"Then how much are you going to charge?" Zhao Yi asked.
"We plan to charge 1 cent per hour for the machine with the lowest computing power, and then charge an additional 10 cents if it is not upgraded to a higher level. The highest level can provide third-level computing power support." Jia Siqi replied.
To be honest, this charging standard is really not expensive. If it were not for the use of technology that concentrates computing power, it would be impossible to reduce the price to such a low level.
You know, under normal circumstances, the machines in Internet cafes need to be replaced every three years. In other words, the time to recover the cost is very short, and it still needs to be profitable. Even if it is calculated according to the two-year cost recovery period and the one-year profit period, generally Internet cafes really can’t do that.
Calculated based on the calculation of 0.1 yuan for a machine, the average working time is 20 hours a day, and the number of working days per year is 360 days, then the annual operating income of each machine is 720 yuan.
The average investment cost of each machine in a trading company's Internet cafe is about 1,500 yuan, which means that the time to recover the cost is about two years.
Of course, this is calculated based on the minimum standard. The real situation may be much better than this. In this era, those who can access the Internet and have good family conditions, if the average standard reaches 0.2 yuan, then the hardware can be recovered in one year. invest.
Then comes the time of pure profit. Due to the adoption of new technologies, the machines will not be eliminated in three years like ordinary Internet cafes. This is the reason why the trading company has the confidence to set the price so low.
Because the above only calculates the investment in machine hardware, it does not include housing costs, labor costs, and management costs. If these are included and calculated based on a three-year cycle, it may lead to losses.
The trading company has lowered the price to such a low level, which fully shows that they understand Zhao Yi's spirit and do not plan to make a lot of money on the Internet cafe project. This is mainly to cooperate with Zhao Yi's Internet promotion plan.
Moreover, the Internet cafe of a trading company will most likely only need one investment, because this round of hardware investment is expected to last for 5 to 10 years.
By that time, our country's per capita income should reach a certain level, and electronic products generally slowly decrease over time. By then, ordinary families will be able to afford computers, and the meaning of the existence of Internet cafes will no longer be Not big anymore.
If there is not much market for Internet cafes by then, Shangtong Trading Company will withdraw from the Internet cafe business. After all, this is not their company's mainstream business, but it is just to cooperate with the Internet promotion plan.
"An Internet cafe with more than 200 machines is already quite large. It is very densely populated, so special attention needs to be paid to safety. When training employees, we must focus on this area." Zhao Yi said.
“Well, we also pay great attention to this aspect, so we invest a lot of work and money in fire protection facilities.
At the same time, in order to improve the comfort of the Internet cafe environment, a larger business site was deliberately selected to reduce the machine density. "Jia Siqi said.
"Oh~~, this is also a way. Now the house prices are not high, and a larger business site will not cost much money, and there is the possibility of appreciation in the future. It is a sure-profit deal." Zhao Yi said.
"On the one hand, we are optimistic about commercial real estate in the future, and at the same time, it is also in line with our consistent business habits, which is to provide the best service possible. The improvement of the comfort level of the Internet cafe environment is a reflection of this concept."
Hearing Jia Siqi's words, Zhao Yi felt even more relieved, and had no doubts about her words. Not to mention the retail companies in which they had shares all over the world, but also the retail companies they ran themselves, the service quality was obvious to all.
When Shangtong Trading Company's shopping mall opened in Kyoto, Zhao Yi went to visit it and found that in addition to introducing advanced management methods from abroad, they also added many services that were in line with national conditions.
Although it has not reached the "abnormal" level of Japanese-style service, it is still very advanced domestically and internationally, and because many advanced management systems have been put in place, the overall cost has been reduced to a minimum, and the price of goods has been reduced a lot.
It is this kind of leadership in comprehensive service quality that allows retail companies under the trading company to take root in a region and gain unanimous praise from the local area.
The self-owned retail enterprise of the trading company has grown into the largest retail group in Asia, covering all aspects of people's lives, and its business comprehensiveness is also the highest in the world.
After seeing the relevant reports from Shangtong Trading Company, Zhao Yidu began to have some self-doubt about his original plan to penetrate the global retail industry.
It seems that according to the development speed of the retail companies under Shangtong Trading Company, it is entirely possible to kill those companies that are still the world's retail giants in the future. If they can be killed, why bother to invest in their companies.
Companies that invest in shares are not as comfortable as companies that own 100% of the shares. Both in terms of operational autonomy and corporate capital dividends, they are much freer.
So Zhao Yi is now asking the trading company to determine which retail company its business development poses an important threat to based on the actual situation. It is likely to cause the other party to go bankrupt, and then slowly start to withdraw from their shareholder list.
But there is no rush yet. Currently, the main business of retail companies independently operated by trading companies is in East and Southeast Asia and the Middle East. The developed regions of Europe and the United States have not yet entered.
This is not because retail companies of trading companies cannot compete with them, but because their development time is too short. First, their brand awareness is not as high as that of established retail companies. Second, the increase in management costs caused by rapid expansion requires some time to digest.
