April 20, 2005, the twelfth day of the third lunar month in the Year of Yiyou.
Tan Jincheng signed the most important contract of his life.
With this contract, Tan Jincheng and Zhang Xupeng would both embark on a new starting point in life.
As Tan Jincheng expected, James was indeed aiming for this sudden policy change, intending to drive down prices.
However, policies could change, but the market would not, a fact both sides were well aware of.
Exports were indeed a huge piece of the pie, and Tan Jincheng naturally wouldn't give it up, but the domestic market also could not be ignored.
With the improvement of living standards, the growth of the domestic market was visible to the naked eye.
Jinpeng Trading's development speed was too fast.
James initially tried to leverage this information asymmetry and the temptation of fixed monthly supplies to negotiate a lower price.
However, what James didn't expect was Tan Jincheng's extremely accurate judgment of the market.
This kind of market analysis capability was completely unlike what a small company of less than 10 people could match.
Through a series of data, Tan Jincheng threatened to temporarily abandon parts of the European and American markets, focus on the domestic and Southeast Asian markets, and even reduce production capacity and temporarily maintain a contraction if necessary, which put James in a very passive negotiating position.
Fortunately, although both sides argued vehemently, they were both keen to make this cooperation happen.
A stable supplier was greatly beneficial to both cooperating parties; not only could the supplier itself obtain substantial profits, but the client could also do so.
After nearly two hours of back-and-forth, the two sides finally reached a preliminary cooperation intention.
The formal contract would be signed after both lawyers confirmed it tomorrow.
The contract signed with James was a long-term supply contract, with many details to pay attention to, unlike a template-based contract.
"Tan, you Chinese have an idiom called 'zizhubijiao' (meticulous about every trifle), right? You were exactly like that just now."
"NO NO NO, James, we Chinese also have an idiom called 'tixiehoubei' (to guide and support younger generations), meaning that seniors like you take care of juniors like us in business, giving us a chance to make money."
Damn it, this tall guy knows a lot, even 'zizhubijiao'.
How can I not argue with you about prices?
Your one dime becomes over eight dimes for me; how many clothes do I have to sell to make that up?
Speaking of which, this year's exchange rate is not friendly to export businesses.
The average exchange rate of the US dollar to RMB was above 8.23 last year, but this year it has dropped to 8.19, with a certain decrease each year thereafter until it breaks the 8 yuan barrier.
"To guide and support younger generations? Interesting, interesting. Okay, I'll remember that phrase."
James looked at Tan Jincheng playfully.
"Yes, the achievements Jinpeng Trading has today are inseparable from Mr. James's help. Last year, you strengthened my confidence in doing clothing business. You are like my uncle,"
Tan Jincheng said seriously.
With the preliminary cooperation agreed upon, flattering and saying nice things cost nothing, so why not?
This "uncle" left James bewildered; the cultural difference was evident here:
"Haha, uncle? Tan, you truly are the most peculiar young man I've ever met."
It must be said that although they had only met twice, Tan Jincheng had indeed left a deep impression on James.
There was the daring and hardworking spirit of someone with a backpack, the cautiousness when signing contracts, and this year, last night's and today's negotiations especially opened James's eyes.
In Tan Jincheng, James saw the adventurous spirit of youth and the sophistication and astuteness of a middle-aged person, as well as his unique and forward-thinking insights into the market.
Since the official abolition of quotas on New Year's Day this year, in the post-quota era, the production capacity of Chinese garment and textile enterprises has been fully released.
In January this year, textile exports increased by a significant 29% year-on-year, an 8 percentage point increase compared to the average annual growth last year.
Among these, exports to the EU and the US reached 1.49 billion US dollars and 1.34 billion US dollars respectively, changing the ranking order of China's export market for many years, surpassing Hong Kong and Japan to become the top two export markets.
Although the overall pie is getting bigger, if one person takes too much, others will naturally get less, and friction will arise accordingly.
This is an unchanging truth of human nature.
In fact, the widely discussed friction events in later generations have always existed throughout the history of exports, appearing periodically.
However, due to the passage of time and the undeveloped internet, they were forgotten by the general public or never paid attention to.
But as industry professionals, they definitely know this.
Where there's friction, there are negotiations, especially during the process of the pie growing larger, negotiations will surely be faster.
Tan Jincheng's view was that negotiations would definitely be completed within this year, and once this year was over, the market would be different.
Everyone is busy making the cake; the bigger the cake, even if the share is smaller, the amount received will be considerably more.
Arguments are necessary, but they clearly cannot be the main focus.
And after the arguments end, relying on China's textile production capacity and cheap labor, it will inevitably return to its previous state.
Businessmen pursue profits, ordinary people want cheaper and better products, and the market is there.
The advantage is mine.
Tan Jincheng's strong data analysis capability and confidence in the market, coupled with the fallback strategy of contraction, convinced James, making him less aggressive on price.
Because these were all consistent with his own analysis! With his cards almost seen through, there was no longer any so-called information asymmetry advantage.
