Those Years When I Was Forced to Top the Forbes List

Chapter 91 A Great Wind Rises

The first batch of project payments amounted to over 32 yuan.

The measuring tape used by Chen Xuebing and his team was a 0.9 scale, and it wasn't too tight when they pulled it.

It's only a little over an ounce short, so it's not considered too harsh.

However, as I said before, the overall figure cannot exceed the limit too much, otherwise it will alert the auditors and cause big trouble.

—I'll have to prepare another red envelope.

Of course, I didn't receive 320,000; I only prepaid 80% of the progress payment, which was 256,000.

In addition, labor and materials must be taxed and invoiced, with taxes levied by both the national and local governments. Currently, there is no VAT reform, so the tax rate in the engineering industry is not high. The national tax (business tax) is around 3%, and there are also local taxes (income tax, urban maintenance and construction tax, education surcharge, and stamp duty), which are about 2%.

When working on government projects, there's not much to be done about taxes, since there are clients (water construction companies) and major clients (water investment and local governments) watching over things. The only thing you can do is compile a list of employees' salaries exempt from corporate income tax and deduct a portion at the end of the year.

The tax office was packed with people, and it happened to be the weekend, so it took five days to finally get the paperwork for the first phase of the project payment done.

During this period, a meeting was held with the seven pipeline construction units on the project, and a three-kilometer section was ultimately allocated to them, with a project volume of 156 million yuan. The allocation was based on their ability to advance funds. Chen Xuebing only charged a three-point management fee, but required that the management fee be paid immediately. In addition, the project must be constructed in strict accordance with the contract requirements.

Everyone was overjoyed.

Only four points?

This project is more profitable than their pipeline construction, and they thought Chen Xuebing would take at least seven or eight percent of the profit!

It was this pipeline project; they used their connections to get the job, and the money they spent was more than four percent!
Although the locations were agreed upon in advance, everyone was working on the same water project, so there was still a foundation of trust.

The final settlement for the sewage treatment plant project won't be completed until at least the end of the year. It's a project worth over 2 million yuan, and they've already set aside 400,000 to 500,000 yuan in settlement payments. If Chen Xuebing defaults on the payment, they can just go after the water construction company.

The seven people quickly pooled together 62400 yuan according to their share and gave it to Chen Xuebing, praising General Manager Chen for his generosity.

Seeing their expressions of having gotten a great deal, Chen Xuebing chuckled and reminded them again: "Strictly follow the contract requirements for construction."

They all patted their chests and assured me that even with a unit price of 52 and a 4% markup, it would still be 50 per kilometer, so they definitely wouldn't cut corners!
Chen Xuebing didn't offer any more reminders. After receiving the money, he signed subcontracting contracts with seven people, specifying the technical details. If they dared to take any chances, they would find out when he took action.

He allocated three kilometers of this road because he now has something more profitable. The current project is too small, and he only wants to build a reputation. By allocating a small portion, he can also speed up the construction process.

In addition, he can use this 60,000 yuan right now.

……

In mid-April, the first phase of the project payment was received.

Chen Xuebing gave Tan Maoshui 100,000 yuan to settle part of the debt owed to the construction site, leaving 30,000 yuan as a reserve for daily expenses.

266,000, leaving 156,000.

Chen Xuebing had over 4 yuan on him, plus the remaining 62400 yuan, giving him a total of 26 yuan.

Lu Yiwen and Huo Xiaowen's sales have expanded rapidly recently, so no money has been transferred in.

The development of Huaqiangbei was even faster than he had imagined. After two months of fermentation after the Spring Festival, most of the factories that opened after the Spring Festival had started production, and the price of mobile phones there continued to drop to rock bottom.

How cold should it be?
Huo Xiaowen called to say that dozens of mobile phone manufacturers come to him every day to place orders, and some even give him red envelopes when they hear that he is not the owner of the counter, hoping to get priority in ordering goods.

