There is a bug in the space? That's called buff!
Chapter 339 Why is there another round of dumping at low prices?
In the early morning, the hustle and bustle of the Jiangnan medicine market was mixed with an eerie silence.
A huge red banner was hung in front of the Phoenix Chamber of Commerce—all medicinal herbs were on sale at half price for ten days only. Under the banner, bags of herbs were piled up like mountains, and the price tags of twenty commonly used medicinal herbs had been rewritten in a conspicuous manner: angelica had dropped from fifty coins to twenty-five coins, astragalus from forty coins to twenty coins, and even the most common honeysuckle had been reduced from fifteen coins to seven and a half coins.
Uncle Lin and Tang Yiran stood at the window on the second floor of the Xiehe Hall, looking at the scene across the way. The Phoenix Chamber of Commerce had gone all out this time.
Manager Lin said worriedly, "Master, half price! They're going all out. Although the medicinal herbs at our Xiehetang are of good quality, their prices are still much higher. If they hold out for another two weeks, our regular customers might not be able to keep going."
Tang Yiran smiled slightly: Uncle Lin, bring in the account books, let's do some accounting.
A moment later, Tang Yiran opened the ledger and his fingers flew across it.
The Phoenix Merchants Guild imports medicinal herbs from northern merchants. Each catty of angelica costs 35 coins, plus 2 coins for transportation and 1 coin for storage losses, bringing the total cost to 38 coins. The current selling price is 25 coins, resulting in a loss of 13 coins per catty. If they sell 1,000 catties daily, they will lose 13,000 coins daily, totaling 130,000 coins in ten days, nearly 130 taels of silver.
Manager Lin's eyes lit up: Master, do you mean they can't hold out for long?
Furthermore, Tang Yiran continued his calculations, "Although the cost of our angelica from Xiehetang is higher, I have a special supply channel that allows me to obtain high-quality medicinal materials. These materials are three times more potent than ordinary ones. In other words, if a patient takes one ounce of our angelica, it's equivalent to taking three ounces of theirs. Based on efficacy, our actual cost of angelica is fifteen coins per pound, and the selling price is fifty coins, resulting in a profit of thirty-five coins, far exceeding that of the Phoenix Chamber of Commerce."
Manager Lin suddenly realized: "So that's how it is! The Phoenix Chamber of Commerce appears to offer low prices, but in reality, it's operating at a loss. Your high-quality medicinal herbs, with their high efficacy and low cost, are the real advantage!"
Tang Yiran nodded: That's right. Moreover, the Phoenix Chamber of Commerce's low-price strategy has a fatal weakness—they can only cover the pharmaceutical market and large pharmacies, but cannot cover the hundreds of small clinics and rural medical centers scattered throughout Jiangnan. These clinics and medical centers don't have large demand for medicine, but their total number is huge, which is our opportunity.
She stood up, a sharp glint in her eyes: "Uncle Lin, immediately send someone to contact the small clinics and village clinics in the Jiangnan region. Tell them that Xiehetang can provide high-quality medicinal herbs at prices only 20% higher than Phoenix Chamber of Commerce, but we offer door-to-door delivery and free medical guidance and training on the use of the herbs."
Shopkeeper Lin exclaimed excitedly, "Boss, this strategy is brilliant! The Phoenix Chamber of Commerce's low prices can't cover these small clinics; they have to buy their own medicines from the market, which is more expensive. Our direct delivery, while slightly more expensive, actually lowers the overall cost!"
Tang Yiran pondered for a moment, then said, "Uncle Lin, there's another issue we need to be aware of. The Phoenix Chamber of Commerce will see our success in the small clinic market and will inevitably take targeted measures. We need to plan ahead."
Manager Lin asked: Master, what do you mean?
Tang Yiran said: "First, we'll sign long-term cooperation agreements with these clinics and medical centers to lock in prices and supply volumes. At the same time, we can offer some discounts—for example, a 10% discount for signing a one-year cooperation agreement, plus a certain amount of free medicinal herbs."
Manager Lin's eyes lit up: This is a great strategy! With a long-term agreement, even if the Phoenix Chamber of Commerce later lowers prices, these clinics will not easily breach the agreement.
Tang Yiran nodded: Yes. The key to business warfare is to seize the market before your competitors and strike first.
The following day, the price war waged by the Phoenix Chamber of Commerce was in full swing.
The medicinal herb market was packed with people, with ordinary citizens and small medicine dealers scrambling to buy the low-priced medicinal herbs from the Phoenix Chamber of Commerce.
