Zhang Haiping had been feeling a bit on edge lately.
How could the excellent situation have taken such a sharp turn after March?
Every year there were a few months of off-season, but was it coming a bit too early this year?
Recently, while having tea with his peers, everyone was reporting fewer orders than before.
It seemed they had entered the off-season prematurely, all because of changes in export policies, with foreigners placing certain restrictions on their dumping.
Currently, the factory's orders could still be maintained, but it was an undeniable fact that orders for his peers were generally down.
With the traditional off-season approaching, he didn't know what this year would be like.
Less than two months after the satisfaction of expanding production, he was already facing order pressure.
A deep sense of anxiety plagued Zhang Haiping.
"Oh, Boss Tan is still attending the Canton Fair in Yangcheng. I wonder how many orders he's received."
Speaking of which, the recent production capacity had been sustained by Jinpeng Trade's orders.
Being export orders, Jinpeng Trade's orders, though demanding, offered the best and most stable profit margins for Zhang Haiping's factory.
This Canton Fair had raised its entry bar and requirements.
He had recently heard that many companies had their samples confiscated.
If even Jinpeng Trade's orders couldn't guarantee stability, then it would truly be a headache.
Expanding capacity was also a well-thought-out decision; once started, there was no turning back.
He had to persevere no matter what.
Zhang Haiping had also been developing new clients recently, but with little success.
The small bosses in Beicang were quite united.
If a factory truly had no work, other friends would share some of their orders.
However, the profit margins for such orders were understandably low, barely enough to support the workers.
Zhang Haiping had also shared orders with others, but when everyone was struggling, there wasn't much they could do.
"Boss Zhang, what are you busy with? Why the long face?"
A voice accompanied by the opening of the door startled Zhang Haiping from his worries.
He looked up and saw it was Tan Jincheng!
"Oh, Boss Tan, why are you back now? Aren't you at the Canton Fair in Yangcheng?"
That was close.
He was just about to curse someone for entering without knocking.
Good thing he glanced up.
"I was just worried Boss Zhang might be anxious, so I flew back specifically to bring you orders."
"How about it? Aren't you touched? If you are, help me reimburse the airfare."
Zhang Haiping rolled his eyes at Tan Jincheng and didn't respond.
He casually offered him a cigarette, then changed the subject.
"How was the Canton Fair? I heard the situation changed a bit today?"
"It did a bit, but it didn't affect us much. I came back temporarily for something, but I did indeed bring you orders."
Tan Jincheng took the cigarette and nodded.
"Really?"
Zhang Haiping's voice noticeably rose a notch.
"Of course it's real. So it's not too much to ask you to reimburse my airfare. If I waited until after the exhibition to find you, you'd still be worried for half a month."
Tan Jincheng looked at Zhang Haiping with a hint of playfulness, then continued,
"When I came in just now, you had a long face. Were you worried about this?"
"Oh, who isn't? Developing new clients hasn't been ideal recently, and orders from some friends I know are also decreasing. With so many people to support, how can I not be worried?"
Tan Jincheng nodded empathetically.
Bosses earned a lot, but they also worried a lot.
It truly wasn't easy to be one.
There was no such thing as getting something for nothing in this world.
They constantly had to worry about the company's business.
For Zhang Haiping, every day he opened his eyes, there were the salaries of sixty or seventy people, factory rent, utilities, and a payment to raw material suppliers at the end of the month.
These were all basic expenses.
"Didn't I solve that for you? No need to worry. Next month, not only can you operate at full capacity, but you can also do some favors for others. But the quality remains the same old rule."
Jinpeng Trade's shipments in May were considerable.
Besides James's fixed quota of 500,000 USD, there were also 5 small orders, totaling nearly 300,000 USD.
In one month, they would ship nearly 800,000 USD, or over 6 million RMB worth of goods, which was certainly enough for Zhang Haiping to do some favors.
Small factories using their orders to do favors for each other, helping one another out—Tan Jincheng knew about these things.
It was the art of survival and the benefit of unity.
Doing business alone couldn't achieve much; only by uniting to earn foreigners' money was it truly worthwhile.
"Are you sure? Full capacity and still able to do favors?"
Zhang Haiping's eyes widened, sounding somewhat disbelieving.
"Why would I joke with you about something like this? See for yourself."
With that, Tan Jincheng pulled out the production details sheet from his backpack.
It contained the various clothing styles and quantities to be shipped next month.
Although it was already 2005, complete paperless office was not yet achievable.
Among small bosses of Zhang Haiping's generation, many couldn't even type.
Being able to play Minesweeper, Solitaire, or fight landlords on a computer was enough for them to brag.
Many factories were reluctant to buy computers.
In their eyes, someone like Tan Jincheng, who not only had fully equipped company computers and various peripherals but even had network cables and printers installed at his residence, was a prodigal son.
Tan Jincheng always carried a backpack when he went out, containing some paper documents.
His laptop was also kept in the car at all times.
To those unaware, Tan Jincheng, with his backpack running between clients, indeed looked like a university student at first glance.
Zhang Haiping eagerly watched Tan Jincheng pull out a stack of A4 papers from his backpack.