Those manufacturers who used to work with them are now coming to their counter every day, giving them a few packs of cigarettes, sometimes even a whole carton, as if they're afraid of cutting off that sales channel.

The competition from rivals is outrageous.

The counters are also struggling. The daily sales volume is not proportional to the amount of goods coming in. For the past week, the stall owners' "committee" has been holding a meeting before closing every day, and the result of the meeting is to lower the price.

Collectively, purchase prices were lowered, and sales prices were also adjusted.

For example, the counterfeit versions of Motorola V3 and Nokia 6600, which sold exceptionally well before, have seen their purchase price drop by nearly 30%-40% recently, and their selling price has also decreased by 20-30%. The higher the price, the more drastic the price reduction. Currently, it is very difficult to find mobile phones priced above 1500 yuan in Huaqiangbei.

This is outrageous. When Chen Xuebing was buying the phones last November, half of them cost over 1500 yuan, and there were countless others costing two or three thousand yuan.

This is still the price of pirated goods.

If it's a brand new grey market phone or a genuine second-hand phone, many multi-screen models cost over three thousand.

Now, prices are plummeting across the board. I heard that genuine products will soon undergo an industry-wide price adjustment. However, genuine products can't be reduced this drastically, as brands always have to consider the feelings of their long-term customers.

The purely self-developed coyote machine is doomed.

During the research and development and production phase, everyone was ambitious. In the past, we were always held back by the software and hardware of foreign machines. We couldn't develop new features like cameras, MP3 players, game downloaders, and web browsing, even if we wanted to.

Now, with MediaTek's chips, they can solve software and hardware problems and adapt to various multimedia internet functions. All the taboos have been lifted for manufacturers.

I've never felt this good before.

Manufacturers all want to price their products like foreign brands, and some have even found OEM channels so they can openly sell their products on store shelves. They want to be like Huo Yuanjia, outperforming foreign brands in terms of configuration and making a name for themselves, so they add all sorts of features, driving up costs higher and higher.

As a result, a hailstorm suddenly fell from the sky.

There's no official anchor price for these coyote machines on the market. Everyone's finding that nobody wants their stuff, and with technology iterating so fast, they're all afraid it'll just rot in the ground. Some people quote 1500 today and nobody wants it, and after hitting a wall all day, they just grit their teeth and ask if they want it for 1000 at cost price the next day.

With prices dropping every day, even at these low prices, stall owners dare not buy in large quantities for fear of being stuck with unsold goods. They have to sign a return agreement before accepting the goods and also have to hold a sum of money in their hands.

In the stock market, the current situation in Huaqiangbei can be accurately described as a stampede.

Although Huo Xiaowen, Gao Shu, and Qi Guangming had all received instructions from Chen Xuebing in advance that the mobile phone price would be significantly reduced, they did not expect it to drop to this extent. In the past two days, they have been calling President Chen one after another to ask for his approval, suggesting that they should think twice before opening a factory.

Let alone production, we can't even finish receiving the current stock; we simply can't.

Chen Xuebing was somewhat alarmed upon hearing this.

Fortunately, he had an accurate assessment of the future development of Huaqiangbei. After Huo Xiaowen investigated the purchase price of various popular mobile phones, the daily shipment volume of the stalls, and the approximate shipment volume of other stalls, he conducted a calm analysis.

Looking out over the four mobile phone sales areas, with 800 stalls, the total daily shipments currently do not exceed 20,000 units.

Feiyang Market hasn't even opened yet, but there's already a huge flow of customers here. Even if you look outside and there are still 20,000 units being shipped, the entire Huaqiangbei market only sells 1.2 million units a month. And that's only because of this wave of price cuts, which has led to some additional sales.

Based on this calculation, that's only 1200 million units per year?

Too far.

Chen Xuebing made a positive judgment, but still patiently waited for another three days.

The pace of price reductions has slowed.

The manufacturers who came to lower prices a few days ago have all gone out to set up stalls and sell their products in nearby cities.

Battle reports may lie, but the battle lines don't. Prices must have already approached the cost line for some factories.

