Reborn in 08, a heretical cultivator starting a business

Chapter 173 Resource Strategic Integration, Entrepreneurship Competition Awards Ceremony!
Upon hearing this, everyone's expressions changed repeatedly.

I know in my heart that times have changed.

From now on, Little Duck will no longer be a state-owned enterprise, but a private enterprise, Future Smart Home!

The old ways of state-owned enterprises are inefficient and won't work anymore.

There's no going back to just drifting through life.

Wang Junshan understood clearly that the senior management bore a great deal of responsibility for Little Duck washing machines reaching this stage, and employee efficiency was also an issue.

Wang Junshan was well aware of the situation regarding state-owned enterprises.

In the same 300-acre industrial park, a private enterprise can produce 500 million washing machines annually.

At its peak, the Little Duck only sold 150 million units.

That's just how state-owned enterprises are—typically high welfare but low efficiency.

If Wang Junshan doesn't implement sweeping reforms, no matter how much money he invests, employee efficiency won't improve and management will become corrupt, and Little Duck washing machines won't be able to take off.

When Wang Junshan took over this mess, he had already decided to make drastic changes!

Severe cases require strong medicine!

Therefore, Wang Junshan directly instructed Tang Jinghe to arrange a team to take over the Little Duck washing machine business.

Although the original factory director, Li Ming, remained the factory director, Tang Jinghe directly appointed two deputy factory directors.

Zou Minze focuses on market analysis and performance evaluation.

Liao Junjie is in charge of research and development and production.

Key positions such as finance, human resources, legal affairs, and marketing are also being taken over by people from Future Technology.

Only a few members of the management team, including Li Ming, remained, and they were all sidelined.

They didn't give the original management team any chance to intervene.

To put it simply, if you can do it, do it; if not, leave.

Thinking about being high and mighty and just coasting through life is unrealistic.

Even for those management members who are willing to stay, their performance will be evaluated before deciding whether to promote them further!
After some hesitation, most chose to stay, re-sign contracts, and rejoin Future Smart Home.

There's no way to get back to the parent company.

Those who truly have connections have already moved to other departments. Why would they go months without receiving their salary at Little Duck Washing Machine?
If you choose to buy out your years of service, you will be considered unemployed.

It's better to stay!
After re-processing the employment agreement, Wang Junshan convened another high-level meeting:

"The three most important things right now are!"

"First, we will fully resume work and production, and all production lines will be fully operational."

Xiaoya Factory Manager Li Ming's expression changed drastically: "Chairman, the factory still has more than 5 twin-tub semi-automatic washing machines, more than 2 fully automatic washing machines, and more than 5000 drum washing machines in stock."

Wang Junshan nodded: "I know, but not producing will only lead to continued losses, while production will generate profits. As for how to sell, I'll handle that."

"That's the second thing: sales!"

“Right now, Little Duck has been dragged down in recent years. Many distributors have quit, and most of the stores have closed down. It will take a lot of time to reopen.”

Everyone nodded in agreement; this was the biggest problem.

At its peak, there were Duckling specialty stores all over the country, but now 9% of them have closed down.

"Therefore, we need to pursue the sales of Little Duck through multiple channels."

Wang Junshan asked, "What is the cost and selling price of a twin-tub washing machine now?"

Li Ming quickly replied, "Currently, there are three twin-cylinder production lines, but they are all relatively outdated and can only produce the basic 6-kilogram model."

"But because production is low and raw material costs are high, the total cost of production is 370. Transportation costs are also high, costing 30 yuan per unit to deliver to the distributor's warehouse. The factory price is 500, with a profit of 100. The first-level distributor's selling price is 600, and the retail price is around 800."

"Little Swan has high production volume, with a factory cost of 330. The shipping cost is only 15 yuan when delivered to the distributor's warehouse by Midea's Anzhi Logistics. The factory price is 550 yuan, the first-level agent's selling price is 650 yuan, and the retail price is 900 yuan."

"Haier's 6kg twin-cylinder engine has a factory cost of 380 yuan, RRS Logistics delivers it to the distributor's warehouse for 15 yuan, bringing the factory price to 600 yuan. The first-tier distributor's selling price is 800 yuan, and the retail price is 1100 yuan!"

Wang Junshan fell into deep thought.

Both logistics and production costs are economies of scale.

With increased production and the support of Midea's distribution channels this year, Little Swan has achieved higher specifications, resulting in a 40% lower ex-factory cost.

However, the production and sales of ducklings are low, so even with the most basic functions, the cost cannot be low.