The main reason is that the Internet has just begun to be promoted in China and has not spread all over the world, so it cannot bring out the full effectiveness of the retail companies under the trading company.
Now the number of retail enterprise subsidiaries under the trading company has reached 20, occupying 10 of the 18 retail categories. Basically, there are two retail companies in each retail category.
The purpose of this is, first, to increase the competitive atmosphere of its affiliated companies and to keep them from forgetting the cruelty of the market. Therefore, competition among subsidiaries of the same nature is very fierce, which is deliberately created by trading companies.
The second reason is that they are afraid that one company's degree of monopoly is too high and will be concerned by public opinion from the outside world. In this way, two companies competing with each other will be much better perceived by the outside world.
Of course, the second consideration is mainly because the trading company is very confident in the operation of its own enterprises. If it is an ordinary enterprise, how could it think that it would monopolize a retail category from the beginning? If it were said, it would definitely be considered a fool.
With so many retail companies under its subsidiaries, there are a large number of business sites and they are distributed all over the world. There will definitely be a need for communication. Before the development of the Internet, this was basically achieved through communication satellites.
However, the information processing capabilities of communication satellites are limited after all, which is the main reason restricting the large-scale expansion of retail companies under trading companies.
The reason why these companies are able to form such strong competitiveness is because they have reduced management costs to the extreme. When competing with local companies, just engaging in price wars will drag them to death.
Therefore, these retail companies attach great importance to whether they can reduce management costs in new places, because this is a prerequisite for them to engage in price wars.
Because under normal circumstances, the cost of purchasing goods between them and competing companies is similar, especially for companies of similar size, the cost is basically not much different. If they want to win in the price war, they can only start by reducing management costs.
The reason why they are so keen on price wars is because this method of competition is the most effective, simplest and most direct, and also the most unsolvable.
When they engage in price wars with competitors, they always calculate the opponent's cost line accurately, and then directly lower the price below the cost line, causing the opponent to continue to lose blood. The longer they operate, the more they lose, and sooner or later they will be eliminated. Get rid of it.
Moreover, reducing operating costs can also circumvent the relevant laws and regulations of various countries on vicious competition. If the retail companies under the trading company have been below the cost line for a long time and engage in price wars, they are likely to be intervened by the local government.
But if I engage in a price war above the cost line, and you engage in a price war below the cost line, the local government has no reason to intervene in the investigation, because this is completely in line with business logic, and there is no law that does not allow the sale of goods at reduced prices.
And in order to avoid the situation of first lowering prices to kill off competitors and then raising prices to monopolize operations, these retail companies all do so in the name of discounts. Anyway, they can find various reasons for discounts, and the discount time will basically not be interrupted.
Before trading companies began to develop their own retail companies, East and Southeast Asian countries had related retail companies, especially Japan and South Korea, which had quite a few companies in this area.
As a result, after several years of persistent pursuit by trading companies, many small and medium-sized retail companies have been killed. They either went bankrupt or accepted acquisitions. In short, they disappeared.
And those large retail companies, especially those in Japan and South Korea, are still struggling to support themselves due to the support of consortiums behind them, but it is estimated that such days will not last long.
No consortium can afford to suffer losses for several years or even longer. No businessman with a right mind would do this.
Maybe in order to save the retail business, he will lose all his other industries. Then he will lose his wife and lose his army. The greater possibility is that if this part of the business is monopolized by others, he will monopolize it. In the shopping mall If it doesn’t work, you have to admit defeat.
The costs in the retail industry are mainly divided into five major parts, namely labor, space, loss, logistics and goods acquisition costs.
Among them, labor costs vary from place to place, and if you want to achieve the same service quality as others or even higher than others, the cost in this aspect cannot be saved, and it may even be higher than that of others.
Although the concept of unmanned supermarkets was popular in the past, people still hope to receive thoughtful services when they go shopping. Otherwise, it is better to shop online or by phone. Although these are not available in this era, the principle is the same.
Then we can only think of solutions from several other aspects. Since trading companies have never been short of money, they generally hold real estate by themselves in terms of sites. They can buy it if they can, and they can't just build it themselves.
Of course, if you can't buy something in a prime location, you can only rent it. After all, it would be your own loss to give up such a good place.
However, there are not many such cases. No one can afford it. Unless there is no sincerity and the price is set too high, it is not cost-effective to buy it.
In this case, although the initial investment cost is relatively high, when it is amortized, the cost will be reduced a lot. The reason why other retail companies use leasing to obtain business premises is mainly because they do not have much funds.
This aspect has greatly reduced costs for the retail companies under the trading company. It can be said that the cost of operating space is the most important cost expense for retail companies.
Losses, which mainly include product expiration, product damage, theft, self-inflicted theft, customer theft, etc., can be realized through management and technical means.
For example, retail companies under trading companies basically have cameras covering all blind spots, and are equipped with magnetic induction doors at each exit. As long as the product has not been decoded, the police will be alerted as soon as it exits.
It is more troublesome to guard and steal. You can only implement a stricter management system and give employees reasonable wages. If the wages are very small, employees will inevitably look for ideas elsewhere.
