"Mr. Feng, after thinking about it for a long time, you came up with this idea for me?" Fatty Huang was a little unmotivated. If he were to do contract work, wouldn't he be working for others, and he would be at the bottom of the pile
"Old Huang, what do you think a supermarket is? It's nothing more than a small store that is enlarged several times. Then why don't small stores make much money, but supermarkets can make several times the money of small stores?"
"The supermarket has a big store and a lot of products."
"What you say makes sense, but the core factor is that supermarkets define the cost standards of goods. Supermarkets must ensure a certain proportion of profits, which limits the cost of your goods. If your costs are too high, it will be difficult to survive. . In small shops across the street, there may be differences in product prices, but in Taihua Supermarket, the price of a product is exactly the same in all stores. This is the cost standard. "
Fatty Huang nodded thoughtfully: "But what does this have in common with OEM?"
"The core of OEM is workers and production technology. What they have in common with supermarkets is that they also set cost standards and production cost standards. Others can produce 100 items in eight hours, but you can produce 120 items, then you can You can make money and have everyone follow your standards. This is a bit similar to a quota in a business."
"But if we only produce twenty more pieces, how much money can we make? In this way, we will completely lose the opportunity to build our own brand." Fatty Huang hesitated, but he knew that after a product is branded, the brand How much profit is the added value.
"Old Huang, think about it, is the Lianxiang Group in our country strong?"
"It's so strong. It has the largest computer production and sales volume in Asia. It is said that it has been rated as the number one in the world's computer industry." Huang Fatty also knew that Lianxiang Group had Feng Yu's shares, not to mention that Lianxiang Group was really powerful, so of course he did not hesitate to praise it. word.
"The production capacity of Lianxiang Group's own factories is not high, and most of them rely on OEMs. Even our factories of Aihua Electric and Fengyu Electric have made many OEM products for them, especially OEM production lines. I want to make brand-name LCD monitors. Do you think I would do it if I didn’t make money? If I produce more DVDs and squeeze out small factories like yours, can’t I make more money? The profit from one of our DVDs, but It’s far more than the patent licensing fee.”
"Because even the OEM fee we are offered is not low. And our machinery and equipment never stop running except for maintenance time. This allows our factory to create higher profits, and also allows our piecework workers to Earn more money. There are many factories in Yangcheng and Pengcheng, which naturally have a great advantage in hiring workers. If you can integrate these to form a scale and improve efficiency, then the money you can earn, There will definitely be no less." Feng Yu pointed out.
In the previous life, Fushikang was such a company. It formulated many industry standards for the manufacturing industry, strictly controlled the work efficiency of workers, and became an industry leader. Its annual profits were not a small amount.
But later on, Fushikang was too harsh in management, which caused some problems. Coupled with the general rise in labor costs in China, Fushikang gradually moved its factories to countries with lower labor costs such as India.
Fushikang is a Fortune 500 company that has truly maximized its labor cost advantage, unparalleled.
"Mr. Feng, I probably understand what you're talking about. It's about building scale, improving efficiency, and reducing costs, so as to gain profits, right?"
Feng Yu nodded: "That's pretty much what it means, but there's a little more to it, which is to set standards. Let all future OEM companies follow your standards. If they are lower than your standards, the profits will be significantly different. , there are not even orders to take.”
"But I can do it by merging those small factories. Those factories are not big, and the recent profits are not particularly good. If I propose a merger and take over all the workers, most of them will be happy to sell to me. But the merger After that, even though our efficiency has improved and our costs have dropped, we still have no orders?”
No matter how hard you work and no matter how good your craftsmanship is, what's the use if you have no work to do!
"Since I told you, I can guarantee that you will have work. If you really merge those factories, form a scale, and improve efficiency, I can make the decision and transfer some HDDVDs, mobile phones, MP3s, U disks and even The assembly of computer accessories or complete machines is left to you. Once you receive these orders from us, it won’t be too difficult to place orders for other products.”
Fatty Huang's eyes lit up. Mr. Feng's intention was too obvious. He wanted to give him an order. With Mr. Feng's generosity, I'm afraid the order will not be small. If he continues to torment his small factory, it will definitely not work.
"Mr. Feng, do you think this is possible? You give me the order and I will find a way to complete it with quality and quantity." Fatty Huang rolled his eyes and thought of another way.
That is, he acts as a primary contractor and then subcontracts orders to other factories to make money.
Feng Yu rolled his eyes at Fatty Huang: "What do you think?"
Fatty Huang smiled coquettishly: "Mr. Feng, to be honest, if you hadn't reduced the patent licensing fee before, it wouldn't be too difficult for me to acquire those factories. But now, I'm afraid I have to spend more money. Of course, these I can still take out the money, but I don’t feel confident.”
"You want to sign the contract first?"
Fatty Huang nodded wildly like a chicken pecking at rice: "Is that okay?"
"Of course not!" Think of that as a good thing! When the contract is given to you, but you fail to complete the order, it is a trivial matter to hold you responsible. The important thing is that it affects the sales of the product.
"Mr. Feng, how should the standard you mentioned be formulated?"
"You know Fushikang, the largest OEM for Lianxiang Computer and Fengyu Mobile Phones. They are now formulating 3C OEM standards. If you can join forces with them, you will succeed."
"Fu Shikang? It turns out it's them. The management there is too harsh. Many of our workers have switched jobs from Fu Shikang." Fatty Huang was a little disdainful of Fu Shikang.
Management must also be humane. Workers create value for you. If you still treat workers badly, there will definitely be trouble in the factory. As the level of education in the country generally improves, it is becoming increasingly difficult to recruit people who know nothing and can accept extremely low wages.
Originally, there were many such people in the west, but now, Feng Yu's glorious career is developing faster and faster in the west. Many people who originally decided to work out can find jobs in their hometowns.
You have less work, more money, and are closer to home. Why would you go to work so far away
"Since you feel that FC is too harsh, then you should figure out how to reach and exceed FC's efficiency and set your own standards. Although you may earn less than FC at first, your corporate culture will It will make your business last longer.”
(End of chapter)