The raw materials are 10%-20% more expensive than those of our major customers, such as Haier and Midea!

Logistics costs have doubled!
Therefore, ducklings have higher costs and lower profits.

Adding in the commissions from distributors and retailers, Little Duck only earns 100 yuan from an 800 yuan washing machine.

There's no way around it; e-commerce isn't developed these days, so distributors aren't making as much money, and nobody wants to do it.

Wang Junshan originally planned to lower the supply price to increase the profits of distributors, making it profitable for them to purchase large quantities of goods.

Unexpectedly, Little Duck was in such a bad situation that the profit from a single twin-tub washing machine was only 100 yuan, leaving no profit for the distributors.

"Since there's no room for price reductions, let's maintain our current offline sales while focusing on online sales!"

Wang Junshan made a decision: "Little Duck washing machines will be launched on Vipshop, and a brand special sale will be held on the stock of twin-tub models."

"Cost is 370, RRS Logistics warehousing, delivery and installation is 50, Vipshop commission is 49, discount promotion starts at 699!"

Li Ming's eyes lit up: "This way, by eliminating the middleman's markup, there's still a profit of 230, which is 2.3 times that of the distributor channel!"

Wang Junshan waved his hand: "It's not just 230. Once the production capacity is full, the raw materials will be procured by the group, and the purchase price will be reduced. The ex-factory cost will be reduced from 370 to 330, and the profit will be 270!"

"Next, the group will consolidate and integrate the steel needed for Little Duck washing machines and other projects such as the Jeju International Warehouse. Future Technology Group will then conduct centralized procurement to lower prices."

Everyone's eyes lit up:
"This will really reduce the cost significantly."

"Yes, our biggest concern right now is low production, low inventory, and inability to lower prices."

"But if it's a group-wide procurement, then there's no problem."

"Even the lowest-end twin-cylinder engines have a profit margin of 270 yuan, so e-commerce has great potential!"

Wang Junshan looked at Tang Zhi: "President Tang, you take the lead in the specific operations and launch a special sale on Little Duck washing machines as soon as possible to clear out all the existing inventory!"

"We also have fully automatic top-loading washing machines and front-loading washing machines available on Vipshop, at around 9% off the price we sell offline!"

"No problem. Little Duck washing machines are already 30% cheaper than Haier ones, and with the 10% discount, they're 40% cheaper. Sales are sure to be good!"

Both are dual-cylinder 6kg engines, the Haier 1100-1200, while the Little Duck only costs 699!

Many consumers will be tempted.

Especially for those with limited budgets or renting, they won't buy a Haier appliance costing thousands of yuan.

Buying the Little Duck online for 699 yuan is a better choice as it's an established brand.

Wang Junshan continued, "Little Duck also needs to work hard on its own, increase revenue and reduce expenditure, and find ways to make progress. Don't just wait for the group to feed you."

"Vipshop has taken care of the online channels. What are your thoughts on the offline channels? Marketing manager, please share."

"Chairman, I plan to actively contact the distributors who have previously ceased cooperation and invite them to continue the partnership, offering them some compensation to restart the cooperation."

How much compensation will be given for restarting?

"A 20 yuan discount is given at the factory price, which is 550 yuan for other dealers and 530 yuan for those who are restarting."

"How much of this discount are you offering? One hundred units, or two hundred units? Or for one month? Two months?"

"This..." The other party fell silent.

"Change it to a purchase incentive program. The more you buy, the more rebates you get."

"All distributors will receive a rebate based on their sales volume, on top of the original purchase price!"

“每季度进货30万元，返利1%。进货50万元，返利2%。”    “进货80万元，返利3%。进货100万元，返利4%！”

"Purchase goods worth 150 million yuan and receive a 6% rebate! Purchase goods worth 200 million yuan and receive an 8% rebate!"

"10% rebate for 300 million or more!"

"The more you buy, the more rebates you get, with rebates issued every quarter!"

"New distributors receive a discount in the first year, and an additional 0.5% rebate is given if the target is achieved."

"Good!" Li Ming knew that Wang Junshan was using incentives to increase the volume of goods purchased and the sales volume.

As the scale expands and costs decrease, even with a 10% rebate, you can earn more!
Although it was far less successful than online, there was no other way; in 2008, offline sales were king.

Wang Junshan continued, "We also need to actively expand new offline channels."

"For example, shopping mall channels. We can sign counter agreements with malls like Sanlian in Shandong Province, RT-Mart, and Wuxing in Jiangsu Province, exchanging 15%-20% of the sales rebate for prominent display positions!"

