Return to 1958 and build a century-old giant

Chapter 83 Business Negotiation and Deli Brand

Robert saw that Yang Wendong denied it straightforwardly, which confirmed his own judgment. However, due to his duty, some things still needed to be confirmed, so he asked: "Eric, don't you want to hear about the price?"

Yang Wendong shook his head and said, "This is my business. I am not going to turn it into cash directly."

What's more important is that if it is a one-time transaction and the amount is not small, and it is known by the Hong Kong media, it is very likely to attract gang members, which is actually a bad thing for oneself.

But if you slowly develop by relying on your own industry, the gangsters generally won't be too jealous.

After all, the existence of Chinese factories is also the foundation for the British Hong Kong government to maintain stable public order. They will not allow gang members to destroy factories at will. Otherwise, factory owners like Li Jiacheng would not have been able to develop.

Robert smiled, then stretched out his right hand, spread out five fingers, and said, "My offer is $5. This amount of money is enough for you, Eric, to live a carefree life in the United States, Europe, or anywhere else."

"50 US dollars. 3M is really courageous." Although Yang Wendong was not planning to sell the patent, he was still nervous when he heard the price.

50 US dollars is roughly equivalent to less than 300 million Hong Kong dollars, which is a sky-high price in Hong Kong. Li Jiacheng is known as the plastics king, and his estimated annual net profit is about this amount.

However, compared to the future profits from Post-it notes, this is child's play. Even the currently popular plastic flowers may have a larger market than Post-it notes in the short term, but they are still incomparable in the long run.

Robert put his hand down and said with a smile: "It seems that Eric is just like me. We are both able to recognize the huge commercial value of sticky notes."

50 US dollars is not a small amount of money even for 3M. Before coming to Hong Kong, they had seriously discussed the commercial value of Post-it Notes internally and finally decided to cut the Gordian knot and buy the patent at a high price.

Otherwise, if other companies or businessmen discovered it and got there first, they would miss a good opportunity.

Yang Wendong nodded and said, "Yes, I know its value, but its value also needs a strong channel to promote it, so I hope we can have a perfect cooperation."

"Okay, I think so too." Robert followed up, "I hope Eric that you can authorize it to us for sales and production. In return, you will first receive a sum of money, plus a commission for each sticky note."

"No." Yang Wendong shook his head and rejected the idea. He then said, "First of all, I will not authorize you to produce the products, nor will I authorize anyone else to produce them. Only I can produce the sticky notes, and then I will sell them to you at a negotiated price."

If Yang Wendong wanted to make a career in Hong Kong, at a time when the real estate industry was not yet large in scale, he needed a factory to protect himself.

Factories can create jobs for a large number of people, and the Hong Kong government also needs to win over large factory owners in order to maintain stable management.

The more wealth you have, the bigger your factory needs to be, so that a balance can be achieved. Otherwise, if you have a lot of money but nothing, you will just be a lamb to be slaughtered.

This kind of thing may not necessarily turn out to be the worst, but as long as there is a possibility, Yang Wendong needs to try his best to avoid it.

Robert frowned and said, "Eric, I know a little about Hong Kong's industry. There are no paper mills or glue bases, and it is far away from the US market. From the perspective of economic benefits, it is not cost-effective."

Yang Wendong said with a smile: "But our labor costs are low. As for the transportation problem, sticky notes do not take up much space and their shape is suitable for transportation. We just need to make them waterproof, so the transportation cost is not high.

I must ask for this, otherwise, how can I know how much has been sold at the sales terminal?"

This is actually the most important thing. If the production is authorized, who knows how many are sold? If they underreport the number by half, can you still verify it?

Seeing Yang Wendong's strong attitude, Robert said, "3M's board of directors hopes to obtain the production rights. Since Eric said so, I will discuss this matter with the company after I return to the hotel tonight."

"Okay." Yang Wendong smiled and said, "One more thing. I can only give you exclusive operating rights in the United States at the moment."

"Why is that?" Robert quickly said, "Although 3M is an American company, we have sales channels all over the world."

"I know." Yang Wendong nodded and said, "But it is impossible to launch any product on the market at the same time around the world. As you can see, my production capacity here is probably not enough even for one state in the United States.

