2003: Starting with Foreign Trade

Chapter 29 $10.75 million
The order consisted of 5 pieces of clothing, each priced at $2.15, for a total of $10.75.

The current exchange rate is around 8.23 ​​yuan, which translates to an order of approximately 88.47 yuan.

For foreign businesses, it was a trial run, but for Tan Jincheng, it was a dream start.

"It's a pleasure to cooperate with you. We will arrange production as soon as possible and will definitely not delay the delivery date. Please rest assured, Mr. James."

The moment the contract was officially signed, Tan Jincheng smiled happily.

"It's a pleasure doing business with you, Tan; we will arrange to transfer the deposit to your company's account immediately."

The tall and burly James smiled and said that the young man in front of him, who looked small in comparison, was a pleasant surprise.

At only 19 years old, and without having attended university, he speaks fluent English and communicates very smoothly.

He's thick-skinned, but not offensive; he's very polite.

James was interested in the designs of several samples he had, but unfortunately, his company was too small, and James couldn't believe he could fulfill such a large order.

So James decided to place a small order first to test the waters.

However, James would naturally not say these thoughts out loud.

$10 is just a drop in the bucket for a foreign trader of James's size; if Tan can deliver the goods on time and with high quality, James wouldn't mind having another collaboration.

There's no other reason than that Tan Jincheng's price was cheap enough; other manufacturers were quoting prices of $2.5 or more for similar products of the same quality.

Of course, the young man wasn't stupid. He could offer a cheaper price for the first collaboration, but the prepayment had to be increased from 30% to 40%.

For a small order, the extra $10,000 in advance payment was acceptable to James.

In the foreign trade industry, the most fundamental principle of deposit collection is comprehensiveness. Both parties want to minimize their own risks while keeping the customer's risk within an acceptable range.

Generally speaking, for legitimate foreign trade companies, a 30% deposit and a 70% balance upon presentation of a copy of the bill of lading is a basic, safe, and acceptable payment method.

However, when it comes to actual orders, we will analyze the specific circumstances, such as whether the customer is a new or old customer, and what the customer's creditworthiness is like.

Secondly, there are the order amount, the risk level of the customer's location, and the product itself.

The product itself refers to regular products, customized products, and products for the mass market and niche markets.

However, for some high-risk areas, a 30% prepayment is definitely not feasible, such as in India.

India's reputation in the foreign trade industry is notorious; they are known for their shady practices, and many Chinese foreign trade merchants have been cheated by them.

The specific operation involves, for example, an Indian customer ordering a batch of goods, such as furniture and clothing, from domestic and foreign traders. These goods are basically in the Indian style, which customers from other countries cannot appreciate.

These goods are often quite valuable, and inexperienced domestic merchants, tempted by the large orders, cannot resist the temptation and produce the goods.

Once the merchant has produced the product all at once, the customer will choose to abandon it, and then another Indian customer will come and buy it at a lower price.

At this point, foreign trade merchants had no other choice but to sell at a loss.

Therefore, when cooperating with foreign trade companies with poor credit, such as Indians, it is essential to collect full payment for both deposits and goods, otherwise you will lose money on every transaction.

However, Tan Jincheng did not intend to develop clients like Ah San. At this exhibition, Ah San had quite a few clients who had inquired with Tan Jincheng.

Although I had to deal with them on the surface, I never thought about doing business with them. I just quoted a higher price that they couldn't accept.

Even Lei Jun couldn't handle this country, so Tan Jincheng didn't think he had the ability to profit from dealing with these scoundrels. This collaboration between Tan Jincheng and James was their first, and given the small amount involved, James was willing to accept an extra 10% deposit.

More than ten thousand US dollars is not enough for James's travel expenses this time.

For Tan Jincheng, the extra 10% deposit, while not enough to fully cover the costs, was ultimately a safer option.

If costs can be further reduced, coupled with the preferential policy of export tax rebates, Tan Jincheng estimates that even if this order is cancelled, the loss will not be too great.

Finally securing his first order, Tan Jincheng breathed a sigh of relief.

I've been in Guangzhou for a week now, a week of spending money like water, but at least I've gained something.

If we don't get any more orders, we won't be able to survive.

"Brothers and sisters, it's my treat today! I just signed a deal, haha!" Tan Jincheng said happily before the exhibition hall closed today.

"Haha, Xiao Tan is doing great! You've opened for business faster than we expected."

"Not bad, not bad, your first order ever, definitely worth celebrating. But you can't treat me today, the brothers will chip in to treat you. Order whatever you want."

"That's right, you've been asking for her for several days now, you have to give your sister a chance to shine."

"That's right, Xiao Tan, you can order whatever you like tonight."

After spending a few days together, everyone signed some orders, and everyone received a commission. Tan Jincheng was quite open-minded about the orders he signed.

Once people are financially secure, they naturally get along better.

Finally, everyone agreed that the six of them would chip in their own money and go out for barbecue tonight.

There's nothing a barbecue can't solve; if there is, then have two!
Under the cover of night, a group of people sat at a roadside stall, enjoying a delicious barbecue. Whether it was psychological or something else, Tan Jincheng always felt that these lamb skewers tasted better than those from later generations.

Back at the hotel, Tan Jincheng couldn't wait to call Zhang Xupeng, instructing him to keep a close eye on the company's bank account and coordinate with the finance department. He was told to arrange production immediately once the deposit was received.

Currently, there are 4000 finished products of these two samples. Only another 46,000 need to be produced. As for the defect rate, Tan Jincheng plans to shift the responsibility to the contract manufacturer.

4.6 pieces, at the previous price, would amount to around 40 yuan, which is a considerable sum for the OEM factory.

With sufficient prepayment, it's perfectly acceptable to have them take responsibility for the non-performing loan rate.

The only requirement is that the product must be produced within the specified time and in the required quantity and quality, because there are various subsequent processes such as packaging.

"Great! We've finally opened for business. I've been keeping an eye on the account these past two days," Zhang Xupeng said excitedly.

Then he asked, "So, can you come back now? We can keep an eye on things then."

"I won't go back yet. I'll see if I can get some more orders. If I can get one more, that would be even better."

"Oh, by the way, transfer 10,000 of your money to me, just in case."

"No problem, I'll go to the bank and transfer it to you tomorrow."

If we get another decent order, Jinpeng Trading will be able to maintain normal operations until the Canton Fair next spring.

(End of this chapter)