Chapter 370 Pricing and Price War! (Part 2)
A great man once said something good.
Hit with one punch to avoid hundreds of punches coming.
In addition to the diplomatic field, this sentence also applies to business.
What Huadun Biotechnology will face now is a powerful punch from many foreign companies that have joined forces to attack.
Tell the truth.
It's not that Xu Yun and the others can't retreat.
But if he gives up now, the situation faced by ‘One Mantis Slayer’ will be even more difficult in the future.
Because the product of cockroach medicine has an upper limit of audience, every time a customer is snatched away by other brands, it means that there is one less "passer-by" left for Huadun Biotech.
And if we can win.
Then Huadun Biotech will eat up most of the 40 million sales in this cycle - this is not a one-time sales. In terms of the 'one beetle elimination' effect, at least 90% of consumers will choose Repurchase!
This means that ‘One Mantis Destruction’ will completely gain a firm foothold, and the offensive and defensive momentum will also change accordingly.
At that time, Xu Yun and the others can take their hands off the keyboard as long as they press F2A.
In the conference room.
Zheng Zu exchanged his eyes with the people around him, then turned to look at Gu Qunqing and asked:
"Manager Gu, I wonder if the operations department has made any estimates or discussions about the price war?"
Gu Qunqing nodded and affirmed:
"Of course there is. According to our preliminary discussions, if we want to fight a price war, we must first make preparations in two aspects."
"What two aspects of preparation?"
“The first is the reserve link of supply.”
Gu Qunqing raised a finger and changed the slide to another page:
"According to our prior analysis and simulation, before the price war begins, the finished product reserve of 'Yizhao' must be at least 800,000 pieces, which is a supply with a total price of 16 million."
“Director Qian, I’ll leave this matter to you, is that okay?”
When it comes to his own job, Qian Guanglin is no longer so reserved. He puffs up his chest confidently:
"No problem, Manager Gu. There is still about a month before the Chinese New Year. Based on the fact that the price war starts fifteen days before the holiday, we still have more than ten days for production."
"When the equipment is fully operational, it is not a big problem to produce 800,000 pieces of products - our raw materials mainly come from Henan, and now it takes about two days to ship to Luzhou after placing an order, and our existing material reserves are enough to support that. It’s time.”
But soon, Qian Guanglin's expression became hesitant again:
"It's just Manager Gu. If this happens, our funding will be problematic."
Qian Guanglin did not finish the second half of his sentence, but everyone present could understand what he meant:
Currently, the factory can produce 45,000 pieces of products working overtime throughout the day. Based on the price war starting from the first 15 days, the factory can produce 700,000 finished products.
But
At present, the production cost of 'One Mantis Killer' is still very high. Calculated at 6.5/piece, the production investment alone requires close to 5 million Chinese coins.
Huadun Biotech can use this money, but what about other publicity links?
It’s impossible not to advertise, right?
To know.
Internet sales are not just a matter of production, but also the rankings of online shopping platforms and big data promotion.
For example, the charge for a certain Baobao big picture carousel section is 250,000 yuan per day, which is 250,000 yuan.
Another example is the diamond booth of a certain treasure.
The Diamond Booth is charged per thousand impressions, the unit is CPM, that is, 1CPM = 1,000 impressions.
There are many kinds of diamond booths in Aubao, but the principle is that the higher the click-through rate, the more expensive the position will be.
For example, the transaction price of a position with a click-through rate of 2% is generally 5 yuan 1,000 times, and a budget cost of 1,000 yuan can be displayed 200,000 times.
Multiplied by 2% of the clicks, the total number of clicks that can be generated is 4,000.
Therefore, each click will cost 0.25 yuan.
More importantly.
This position requires bidding.
That is, the platform gives an initial price - for example, 0.1/click, and then others start to increase the price, and the one with the highest final price wins.
It's easier to say during ordinary time periods.
Generally speaking, except for young people, veterans will have a psychological upper limit on price, because if the upper limit is exceeded, it will be difficult to make back the original investment.
But now that there is a price war, those foreign companies will inevitably raise the cost of these booths through bidding, even if they lose money.
If Huadun Biotech does not follow suit, the booth will fall into their hands.
However, if the price is raised, the cost of publicity and distribution will increase significantly, which will put great pressure on the company's funds.
In the conference room.
