Chapter 419: Chapter 251: Cutting Off the Source_2
"This is indeed a problem, but let’s not think about it here. Leave a few people to finish up here, and the rest of us will head back to the hotel and have a meeting to discuss!"
"Alright!"
...
Forty minutes later, the managers from the company and Zhang Yang and Old Zhao all returned to their hotel accommodation.
For the upper management of the company, the cost of making fishing rods is not a secret. Everyone eagerly expressed their opinions, and they quickly reached a consensus.
After unanimous discussion, Zhang Yang and Old Zhao decided to give a 30% discount on the originally set price!
At the same time, the first batch of cooperative agents who place orders will also enjoy a discount of 2,000 units off for every 10,000 units ordered!
According to the normal pricing principle for fishing rod products, the factory’s profit margin for the rods can reach about 50% at the ex-factory price, and when the rods reach the hands of the agents and are resold, the profit margin can reach 80%-100% or even higher.
How should this coefficient be understood? Let’s take an example: for a rod with a production cost of 100 yuan, the ex-factory price is set at around 150 yuan.
When it reaches the hands of physical distributors, it is sold for around 270 yuan to 300 yuan. Some extremely high-profit products may have even higher profit margins.
Seeing these numbers, some might complain that this pricing is ridiculously high? Fishing equipment really is a high-profit industry!
Actually, those who think this way are ordinary people without business experience. Anyone with a little business sense would know that this profit rate is not considered high.
Factories need to pay taxes, pay wages to employees, and keep stock to support after-sales services after the rods leave the factory. Various aspects require cost support. A 50% profit margin is already very thin, and the actual final net profit might not even reach 30%.
As for physical agents, they need to have stock, and not to mention the long capital turnover cycle, they must frequently keep some non-selling models in stock as well.
The operation of the store also requires various cost supports, and the remaining stock at the end would occupy a large portion of the profit,
Plus, fishing equipment is a niche industry, so it must have sufficient profit margins to sustain healthy survival.
The price adjustment strategy discussed by Zhang Yang and his team essentially gave up most of the profit margin, implementing the cost-performance ratio to the company’s limit.
Since the other party is trying to use underhanded tactics to seize the market, they definitely seek profit. By lowering the order price to the minimum, Zhang Yang and his team essentially cut off their source of income, giving them a hard blow.
In addition, the reason Zhang Yang and his team are bold enough not to make a profit and still compete is directly related to the company’s product line.
The company didn’t start with fishing rods; it built its business on small baits and feed, which have guaranteed profits, so even if the new fishing rod category doesn’t make money temporarily, they can handle it!
On the other hand, the fishing equipment company ’Happy Fishing World’ is different. As a single fishing rod manufacturer, they sell nothing but rods at the trade show, lacking Zhang Yang’s confidence to lower prices this extensively.
After more than an hour of discussion, the marketing department stayed up all night to readjust all the new fishing rods’ order prices, recalculating and completing the adjustments by midnight.
Early the next morning, everyone woke up early to have breakfast as usual. According to the trade show organizers, ordinary visitors could only enter at eight-thirty, but as exhibitors, they had one hour of preparation time and could enter one hour early with passes to prepare for the booth details.
Old Zhao and Zhang Yang led a large group to the parking lot outside the exhibition hall and then walked through the internal passage to the showroom in advance to begin formal exhibition preparations.
The product samples were unpacked and displayed on the booth one by one. The one-hour preparation time was more than enough, and after finishing, everyone stayed in the hall to rest. Although the potential customers hadn’t entered yet, it was foreseeable that today would be a tough battle.
After finishing the booth setup, Zhang Yang glanced at the time, turned his head, and called out to Xiaoli from the sales department.
"What’s up, President Zhang? Need something from me?" Xiaoli came over, full of curiosity.
Zhang Yang said, "When it starts, head over to the ’Happy Fishing World’ booth next door and try to get a pricing list! Find out their cooperation standards!"
"Oh, alright! I’ll head over later! Should I just ask, or pretend to be a physical store owner?"
"Just get any staff member to give you a pricing list; they should be eager to hit targets and it should be pretty easy!"
"Okay, I’ll go handle it in a bit!"
After arranging the information gathering task, Zhang Yang casually pulled up a folding chair, sat in a corner, connected his phone with a power bank, and then set up his live-streaming stand.
"It’ll definitely be busy later, are you planning to livestream in this noisy situation?" Zhao Bingguang came over and mumbled.
Zhang Yang grinned, "Aside from livestreaming the trade show, I also want to expose the guys next door! I’m not the indulgent type! Suffering in silence is not my style! They want fame, right? Well, I’ll make sure they get some attention!"
"Alright, let’s do it! If they dare come over to stir trouble, we’ll just give them a beating!" Old Zhao agreed.
The time unknowingly reached eight-thirty, and with the opening at each entrance, the crowd queued up to pass the entrance security checks and rushed towards the various exhibition halls.
For those who have never participated in a trade show, they may not know just how fierce the crowd can be at this time point in 2016.
To put it this way, the daily flow conservatively starts at hundreds of thousands. The exhibition halls may not be packed wall-to-wall, but they are definitely swarming with people.
The business representatives charged into the convention center eagerly and then headed towards the various major fishing brands they had contacted in advance. The exhibition area that was quiet a moment ago suddenly became bustling.
The first wave of customers also arrived at Zhang Yang’s booth, and the sales team quickly got busy.
Meanwhile, Zhang Yang started his livestream!
Live at Tianjin Meijiang Convention and Exhibition Center N2-139, welcome brothers coming to the exhibition to meet in person!
The livestream homepage banner featured a rare long name, and then today’s livestream started directly.
[Hello Yang Bro, first row sofa!]
[Finally went live, first row bench!]
[Here at the exhibit with the team? Got any new products for us brothers to check out!]
[N2-139?? I’ll come by later and check it out, I’m with a friend who owns a fishing gear shop, I’ll help Brother Yang snag a customer later!]
Seeing the familiar IDs quickly popping up in the public chat, Zhang Yang grinned.
"Hello, welcome to the livestream, my bros! I’m your buddy Zhang Yang! Our team came here in advance two days ago, spent half a day setting up the booth yesterday, and today we officially start receiving customers!
The morning of the first day of the conference is usually busy according to tradition, so we won’t run around. Let’s first go over our company’s new spring products and the general agency policy.
If any fans visiting the trade show, make sure to stop by, even if we can’t cooperate, feel free to drop by for some tea and chat!
Now, let me introduce our company’s new Black Pit additives!
Apart from the previously popular ’Four Gentlemen’ small drugs, we have introduced many new flavors this year!
For example, the traditional Chinese herbal wine, specially for fishing the recuperated fish! And ’Suzhou Jin Dacarp’, tailored for Jiangsu crucian carp! Also, the all-new upgraded Black Pit Glory series..."
In the live-streaming mode, Zhang Yang diligently introduced and displayed various new products of the company to the viewers, explaining various small drugs’ types and effects, impressively articulating them with high eloquence and product awareness, even more fluently than the signing managers.
After months of preparation in winter, including small drugs, bait, rods, bobbers, etc., Zhang Yang introduced each product live, one by one.
Initially, he thought fans might not be interested in watching product introductions, but after personally showcasing the products, the results were surprisingly good.
In less than 20 minutes from starting the livestream, the audience reached over two thousand, rivalling the peak concurrent data of their usual Black Pit Frenzy period!
Meanwhile, Xiaoli, tasked with getting the competitor’s price list, successfully reached the other party’s booth and quickly obtained the pricing list and agency requirements through some inquiries, returning just in time.