I'm not interested in money or women.

Chapter 82 Who says it can’t be solved?

Lu Feng had already anticipated Xu Yangtian's refusal, so he was not surprised at all.

He looked at Xu Yangtian and said calmly: "There is no rush to talk about financing. I want to hear your plans for the future. How do you plan to run Sheinside in the next few years?

Or will you still make money as a second-hand dealer by selling fake goods under the guise of selling mutton like you do now? "

Hearing Lu Feng's words, Xu Yangtian's face changed drastically, his tone turned cold, and he asked angrily: "Mr. Lu, what do you mean?"

But Lu Feng's expression remained calm: "Am I wrong?"

Xu Yangtian didn't expect him to have this reaction. He was stunned for a moment, but the anger in his heart also dissipated a lot.

Lu Feng's words were unpleasant to hear, but they were the truth.

Sheinside's current business model is to rely on employees to go to the Shisanhang Clothing Wholesale Market to get goods, come back to find models to take photos, and then post the photos on the website. When someone places an order, they will pick up the goods and ship them.

To put it bluntly, this is acting as a middleman.

However, Xu Yangtian's ambitions certainly go beyond this. He is ambitious to make the company bigger and stronger.

Being annoyed was just an instinctive reaction, and he soon realized that Lu Feng was asking him about his future business model.

When it comes to business, it is always a big taboo for businessmen to lose control of their temper.

After calming down, Xu Yangtian said seriously: "Our current model of agency sales is definitely only temporary. Information exchange is very developed now, and the information gap will soon be eliminated, just like when I was an agency salesman for wedding dresses before.

High profits are only temporary. We will definitely develop in the direction of having our own supply chain in the future.

At present, our scale is still relatively small, and using this type of agency sales method is relatively healthy and also more friendly to the company's cash flow.

However, if the order volume increases significantly in the future, reaching more than 10 million per month, we will definitely be involved in the supply chain.”

Having said that, Xu Yangtian's emotions have completely calmed down.

Listening to his explanation, Lu Feng nodded and asked, "What do you plan to do in terms of product selection? After the number of SKUs increases, have you calculated how much it will cost to stock the inventory?"

When Xu Yangtian heard Lu Feng's question, his expression changed slightly again.

An expert can tell whether something is there or not with just one glance. The fact that Lu Feng can smell this problem shows that he is not an amateur.

At least I have a deep understanding of the market.

SKU is a professional term in the apparel industry, which is the abbreviation of Stock Keeping Unit, meaning inventory keeping unit.

In clothing sales, SKU is a very important parameter.

It refers to a specific combination of clothing style, color, size and material, each of which has a unique SKU.

Through SKU, Changji can manage and track current inventory to carry out refined management and ensure sufficient stock so as to replenish it in time.

In the clothing industry, stocking inventory is the biggest source of pressure.

Even for a single item of clothing, sufficient inventory needs to be prepared based on gender, size, and color.

Therefore, in order to sell a single product, it is often necessary to prepare dozens or even hundreds of the same product to meet market demand.

Moreover, among these stocks, only a small number of popular products are easy to sell, and most of the rest are difficult to sell. They need to be sold through promotions, or even at a loss.

This is just the pressure from the manufacturers. Sheinside's e-commerce consignment model sells at least tens of thousands of products.

If we consider factors such as brand, style, gender, size, color, etc., there will be hundreds of thousands of SKUs. Sheinside's current order volume is relatively small, so it only needs to purchase and resell based on existing products.

However, without a supply chain, it is easy to go to the market to purchase but not be able to buy the goods.

Because the product cannot be sold, the manufacturer has stopped making it.

Even if Sheinside wanted to find a manufacturer to produce the products, it would be impossible for the manufacturer to start production just for such a small order quantity, so a contradiction arose.

This is the main business difficulty that is currently bothering Xu Yangtian.

This is also the main reason why he plans to do supply chain in the future.

However, in front of Lu Feng, he would definitely not admit that he could not solve this problem for the time being.

On the contrary, he said seriously: "I have already discussed the issue of stocking with the supply chain companies. I can give subsidies for small orders first, and then make up the orders based on market feedback.

This way, the initial investment is small and inventory can be effectively reduced. As long as the supply chain is established, this problem can be easily solved."

His answer was flawless, but he couldn't fool Lu Feng.

"Am I right to understand that you want to compete with Zara's small-order quick-return model?"

Lu Feng continued to ask: "Zara has nearly 84 stores in major cities around the world. The customer demand and sales data collected every day can be directly transmitted to the data center at Zara headquarters for trend analysis.

These 2,000 stores are also a reservoir for Zara's stocking funds. How do you solve the problem of stocking funds? Even if you do small orders, the pressure is not light, right? "

Zara is a Spanish clothing retail brand and a leading representative of the fast fashion clothing model.

Its business model is to keep up with the changing trends, rely on an efficient supply chain system, and strive to shorten the product cycle.

Currently, it only takes Zara 14 days to develop a product, from demand research, creativity, planning, design, sampling, production, logistics to shelf launch.

During production, Zara will first quickly produce small batches of clothes locally in Spain, with a minimum of 500 pieces per order.

Once these clothes are produced, Zara will quickly put them into the market for testing.

If the product doesn’t sell well, it will be taken off the shelves directly. If it sells well, additional orders will be placed quickly. This is what is called making a hot-selling product.

This is what Xu Yangtian said: do small orders first, and then make up orders based on market feedback. This is also the winning formula for fast fashion brands.
Rapid listing and removal of products can greatly reduce risks, improve product effectiveness and marketability, and thus expand the market size.

Compared with traditional brands that develop new products 12 months or even longer in advance, this is a unique advantage of fast fashion brands in terms of speed.

Xu Yangtian obviously wants to benchmark Sheinside and Zara, establish his own efficient supply chain, and capture the market.

But Sheinside is engaged in online sales, and it is also a cross-border e-commerce company, and it has no offline stores.

Once the supply chain is established, Sheinside will have to bear the pressure of stocking the goods by itself.

Even if it is a small order, as long as the number of SKUs increases, it will be a huge expense and will take up a considerable amount of cash flow. This is a problem that cannot be avoided.

Therefore, when Xu Yangtian heard Lu Feng point out his purpose of benchmarking against Zara in one sentence and then explained the small-order quick-response model in two sentences, he was suddenly speechless and didn't know how to answer.

Seeing this, Lu Feng did not ask him any more questions, but gave him a conclusion in a deep voice: "So, if you continue to do this, you will only become a distribution company that focuses on traffic, and the procurement costs will become very high."

Xu Yangtian's forehead was already covered with sweat, but he still calmed himself down and argued, "There's nothing we can do about it. This is how the clothing industry is. We have to keep the inventory in stock. No one can solve this problem."

Hearing him say this, Lu Feng smiled: "Who said it can't be solved? I can solve it."

(End of this chapter)