Hearing Qian Guanglin's words, Gu Qunqing sighed, nodded, and readily admitted the current financial dilemma:
"Yes, according to estimates from the operations department, once this price war starts, our promotion costs may reach 1.5-2 million a day - after all, we need to take into account the malicious bidding of multiple platforms and competitors."< br>
"The average input cost for each location is estimated to be 50% or more higher than normal."
"In other words, within seven days, about 13 million will probably be burned."
"Hiss"
Hearing this number coming out of Gu Qunqing's mouth, everyone at the scene felt heavy in their hearts even though they had been prepared for it.
Burn 13 million in seven days, including product discounts.
In other words, in this price war, the company basically does not need to consider profitability and will inevitably suffer losses.
But this is normal.
After all, this is a life-and-death battle involving the future cockroach pesticide landscape, and its nature is far different from ordinary commercial competition.
The magnitude of profit is far from the forefront of the goal.
Throughout the history of Internet business, there have been many more exciting price wars than this.
For example, the Meituan Ele.me subsidy war in 2014 should be one of the most representative Internet price wars in Chinese business history.
From May 8, 2014 to April 30, 2015, Ele.me burned a total of US$455 million, a full 2.8 billion yuan.
On average, more than 200 million yuan is burned per month, 3 million yuan per day.
In this case, the competition is about whose ability to renew blood is stronger.
By "surviving" others to death, you can become king and dominate.
Think of this.
Gu Qunqing couldn't help but take a deep breath and said to everyone:
"Everyone, as I said just now, since we are going to have a price war now, we must first make preparations in two aspects."
"The first preparation is the supply of goods that Director Qian is responsible for, and the second preparation is..."
“I hope everyone can work together to solve the funding problem.”
After Gu Qunqing said these words, the expressions of everyone in the conference room did not change much.
Those who can sit here are all smart people. As early as when Gu Qunqing assigned Qian Guanglin a task, they had already seen some clues:
Gu Qunqing was ready to ask for money.
No wonder it is Gu Qunqing who is presiding over this meeting today instead of Xu Yun. In terms of face, Gu Qunqing is obviously much thicker than Xu Yun
Then Zheng Zu pondered for a moment, turned to look at a middle-aged man on the left side of Gu Qunqing, and asked him:
"Accountant Ma, how much money does the company have on its books now?"
The accountant Ma in Zheng Zu’s mouth was a bald man with a somewhat bitter and hateful appearance. After hearing this, he clicked the mouse a few times and quickly replied:
"Chairman Zheng, since the balance payment for the equipment of Hanhua Heavy Industry has just been settled, the company currently has about four million in funds on its account."
"There are also two repayments totaling more than 3 million that have not been settled during the deposit cycle. They will probably arrive next Thursday."
"Four million plus three million"
Zheng Zu's eyes flickered a few times and he calculated:
"That's more than 7 million in cash reserves. After deducting 5 million in product costs, there are still more than 2 million."
"If you include promotion expenses and other expenses, as well as a 'small treasury' to prevent special circumstances, the cash we have prepared this time will be at least about 15 million."
The 13 million operating expenses that Gu Qunqing mentioned earlier are just promotion expenditures for multiple online business platforms. In the price war, the proportion of social platforms cannot be ignored.
Toutiao, Bilibili, official account, Douyin.
If you spend money in these places, it will be a terrible bottomless pit.
Then Zheng Zu hesitated for a moment and raised his hand again:
"Manager Gu, what do you think of this? The new venture fund will lend another 800, let's say 10 million, and lend 10 million to the company, but the interest will be 3.5 million per day, and the money must be paid back within a month."
Hearing this, Xu Yun in the audience couldn't help but reveal a hint of joy in his eyes.
When the company introduced the FOERDA-T632 production line, Zheng Zu borrowed a flexible loan of 20 million yuan with an interest rate of 10,000 yuan.
However, shortly after the FOERDA-T632 production line entered the Wassenaar Agreement, Xu Yun purchased several production lines from Hanhua Group, which reduced the cost by a large margin, so the money was not actually used much.
Not long ago, as the payment for the new batch of products arrived, Xu Yun returned the 20 million to the new venture fund together with interest.
Now that the company is facing a crisis, Zheng Zu really thought of this fund again.
This is also one of Xu Yun's and Gu Qunqing's most important goals today.
Still the same sentence.