"Cheap! So cheap!" a pharmacy owner exclaimed excitedly. "I bought 500 jin, enough to sell for a month!"
"I'll also buy 300 jin!" Another shopkeeper said, "The Phoenix Chamber of Commerce has really gone all out this time. We small medicine merchants are getting a great deal!"
Zhou Shiren of the Phoenix Chamber of Commerce stood on the second floor, looking at the crowd below, a cold smile appearing on his lips: Tang Yiran, who will buy your high-priced medicinal herbs?
He looked at the shopkeeper next to him: How much did you sell today?
The shopkeeper exclaimed excitedly, "Chairman Zhou, we've already sold 12,000 jin today! At this rate, we can sell 120,000 jin in ten days!"
Zhou Shiren nodded: Very good. Continue to increase the supply, let everyone know that the Phoenix Chamber of Commerce's medicinal herbs are cheap. Tang Yiran's high-priced medicinal herbs are simply unwanted!
Just then, groups of employees from Xiehetang rode on horseback, carrying samples of medicinal herbs and price lists, heading to small clinics and rural medical centers throughout the Jiangnan region.
The staff of Xiehetang arrived at a remote rural clinic.
Dr. Zhang, the waiter brought out a sample of medicinal herbs. This is Angelica sinensis from Xiehetang. Please take a look at the quality.
Dr. Zhang took the angelica root and examined it carefully. This angelica root was golden in color, with an oily surface and a strong medicinal aroma, completely different from the angelica root he had seen in the medicinal market.
"This quality..." Dr. Zhang's eyes lit up. "Excellent!"
He tried to break open a stalk of angelica; the cross-section was golden and oily, and the aroma of the herb was enticing. This was in stark contrast to the cheap medicinal herbs from the Phoenix Chamber of Commerce—the angelica he had previously bought from the medicinal market from the Phoenix Chamber of Commerce was severely lignified, and the cross-section was dry and dull.
The shopkeeper said, "Dr. Zhang, our angelica is priced at fifty coins per catty, twice as expensive as the twenty-five coins from the Phoenix Merchants Association. But—"
He paused for a moment: "Our angelica root is three times more potent than that of the Phoenix Chamber of Commerce's. In other words, one bowl of our angelica root soup is equivalent to three bowls of the Phoenix Chamber of Commerce's. Based on the efficacy, our actual price is actually lower."
Dr. Zhang was intrigued: Really?
The shop assistant added: "Furthermore, we deliver to your door, so you don't need to go to the pharmacy yourself, saving you time and energy. We also provide free medical guidance and training on the use of medicinal herbs. You can consult with the doctors at Xiehetang at any time if you encounter any problems."
Dr. Zhang did the calculations: if the medicine is indeed three times more effective, then it's definitely worth it. I only prescribe two or three doses a day, and using your herbs, it will only cost me about thirty coins a month. Plus, the home delivery is really convenient.
He said, "Okay, I'll order five catties first and try it out. If the medicine really works, I'll get my medicine from Xiehetang regularly from now on."
The clerk said, "Dr. Zhang, we can sign an agreement. If you are willing to cooperate with Xiehetang long-term, we can give you a 10% discount, and also give you a pound of medicinal herbs every month."
Dr. Zhang's eyes lit up: a 10% discount? Plus a free pound?
The clerk nodded: "Yes. This is our preferential policy for long-term customers at Xiehetang. As long as you are willing to sign a one-year cooperation agreement with us, you can enjoy these benefits."
Dr. Zhang excitedly said, "Okay! I'll sign!"
On that day, the staff of Xiehetang signed long-term cooperation agreements with 37 small clinics and 124 rural clinics.
Although the demand from each of these clinics and medical centers may be small, the total number they represent is staggering.
Meanwhile, in the backyard of Xiehe Hall, Tang Yiran was preparing to harvest medicinal herbs from the Mirror Flower Water Moon space.
She closed her eyes, her consciousness sinking into the space.
Within the Mirror Flower Water Moon space, the spiritual energy was abundant, shimmering with golden light. Golden Heart Grass, Green Edge Grass, Blue Heart Grass, Crimson Flame Grass, Yellow Heart Grass—various spiritual herbs were thriving. The waters of the spiritual spring rippled, emanating a faint spiritual aura.
Tang Yiran arrived at the angelica planting area, where the angelica was growing exceptionally well.
She picked a stalk of angelica; its cross-section was golden and oily, and its aroma was rich.
The medicinal herbs in this space are indeed of far superior quality to those outside. Tang Yiran thought to himself.