So we have to take one step at a time. It will take quite some time for me to increase my production capacity. I have to satisfy the US market first and then expand to other countries.

Once we have enough production capacity and our products have achieved success in the United States, we can then negotiate for agency rights in other countries, how about that? "

In the past, he only cooperated with customers in the UK and Japan for the mouse traps, instead of having exclusive agency rights, because they were just small traders with imperfect channels, and giving them exclusive agency rights would be a waste of his resources.

But 3M is different. If such a large company wants others to vigorously promote its products, it must give them exclusive distribution rights. This is good for both parties.

However, there has to be a limit. We cannot give too much at one time. It is enough to give it to the largest market in the United States first. We don’t need to consider the future now.

As for our own production capacity, that is also a fact.

"Eric, you are so cautious." Robert naturally understood what Yang Wendong meant, and then said: "I understand what you mean, and I will report this matter to the headquarters in the evening.

Since you are producing it here, will the selling price remain the same as before?"

"Yes, 1 sticky notes for 50 dollar, but the price will be changed based on future sales." Yang Wendong nodded in confirmation.

The price remains the same for now. If sales in the future far exceed production capacity, he will consider raising the price.

On the other hand, if the production capacity is sufficient in the future, the price may be lowered in order to maximize profits. In short, everything is in compliance with the market rules of supply and demand balance.

Robert thought for a moment, and he had completed the preliminary information he had gathered today, so he said, "Okay, Eric, let's stop here today. We will discuss further tomorrow when I get the new authorization."

"Okay." Yang Wendong nodded.

Negotiating business with someone who is not the boss is very difficult because the person involved cannot make a decision immediately.

However, this is also the norm in doing business. The boss is usually the last to show up, or even not show up at all, otherwise he would be very busy.

Many times, it is normal for a cooperation to be negotiated for several months because of the people behind the two negotiating parties.

Fortunately for Yang Wendong, he could make the decision immediately. In addition, he was very confident about the future business development of post-it notes, so many things were easily decided.

……

The next day, Robert did not come to the factory again, and Yang Wendong went to the hotel for negotiations. They had seen everything they could at the factory, and the environment of the hotel was more suitable for the two of them.

This time, Robert made coffee for Yang Wendong and said with a smile, "The coffee in Hong Kong tastes pretty good. Before I came here, I brought some instant coffee with me because I was worried that there wouldn't be any good coffee here."

"Hong Kong is one of the world's largest trading ports. As long as you have money, the quality of life is no worse than that of big cities in Western countries," Yang Wendong said with a smile. In this era, the cost of information communication is particularly high, and so is the cost of media publicity. Therefore, many people's understanding and cognition of other places may be decades ago.

Robert smiled and said, “Yes, the buildings and businesses next to the hotel make me feel like a Western city;
But the place we went yesterday, near your factory, gave me the same feeling as the United States a hundred years ago in history books.”

Yang Wendong nodded and said, "So, I insist on producing it myself, so that it can also create a lot of jobs in Hong Kong."

Although he wanted to secure his position by creating a large number of jobs, Yang Wendong also really wanted to give those poor people in the squatter huts a normal job.

Perhaps I can't do much with my current limited strength, but at least I can provide a full meal at noon. I don't know how many families, with several people and children, work hard every day just to fill their stomachs.

He had suffered similarly before, and now he hopes that fewer people will suffer the same fate as him in the future.

Robert praised: "Very good, but I was a little ashamed that I only thought about economic benefits yesterday."

"You are also working for the company and striving for higher profits, there is nothing wrong with that." Yang Wendong smiled.

In this era, there are many "saints" in Europe and the United States. This is mainly because Western countries, in order to "demonstrate benevolence and righteousness", have begun to promote various "for the future of mankind" rhetoric, thus leading many of their own people to fall into it.

Although most people would not really become unselfish so easily, they would at least have some compassion for other poor people.

"Well, let's get down to business." Robert then said, "Eric, I contacted the US headquarters last night. They agreed to your plan, but they want 20 years of exclusive distribution rights in the United States, and priority for distribution rights in Europe."

"We have a saying in Chinese, 'a lion's mouth is wide open.'" Yang Wendong translated it in a simple way, and then asked, "Can your headquarters open its mouth a little wider?"