Chen Xuebing checked the purchase cost sheet and found that the price reduction trend had been going on for almost half a month, both openly and secretly.

So on April 18th, Chen Xuebing issued the order.

"Collect, start collecting now!"

“You select some multimedia phones equipped with MediaTek chips, both pirated and cheap models are acceptable. You need to deposit 80% to 90% of the purchase price, and those who deposit the entire price will be given priority! The repayment period is three months, but we can pay in advance for the phones we sell. We promise no returns!”

“I’ll transfer 25 to you right away. You have 15 there. Use it all to purchase goods. Lu Yiwen has 5 in cash and 12 in outstanding payments. I’ll let him get all the money and transfer it to you via Alipay immediately. Alipay won’t keep any reserves for a while. We’ll just sell the inventory you’ve acquired!”

Huo Xiaowen took a deep breath.

"Are you sure? Given the current situation, if we promise no returns, people will sell to us even if it takes six months to get paid, let alone three months. But if we take back the goods, we might end up with millions of dollars worth of goods stuck in our hands. We'll have to sell them at our own risk for six months."

Chen Xuebing chuckled upon hearing this: "Several million? That's too little. I thought it would be tens of millions. With such a large sales network backing you up, you're really that petty?"

"Holy crap!" Huo Xiaowen couldn't help but provoke him: "Do you believe I can build you a house with my phone within a month?!"

Chen Xuebing's heart was pounding.

I originally thought that with 500,000 to 600,000 yuan in cash, I could at most hold 3 million yuan worth of goods as collateral.

Given the current market conditions, it's probably even higher.

He was somewhat excited, but also a little flustered.

But when he spoke, he remained calm and delivered a sarcastic remark:
"Heh, don't brag. If you don't have ten million in inventory, I'm opening this stall for nothing."

"You fucking... fine, fine, you just wait and see!"

……

Life is full of surprises.

The market suddenly boomed, and the money vanished just as suddenly; all the original plans had to be cancelled.

I didn't go to the business recruitment event for Feiyang's stall.

The money for the prefabrication plant hadn't been paid, and the construction of the mobile phone factory came to a standstill.

Of the 260,000 yuan, 250,000 yuan was spent, leaving Mr. Chen with only 10,000 yuan, seemingly returning to the starting point of his entrepreneurial journey.

But nowadays, 10,000 yuan is no longer considered start-up capital.

Ten thousand yuan won't cost you anything, but it can buy you a comfortable life during your last month and a half of secluded cultivation.

Chen Xuebing's sarcastic voice echoed every day in the Chen family courtyard of Furong Village.

"Boss lady! I want to eat rabbit!"

"God of Wealth! We don't have any rabbits here! We only have fish!"

"I don't care! You made three thousand yuan off that tricycle of yours, didn't you? Still want to haul sand? Go to town and get me a rabbit to stir-fry. I'll pay double whatever it costs!"

"Okay! Okay! I'll get you a whole rabbit!"

……

"Boss lady! I want barbecue tonight! Get me a leg of lamb!"

"I really don't know how to do this!"

"Peach Blossom Villa in Jiangping has them. Go buy them for me and ask him to give me a 8% discount!"

"...Okay, okay! Can my child eat with me since I bought it?"

"Of course! Let's all have dinner together tonight, and invite your boss, Mr. Chen, over for some beer!"

"Great! Mr. Chen is so agreeable!"

……

During the days of preparing for the college entrance examination, everyone else was eating nutritious meals and drinking milk before bed.

General Manager Chen, however, would stay home all day studying without eating, and before finishing work in the afternoon, he would go to the construction site to check on the progress. In the evening, he would organize a meeting with the site managers while indulging in a feast of fish, meat, beer, and barbecue.

Who says you can't have your cake and eat it too?

Youth is about taking risks and making a fuss.

We must pursue both culture and making money, and we must excel at both!
……

Meanwhile, thousands of miles away in Shenzhen, strong winds have already picked up.

(End of this chapter)