Zheng Zu has a very typical businessman mentality, but this does not mean that he is only profit-seeking or does not know how to adapt. He is still a good person.
To know.
Although the money was called a flexible loan, the approval process was actually quite cumbersome. If he wanted the money to arrive quickly, Zheng Zu actually had to bear certain risks.
As for the interest of three and a half ten thousandths.
Although it is a bit higher than two ten thousandths, under the current circumstances, no one will care about these details.
The new venture fund is not Zheng Zu’s private treasury. There are some rules that must be followed.
Then Zheng Zu thought for a while and said:
"In addition, I will ask people on the e-commerce platform after the meeting to see if they can temporarily open a back door for us, such as receiving payment immediately after the logistics information is released - this should be able to squeeze out about two to three million. ”
As soon as Zheng Zu said this, the atmosphere in the conference room suddenly became visibly livelier.
As everyone knows.
For most merchants, the settlement method of a certain treasure is generally payment after receiving the goods, which takes approximately 7 to 15 days.
At the same time, Moubao has also issued a loan with instant settlement, that is, the logistics information is entered in the background and settled immediately, and the interest is about one ten thousandth.
However, for large manufacturers, settlement on Moubao and other platforms will not be so casual.
Those large enterprises generally have a settlement and payment cycle, such as settlement once a month or even three months, etc.
That is to say, manufacturers will always have a sum of money to pay on the online shopping platform, instead of settling every seven to fifteen days.
Predictably so.
Once the price war starts, the amount of this deposit will definitely not be too small - at least it will not be lower than the three million that has not yet been paid back.
If Zheng Zu can free up this part of the funds, the help to the price war will obviously be very considerable.
Seeing Zheng Zu's efforts, Tian Liangwei hesitated for a moment and said:
"Manager Gu, on behalf of the School of Life Sciences of USTC, I will also borrow 2 million, but the process may be more complicated and it will take about a week to get the money."
2 million.
Although this amount is not as much as Zheng Zu's 10 million, for Tian Liangwei, this is the limit of what he can afford.
And unlike Zheng Zu.
Tian Liangwei's actions may also generate some criticism, and it is easy for the facts to be distorted to set the pace.
For example, some people deliberately did not say it was a loan, refused to talk about the return, and smeared the matter as a personal "capital injection" behavior, and a negative news release came out.
This is not Xu Yun's imagination. This was how a certain academician of NTU was hacked.
Think of this.
Xu Yun couldn't help but sigh.
no way.
Who lets his pocket have less money?
Huadun Biotech is currently in a stage of rapid development, basically repeating the routine of selling - collecting money - buying materials - increasing production - collecting money.
Since investment continues to increase, the profit is actually not much.
At present, including dividends, Chairman Xu Yun only has about 480,000 in his bank card - more than 200,000 of which are original savings.
It makes people sad when they see it and sheds tears when they hear it.
So in this case.
It is obviously impossible for Xu Yun to wave a check as grandly as his father who is a financial sponsor.
Of course.
If nothing else happens, Xu Yun will have more money in his card by this time next year.
His eyes returned to reality.
After Tian Liangwei borrowed a sum of money, the agent of the School of Physics who attended the meeting on behalf of Academician Pan also borrowed 2 million in cash.
Including Zheng Zu, everyone had a tacit understanding and did not bring up the idea of using it as stock capital.
After all, Xu Yun doesn't have much money in his hands right now. If he raises funds now, Xu Yun's shares will inevitably be diluted.
This approach is a bit too unorthodox - although the term "eating" is a bit pretentious in shopping malls, Huadun Biotech is a company affiliated with the University of Science and Technology after all, so some attention should be paid to this aspect.
If it were another venture capital institution, they would 100% ask for a Series B round of financing to dilute the founder's shares, otherwise not a penny would be invested.
This is the cruelty of the shopping mall, and it is also the reason why many newly hatched companies want to gain a XX status.
all in all.
With the arrival of 1000+200+200, Zheng Zu promised to contact the platform to ensure real-time payment.
The funding problem of this price war has been somewhat resolved.
An hour later.
The meeting adjourned.
Xu Yun accompanied Tian Liangwei and Zhou Shan downstairs and said goodbye to the two big guys in the parking lot.
Looking at the cars going away, Xu Yun's brows furrowed slightly.
Don't know why. He always feels that this price war seems to be far more than what it seems.
(End of chapter)