The most important thing is the issue of product expiration. Loss in this area may be man-made or may be a problem with the product sales itself.
In order to reduce costs in this area, the trading company teamed up with Fanxing Software Company to specially customize a management system to conduct more accurate and detailed management of merchandise inventory, sales, orders, scheduling and other aspects.
Retail companies can obtain the purchase, sale, and inventory status of all goods in all their stores in real time, and then use the scheduling system to dispatch products from stores with poor sales to stores with good product sales for sale.
If the product is very poor in all its stores, it will be dispatched across enterprises to see the sales of this product in other retail enterprises under the trading company. If the sales are good, it will be dispatched to other companies.
If it really doesn't work, it will be sold at a large discount. Price reduction is a feasible way.
This will minimize the return of products to the manufacturer and reduce the manufacturer's losses. In this way, you can not only reduce your own losses, but also gain the favor of the cooperative manufacturers.
Because retail companies under trading companies have fewer returns, manufacturers are more willing to give retail companies under trading companies lower ex-factory prices. Both parties benefit from such cooperation.
This aspect can only be achieved by trading companies taking advantage of technology and scale. It is impossible for ordinary small retail companies to achieve this level, and their cost of purchasing goods is also much higher than that of large companies.
If the product is damaged, it depends on which party is responsible. If it is your own responsibility, you can only bear it yourself. There is nothing you can do about it. If it is the manufacturer's responsibility, then return it to the manufacturer.
In order to save logistics costs, trading companies have built a huge logistics network in East Asia and Southeast Asia. In addition to the need to rely on other people's logistics systems for trunk transportation, terminal logistics are controlled as much as possible themselves.
This not only reduces the price difference earned by middlemen, but also reduces the loss of goods in the circulation process.
In the future, as the production capacity of Haiyan Shipping Company becomes larger and larger, Qianfan Shipping Company will also be operational. In the future, shipping logistics will also be controlled by its own people, making coordination between them more convenient.
Moreover, due to the large scale of the retail companies under the trading company, they often work in groups for logistics transportation. For this purpose, a system has been specially developed to coordinate the commodity transportation information of all parties and try to reduce this cost to a minimum.
Therefore, retail companies under trading companies have natural advantages in this regard. Like other retail companies, not to mention small retail companies, even those large retail companies, the overall logistics cost is much higher than that of retail companies under trading companies.
As for the cost of purchasing goods, if it is a third-party manufacturer, the cost of purchasing goods for retail companies under trading companies is similar to that of international retail giants, but it is lower than that of small retail companies.
Therefore, in order to improve their advantages in this area, retail companies under trading companies choose to invest in shares or acquire third-party manufacturers that they are more optimistic about. In this case, the profits go into their own pockets.
At the same time, it will also produce some of its own unique products, which can not only form differentiated competition but also reduce production costs.
Having said so much, everyone can see that the competition between retail companies is actually a cost competition, because this traditional industry does not have so many bells and whistles. If you want to win the competition with other companies, just start a price war directly. .
Price war is a tried and tested tactic of retail companies under trading companies. Knowing the power of this tactic, they have already reached a very strict level of cost management.
They will try their best to reduce their costs without affecting the interests of all parties.
Retail companies under trading companies will not do things like those that default on payment to suppliers, and they will not make any decisions about employee wages.
The former is related to the stability of cooperation between retail companies and the cost of obtaining goods, reducing hidden costs in this area. Protecting the interests of employees is related to the success or failure of enterprise management. In the final analysis, management is about managing people.
Failure to properly handle the interests of employees means that management becomes more difficult. For this benefit, it is necessary to increase costs elsewhere, which is not worth the gain and damages one's reputation.
In the past two years, most of the retail companies under the trading company were laying the foundation for cost savings in these aspects. In 1984, the foundation was already quite solid, which also provided a strong impetus for expansion that year.
Relying on their advantage in reducing costs, they are now increasingly competitive with other companies. Especially after entering 1985, they finally defeated Lotte Retail, a subsidiary of South Korea's Lotte Group.
Koreans also have a temper. Although they can no longer drive it, they will not sell it to competitors, so they look for buyers in their own country.
It turns out that others are not fools. Seeing the crazy enthusiasm of the retail companies under the trading company, no one dares to casually enter the retail industry unless they are sure of victory.
Japanese retail companies are now also facing such a problem. The fierce tactics of retail companies under trading companies have also made retail companies in Europe and the United States afraid to enter the East and Southeast Asian markets rashly.
First, they are afraid that they will not be able to compete in these places and will bring serious losses to themselves. At the same time, they are also afraid that these companies will turn their guns and point the finger at their homeland, which will cause them to get burned.
After understanding the situation in the Internet cafe, Zhao Yi's trip in Shenzhen was almost over. During the free time, Jia Siqi reported to him on the overall operating situation of the trading company.
Since the trading company is now investing a lot of energy in the construction of domestic logistics networks and sales terminals, it has no energy to develop other businesses for the time being, and there is no need for Zhao Yi to give them guidance. (End of chapter)