She began to pick quickly, putting each angelica plant into her storage bag.
The flow of time here is ten times faster than outside, and the growth cycle of medicinal herbs here is only one-third that of outside. Moreover, the irrigation from the spiritual spring greatly enhances the medicinal efficacy of the herbs.
"I can harvest 100 jin of medicinal herbs each time, enough to supply Xiehetang's needs for three days," Tang Yiran thought to himself.
She decided that she would come to the space every day to pick medicinal herbs to ensure a sufficient supply.
After picking angelica, she went to the astragalus planting area, licorice planting area, bupleurum planting area... and picked all kinds of commonly used medicinal materials.
After harvesting all the medicinal herbs, Tang Yiran returned to Xiehe Hall.
Three days later, the price war within the Phoenix Chamber of Commerce continued.
"Chairman Zhou," the shopkeeper said excitedly, "our sales are excellent! We're selling tens of thousands of kilograms every day! At this rate, we can sell 100,000 kilograms of medicinal herbs in ten days!"
Zhou Shiren nodded in satisfaction: Very good. Continue to increase the supply, so that Tang Yiran's expensive medicinal herbs will go unsold!
Just then, a subordinate ran in: Chairman Zhou, something's happened!
Zhou Shiren asked: What is it?
My subordinate said: "Our investigation revealed that Xiehetang has been shipping large quantities of medicinal herbs daily to small clinics and rural medical centers throughout Jiangnan. These clinics and medical centers have all signed long-term cooperation agreements with Xiehetang!"
Zhou Shiren's expression changed: What?
The subordinate said: According to our statistics, Xiehetang has signed cooperation agreements with more than 160 clinics and medical centers, covering 70% of the small clinics and rural medical centers in Jiangnan!
Zhou Shiren roared: "Damn it! Tang Yiran, you actually bypassed the medicine market and went straight to rob a small clinic!"
He immediately sent people to investigate and found that Xiehetang's strategy was indeed very effective—although the individual demand from these small clinics and medical centers was not large, the total demand was astonishing. Moreover, they had all signed long-term cooperation agreements with Xiehetang, so even if the Phoenix Chamber of Commerce later followed suit and lowered prices, these clinics would not easily breach the agreement.
Chairman Zhou, the investigators said that Xiehetang now sends dozens of truckloads of medicinal herbs to various places every day, and its daily sales have already exceeded those of our Phoenix Chamber of Commerce!
Zhou Shiren's face turned ashen.
Phoenix Chamber of Commerce's low-price strategy was originally intended to squeeze out Xiehetang, but it ended up helping Xiehetang expand its market influence.
Inside the Xiehetang pharmacy, Manager Lin excitedly rushed in: Boss, our strategy has succeeded!
Tang Yiran asked: What do you mean?
Manager Lin said: "While Phoenix Chamber of Commerce's low-price strategy has attracted many large pharmacies, these pharmacies are price-sensitive and purchase in large quantities each time, making it impossible for Phoenix Chamber of Commerce to maintain low prices in the long run. Our strategy, on the other hand, is to capture the market of small clinics and rural medical centers, whose customers value quality and service, not price."
He paused for a moment: "Now, our more than 160 partner clinics and medical centers are receiving more orders every day than the Phoenix Chamber of Commerce is selling daily!"
Tang Yiran nodded: This is just the first step. The Phoenix Chamber of Commerce will definitely find a way to deal with it. We need to plan ahead.
Manager Lin asked: Boss, how do you think the Phoenix Chamber of Commerce will respond?
Tang Yiran said: "They will try to improve quality, reduce costs, or take other measures to attack us. We need to be prepared."
She paused for a moment: "Uncle Lin, send someone to investigate the Phoenix Chamber of Commerce's suppliers and financial situation. We need to understand their weaknesses."
Manager Lin nodded: Understood, sir.
Another week passed, and Phoenix Chamber of Commerce's low-price strategy began to run into problems.
Chairman Zhou, the shopkeeper rushed in, saying, "Our funds are starting to run into trouble."
Zhou Shiren asked: What's wrong?
The shopkeeper said: "Our low-price strategy has brought good sales, but we lose thirteen coins for every pound of herbs sold. In ten days, we have already lost nearly one million coins, and our cash flow is about to collapse."
Zhou Shiren's expression changed: One million coins?
The shopkeeper said: That's right. Moreover, we originally hoped to squeeze out Xiehetang through a low-price strategy, but now it seems that Xiehetang has not been affected at all. On the contrary, they have captured the market of small clinics and rural clinics, and their sales are higher than ours.
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