James's negotiation strategy for this procurement trip was to use the advantage of information asymmetry against these suppliers.
Having worked in the industry for many years, he knew how little attention these small and medium-sized Chinese enterprises paid to data analysis, only knowing how to work hard, and their businesses were almost in a crude growth model.
When orders were high, they would aggressively expand production capacity.
When orders were low, they would compete with peers or directly cut production, or even close factories.
Although he got off to a bad start with Jinpeng Trading, James was not discouraged, because no matter the outcome, it was beneficial to him.
Moreover, Jinpeng Trading also made some concessions, and the price was within his acceptable range.
You make money, but I'll make more, the advantage is mine.
"Tan, you know what? You really have a talent for business. I believe your future achievements will be more than this."
James raised his glass and said to Tan Jincheng.
Who doesn't engage in commercial flattery? Tan even called him "uncle," so it was normal for James to offer a few harmless compliments.
"Then I'll borrow Mr. James's auspicious words. After we confirm the contract details tomorrow, shall I arrange something for you again?"
"No, no, there's still a lot to do later."
James said with a serious expression.
He understood what Tan meant, and although tempted, serious matters were more important.
He still had several suppliers to negotiate with, and he couldn't afford to be like this again as he was with Tan.
After their conversation ended, it was already eleven o'clock at night when they returned to the hotel.
"How was it? What's the result?"
Zhang Xupeng, who had been eagerly waiting, immediately asked Tan Jincheng upon seeing him.
"See for yourself."
Tan Jincheng took the initialed agreement from his backpack and tossed it to Zhang Xupeng.
Tan Jincheng, who generally had a low tolerance for alcohol, felt a bit dizzy after letting his guard down.
After the negotiation, he chatted with James for nearly an hour.
The guy kept clinking glasses with him, he wondered if it was revenge for not getting his expected results.
Besides, foreign liquor was truly awful; well, baijiu wasn't much better, coffee was more suitable.
In a daze, Tan Jincheng remembered a few times he had coffee with Gu Qingqing and shook his head.
"What the hell, why am I thinking of her at a time like this?"
Since their last meeting, although they occasionally sent text messages, they didn't communicate much, mainly because Tan Jincheng had been too busy lately.
"Holy cow! 500,000 US dollars in supply every month, signed for a year? And the unit price is quite good!"
Zhang Xupeng looked at Tan Jincheng in shock.
Having been in the clothing business for half a year, Zhang Xupeng knew how much profit there was in exporting a piece of clothing.
According to Xiao Tan's previous analysis, the order prices at this Canton Fair would not be as good as last year's, and the profit margin would decrease, which indeed turned out to be the case.
Xiao Tan had also analyzed that James likely wanted to fiercely drive down prices, but he never expected this price to be so friendly to Jinpeng Trading.
When did these foreigners become so easy to talk to, or did they suddenly become benevolent?
Shouldn't big clients with large orders be very strong?
How did Xiao Tan manage to win him over?
A monthly supply of 500,000 US dollars means 6 million US dollars for the whole year.
Converted to RMB, that's nearly 50 million yuan in turnover.
With just this one contract, they can live very comfortably this year.
Xiao Tan is simply amazing!
"Hey, hey, hey, don't sleep yet. Tell me how you guys chatted, and where you went last night. Old Sun and Old Liu looked really shifty when they came back, and when I asked them what happened, they were all vague."
Zhang Xupeng shook the alcohol-scented Tan Jincheng.
"Don't shake me. Don't you know you shouldn't shake someone who's had alcohol? What if I throw up?"
Tan Jincheng said helplessly, getting up.
He had wanted to lie down for a bit, but this kid next to him wouldn't stop chattering.
"Quick, pour me a glass of water, don't you have any sense?"
"No problem, no problem, coming right up. You're my grandpa now,"
Zhang Xupeng said fawningly as he ran to pour water.
There's no need to worry about the small orders received these past few days.
Although the profit margin has decreased, including tax rebates, they can still achieve a net profit of 20% with their eyes closed.
This one order from James alone will bring in 10 million yuan in revenue – they're rich!
And today is only the 20th; there's still half a month until the Canton Fair officially ends.
At worst, they can still secure enough orders to cover this year's operating expenses, which is absolutely no problem.
Xiao Tan arrived on the 11th, so it's been exactly 10 days until today.
In just 10 days, Xiao Tan, with his magical way of operating, has exceeded expectations in securing Jinpeng Trading's order volume for the entire year!
Zhang Xupeng looked at Tan Jincheng with fiery eyes.
This was millions in profit, a single contract bringing in millions in profit!
Once upon a time, this was something he wouldn't even dare to dream of.
The reason he wanted to do business back then was partly because of his limited learning ability, and partly just to live a carefree life.
For a moment, Zhang Xupeng forgot to hand over the water glass in his hand.
"Hey, wake up. What kind of look is that? I'm telling you, even though we're brothers, I still prefer women."
(End of chapter)
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