After Tan Jincheng handed them over, Zhang Haiping eagerly stared at the rows of numbers.
This was just the production details sheet for May.
Although James had a fixed monthly supply, the specific styles and quantities would only be officially confirmed at the beginning of the month.
Tan Jincheng hadn't taken everything out at once.
Nowadays, the apparel industry had relatively high gross profit margins due to information asymmetry and other reasons.
Taking clothes in domestic clothing stores as an example, it was common for an item costing a dozen yuan to sell for around 100 yuan.
Excluding rent, utilities, labor, and other costs, the retail end's profit was still quite substantial.
The export trade end was similar to wholesale; the gross profit naturally couldn't be as exaggerated, but it was still not low.
The 800,000 USD worth of orders per month was just from Jinpeng Trade's side.
Naturally, when it reached Zhang Haiping, it wouldn't be that price.
The cost of a finished knitted garment included fabric, labor, materials (zippers, buttons, labels, etc.), dyeing and washing, as well as rent, equipment, and other miscellaneous expenses.
These were things Zhang Haiping needed to calculate, without Tan Jincheng having to worry.
Tan Jincheng only needed to understand the cost components of a finished garment to avoid being overly swayed by Zhang Haiping and having his own profits squeezed.
What Tan Jincheng needed to do was to control the cost of a finished garment to about 50%, removing various miscellaneous costs, thus ensuring a gross profit of about 40% for each order.
With the tax rebate policy, the company's gross profit margin could maintain a relatively high level.
For subsequent exports of electronic products and two-wheeled electric vehicles, Tan Jincheng would also operate this way.
Two-wheeled electric vehicles were currently in their development stage.
Exports, compared to clothing and electronic products, could only be considered a niche market.
But in the future, after China became the world's largest producer of two-wheeled electric vehicles, their export volume would double year after year.
In 2005, an electric vehicle sold for two or three thousand yuan, and it was still the same in 2023.
The profit margin was thin, but it didn't mean the industry couldn't continue.
If it really didn't work out, they could always go public, cash out, and cut leeks.
Several well-known electric vehicle brands eventually went public.
As long as they persisted in branding, Tan Jincheng might not be unable to achieve it.
Tan Jincheng did not register his second company as a pure trading company but as an industrial enterprise with this intention in mind.
In the future, as profit margins declined, pure trading companies would find it difficult to survive.
The trend was towards integrated production and sales: producing and selling oneself, handling exports oneself, and reducing intermediate links as much as possible to ensure profit.
After staring at the production details sheet for a few minutes, Zhang Haiping got up and returned to his desk, presumably preparing to meticulously calculate.
Tan Jincheng didn't disturb him and sat by the tea table, brewing tea.
Over half a year, the relationship between Tan Jincheng and Zhang Haiping had evolved from an absolutely disadvantaged position to an equal footing, and with James's fixed supply orders, Tan Jincheng's status was now slightly higher.
Half a year ago, Tan Jincheng wouldn't have directly pushed the door open and sat so leisurely brewing tea as he did today.
Half an hour later, Zhang Haiping looked up and asked Tan Jincheng,
"All for me?"
"Yes, all for you. Pretty loyal, right? But give me a real price, don't play games. You know the current policies; going back and forth is meaningless. You're busy, and so am I."
"Of course. We've cooperated for half a year; playing games would be pointless. I'll give you a formal quote by tomorrow afternoon at the latest. The quantity needed this time is quite large, so I need to calculate carefully."
After roughly agreeing, Tan Jincheng teased again,
"How about it, is it worth you reimbursing my round-trip airfare?"
"You young man, why are you always fixated on two plane tickets? Just call a few friends tonight, and a full service package should be enough."
"Forget the full service package. You old fogeys shouldn't corrupt me. Also, starting from June until next May, I can guarantee at least sixty percent of this order's stable supply each month."
"So, Boss Zhang, I don't object to you developing new clients, but you also need to be mentally prepared for my capacity and not delay my affairs."
"Sixty percent stable every month? Are you sure?"
Zhang Haiping shot up from his office chair.
A monthly stable supply of sixty percent of this order, based on his rough estimate, meant a sales volume of approximately 2 million yuan.
This would be completely sufficient to cover the factory's entire annual expenses.
If he developed a few more new clients or if Boss Tan provided a little more orders, then they could live very comfortably.
Another huge benefit was that if there were truly stable orders, then for Zhang Haiping's factory, there would be no off-season this year!
Without an off-season, employee retention rates would be higher, reputation would improve after a year, and recruiting would be easier.
"I have no reason to joke about such a big matter with you. As long as your quote is reasonable, I can guarantee that amount."
Yes, how could such a thing be a joke?
Boss Tan truly gave him a huge surprise.
What a good day it was today.
"Damn it, why didn't you say such good news earlier? Reimburse, reimburse, I'll reimburse your ticket, and arrange the full service package tonight. I'll make the call now."
"Damn it, are you the one who wants to go have fun? Call later, the ticket was a joke. I have something I want to ask you about."
Zhang Haiping ignored whatever Tan Jincheng was saying and continued dialing the phone, merely asking casually,
"What is it? Anything this old brother can help with, I'm obliged."
(End of Chapter)
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