The 20-year distribution rights are not the upper limit for 3M Company, because the patent is only valid for 20 years. After 20 years, any factory in the world can legally produce Post-it Notes, and the inventor Yang Wendong cannot stop it.

As for the priority of European distribution rights, the same logic applies. This is because on this planet, excluding the Warsaw Pact countries, Europe and the United States together account for an estimated 80% of the global economy. It makes little sense for other places.

Robert smiled and said, "Everything is negotiable. We are just putting forward our requirements. Besides, the higher the requirements, the more benefits we will give you."

"If that's the case, then it's no different from selling the patent to you." Yang Wendong shook his head and said.

"Well, business is business, and we are all businessmen. It's all about maximizing profits." Robert said, "At least we are one step closer to cooperation. Now, you can express your ideas."

Yang Wendong nodded and said, "My request is actually very simple. I can give you five years of exclusive operating rights in the United States. Within five years, you can only sell sticky notes in the United States.

Europe, Asia, South America or Africa, at least in this negotiation, have nothing to do with you. As I said yesterday, other places will be considered only after the results of the US market come out and our production capacity is sufficient. "

Robert frowned and said, "Five years is too short. If we spend several years toiling to deliver sticky notes to all potential customers in the United States, but you take back the distribution rights after five years, wouldn't our efforts be in vain?"

"That makes sense. We can sign a separate agreement. Five years later, you will have priority in the US market. How about that?" Yang Wendong said calmly.

In fact, he also knew that five years was too short. Even in the era of information explosion in the future, it would take at least two or three years for a product to cultivate a mature market.

In other words, it is very likely that a large amount of investment will be required in the early stages of the channels, and you may not make any money. You just have to wait until the channels are laid out before you can make money without doing anything.

If Yang Wendong were a distributor, his own channels would probably agree to it, and any profit would be good; but large channel dealers will not focus on short-term profits. They have strong resources, but mobilizing such resources also costs energy and costs. To promote something, they must pursue long-term profits.

Robert thought for a moment and said, "At least a 10-year authorization is required, plus a 5-year agreement of priority. Otherwise, the headquarters will not agree."

"It's not impossible." Yang Wendong thought for a moment and said, "But I need you to lend me some money."

In fact, five or ten years doesn’t matter to him. As long as the cooperation is good, there is no better choice than 3M.

"Borrow money?" Robert asked in surprise.

"Yes." Yang Wendong nodded and said, "You have seen the situation of our factory, and I have nothing to hide. I know that with 3M's channel capabilities, we can quickly bring in a large number of orders;

But my factory's capacity is far from enough, so I need some funds to buy equipment again in advance to meet the future needs of the US market, which will be good for both of us."

"That makes sense." Robert asked again, "How much money is needed there?"

Yang Wendong asked back: "That depends on how much you can purchase in the first batch. I will make a decision. Given the scale of 3M, they should do a preliminary market survey, right?"

"Well, okay, maybe you can borrow money, but at least it needs to be collateralized, right?" Robert couldn't make a decision, but he had to ask about these things clearly.

"That's true, but I don't have any collateral!" Yang Wendong was very honest.

Robert paused and said, "The patent for Post-it Notes is also valuable and can be mortgaged."

"That won't work. Mortgage of the patent is not an option." Yang Wendong shook his head.

Now that the patent has been mortgaged, if there is any obstacle in the future, it will be over. This kind of thing is very normal in the business world. As long as it is possible, Yang Wendong will not agree to it.

Robert frowned and asked, "There must be a mortgage, right?"

Yang Wendong said with a smile: "How about using the profits from our future cooperation in the US market as collateral?

The amount of funding can be negotiated.”

"I can't make the decision." Robert nodded and said, "Then I will talk to the US headquarters tonight and tell you the result tomorrow."

"Okay, I think this will definitely be a win-win model." Yang Wendong said with a smile.

Robert agreed, but then he thought of something and asked, "By the way, what is the brand of this sticky note? The name of your company is too awkward to translate into English. It is not suitable for promotion in the United States or even other non-English speaking countries."

Yang Wendong replied: "I have already registered a name, called deli, D, E, L, I. This will be the brand of post-it notes in the future."

PS: Please give me a monthly ticket, there will be another chapter in the evening

(End of this chapter)