Starting out as a drug dealer in 1988

In November 91, due to average production capacity, the cost of water heaters produced by Hengyuan Electronics could be controlled at around 11 yuan per unit.

With the resumption of production and expansion of production capacity, and because of the expansion of production capacity, the raw material manufacturers have given certain discounts, and now the cost of water heaters can be achieved at 110 yuan per unit.

Even calculated based on the current price, Hengyuan Electronics still has a gross profit of 70 yuan per unit.

However, if we take into account other expenses such as workers' wages and company operations, the net profit is about 25%. And if we calculate based on the outstanding price of 200 yuan per unit, the net profit is 45%.

It’s not very high, but it’s not low either.

As soon as Zhou Haiyang opened his mouth, he asked for a 20% price reduction. If Hengyuan Electronics really did as he asked, its net profit would only be 25%.

There was no way Zhao Wenhao would agree to this no matter what.

Zhou Haiyang curled his lips, but he was not angry about what Zhao Wenhao said.

When doing business, of course, you start with a high price. As for the final outcome, it depends on the degree of compromise between the two parties.

"So what kind of conditions are you willing to offer, Mr. Zhao? Mr. Zhao, please note that in Zhejiang Province, what Hongtu can do may not be possible for other companies."

Zhao Wenhao's fingers tapped lightly on the coffee table, his facial expression looking thoughtful.

When Zhou Haiyang was getting impatient waiting, Zhao Wenhao finally spoke: "We promise an annual sales volume of 12 units, with a price of 185 yuan per unit and a payment period of one month.

As for rebates, a reward of 5 yuan per unit will be given for completing the task; a reward of 2 yuan per unit will be given if the total sales volume increases by 10 units, and a reward of 5 yuan per unit will be given if the total sales volume increases by 20 units.

This is my bottom line, and it will also be the bottom line for future provincial general agents."

If the operation is carried out in accordance with Zhao Wenhao's method, as long as Hongtu Trading can achieve sales of 12 units, its profit can reach 20 yuan per unit, and the total gross profit can reach 240 million.

Once the sales volume reaches 14 units, the total gross profit will reach 350 million.

You know, Hongtu Trading is not a manufacturer like Hengyuan Electronics.

Hengyuan Electronics has thousands of workers to support, and the labor costs required are not a small amount.

Moreover, the maintenance and upkeep of those machines and equipment require expenses.

Hongtu Trading Company is just a simple sales company, and a company of this nature has only about a hundred people at most.

Zhao Wenhao will do the math on this, and Zhou Haiyang will certainly do the math on this as well.

From the beginning, Zhou Haiyang hadn't expected Zhao Wenhao to do what he asked. Now, the fact that Zhao Wenhao could offer such favorable terms was already quite good.

They do channel wholesale, not direct service to individual customers, and they focus on taking small steps and making quick progress.

However, since Zhao Wenhao put forward specific requirements, Zhou Haiyang had to pretend to bargain again.

So, there was another round of verbal battle between the two sides, and finally an agreement was signed on the spot.

And thus, Hengyuan Electronics’ first provincial general agent was established.

"Mr. Zhou, it's a pleasure to work with you!" Zhao Wenhao smiled and extended his right hand.

The same was true for Zhou Haiyang, as if the previous tense negotiation had never happened at all.

That evening, Zhao Wenhao hosted a banquet for Zhou Haiyang and his party.

The result, of course, was to make them feel at home – six people sat at the table, and all were eventually carried back to the hotel.

The next day, Zhou Haiyang and others did not wake up until noon. They rushed back to Zhejiang Province without even saying goodbye.

They were really scared. If they had another meal like this at noon, they might drink themselves to death in Ping'an County.

"Director Wang, what is our current maximum production capacity?"

Zhao Wenhao narrowed his eyes and rubbed his temples with his hands.

The so-called killing one thousand enemies will result in eight hundred casualties of your own.

Zhao Wenhao drank at least a pound of white wine yesterday, otherwise he would have been carried back even if his men had helped to block him.

But even so, my mental state today is not very optimistic.

"Mr. Zhao, we are currently running at full capacity, and the workers are working overtime in three shifts. The most we can achieve is 1.5 units per month." Wang Changzheng replied.

Zhao Wenhao muttered to himself: "1.5 production capacity is not enough!"

Just yesterday, Zhou Haiyang agreed to pick up 5000 units next week for distribution to various channel dealers.

But the problem is that there are only less than 8000 units left in stock.

If Hongtu Trading takes away 5000 units next week, then other customers who want the goods can only split the remaining 3000 units equally.

It's just a drop in the bucket, not enough to share.

Wang Changzheng was speechless. Only then did he realize how short-sighted he was.

At the time, there were 1.5 units in stock, but Zhao Wenhao wanted to continue production. At that time, he objected.

If it weren't for insufficient funds, the current inventory might have reached 3 units.

But even if there are 3 units in stock, according to the current trend, it will only be one month's sales.

There is no way. The people who call me for consultation every day still show no sign of stopping.

Apart from other things, the sales department is unable to keep up with the number of customers who try out their products every day. You can imagine how popular their water heaters are.

And this happened just over ten days after the advertisement was broadcast on CCTV.

"Director Wang, come with me to the county tomorrow. We'll talk to County Magistrate Li, who's in charge of the economy. We need to expand our production capacity, but the land we have is no longer sufficient.

If we want to build a new factory, we have to take over the light bulb factory next door. Since that factory is half-dead anyway, the county would be better off asking them to move out and let us move in.

Furthermore, if we want to build a new factory, we still don't have enough workers. You should start recruiting new workers tomorrow, with a tentative target of 500. They will first do internships in the old factory.

When the time is right, we will move to the new factory."

Wang Changzheng quickly wrote them down one by one with a pen, and then repeated them again.

"Mr. Zhao is wise. If the county agrees, we can save a lot of effort. The light bulb factory next door has a large workshop, and we can use it after a slight modification." Wang Changzheng flattered him.

"As for the mechanical equipment, please call Chen Weiye over later. I need to talk to him. If we continue to expand production capacity, the existing equipment will definitely not be enough. We will have to purchase more. Go ahead and do it quickly."

Zhao Wenhao waved his hand, not wanting to listen to Wang Changzheng's flattery.

He still has a splitting headache. If it weren't for the various matters that need him to deal with, he really wants to go back and have a good sleep.

Wang Changzheng left, and in his place came Chen Weiye.

Zhao Wenhao gave another explanation, and only after Chen Weiye knew his mission and left did Zhao Wenhao finally calm down for a while.

Fortunately, sales have skyrocketed during this period, and initially, most customers purchased water heaters in cash, which provided sufficient funds to support the company's production expansion.