won't cost you anything, but there are time restrictions. Just remember what time it leaves."

Tan Jincheng's sudden remark left Zhang Xupeng speechless.

Happy Mid-Autumn Festival to everyone!
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(End of this chapter)