"The marketing department shouldn't be idle; everyone should go out and develop channels and expand the market. Future income will be directly linked to the results of channel development."

"The HR department will develop new performance evaluations. The number of channels and distributors you develop, and the targets achieved by the channels or regions you are responsible for, will directly determine your income!"

"From now on, those who fail to achieve performance targets will only receive the minimum basic salary of 600 yuan."

"Marketing department employees who achieve good results can have a base salary of 600, and bonuses of 500, 1000, 1500, 2000, or even 3000 or 4000."

"The better the performance, the higher the performance bonus."

"The marketing department can hire more people. Anyone with good skills, who can get things done, and who can negotiate is welcome."

Upon hearing this, everyone's expression changed, and they finally understood Wang Junshan's plan.

Truly, all results speak for themselves!
Income and performance are directly linked.

Currently, the basic salary of Little Duck Group is 800-1000, plus overtime pay for production line workers and performance bonuses for the marketing department, which can bring in 1100-1500.

This is considered a normal level for 2008.

The total salary for ordinary municipal civil servants in Jeju City is currently only around 1800-2200.

But when Wang Junshan made that change, things were different.

Marketing department employees earn as little as 600 yuan, and even basic necessities like food and clothing are a problem.

But as long as you achieve results, 2600, 3600, or 4600 are all acceptable!
"This includes all middle and senior managers, whose salaries will also be adjusted based on performance. Those who achieve results will have their salaries doubled, tripled, or quadrupled. Those who don't achieve results will receive their basic salary."

"Promotions and raises depend on ability. The capable rise, the mediocre fall."

"We are a private enterprise, not a state-owned enterprise, and we don't rely on the same old system for sustenance."

"Of course, if you have any good ideas, you can communicate directly with Director Li, the two deputy directors from headquarters, or even General Manager Tang and me."

"As long as it's a good idea, feasible, and can generate revenue and increase profits, we will implement it and count it as part of your performance!"

Upon hearing this, everyone in the room, from middle to senior management, had their own ideas.

In the past, upward mobility channels were blocked, but now things are different; they have all been opened up.

There are opportunities everywhere.

As long as you have the ability and ideas, you might just achieve great success.

Those higher-ups who still wanted to coast along were dumbfounded, feeling that their future was bleak.

"The existing production lines are running at full capacity, so there's no need to worry about not being able to sell them. Raw materials will be procured centrally."

How much cash is left in the account?

"A total of 500 million, to be kept for next month's salary and social security payments."

“Salaries are not a problem. We’ll use the 500 million to buy raw materials and start production at full speed. We’ll settle accounts with Vipshop as soon as possible after the products are sold.”

"With both online and offline channels working together, you don't need to worry about sales. Vipshop will back you up."

"Only when it's running can we make money. Let alone making 100 or 150 per unit, even if it's only 50, 100 million units a year would be 5000 million in profit."

"Moreover, fully automatic washing machines and front-loading washing machines have higher profit margins, with each unit costing several hundred, or even more!"

"Both of these washing machines should be produced at full speed."

Everyone nodded.

Wang Junshan spoke again:
"Finally, Future Technology will invest 100 million to upgrade its production line in all aspects. It will also invest 50 million in research and development and the introduction of advanced technologies!"

"R&D department, develop a solution as soon as possible."

"Yes!"

After the meeting, all parties acted swiftly.

It's obvious that the atmosphere at Little Duck has changed; the previous state-owned enterprise laziness is gone.

Instead, they began to pursue efficiency in all aspects.

The marketing staff were chatting before, saying they were just coasting along and wondering if they'd even get paid this month.

Now we're talking about where to expand into new channels, which distributors to visit today, and whether we can earn two or three thousand next month if we do well.
Even the management team that had previously been coasting along are now working hard, discussing business, and looking for a way out.

Wang Junshan was very satisfied with this.

This is what a company should be like.

If Little Ducklings had been like this before, it probably would have grown into a big company much earlier.

Tang Zhi was even more efficient, completing the connection in just two days.

They also arranged for RRS Logistics to distribute the Little Duck washing machines to warehouses across the country, in preparation for their launch on Vipshop.

Haier has strong objections to this:
"President Liang, Chairman Wang has actually acquired Little Duck, launched a washing machine business, and is even using RRS's warehousing and logistics. Will this affect our Haier washing machines?"

Liang Hai laughed: "Affect Haier? Not a big problem."

"People who buy Haier washing machines now don't even look at the duck."

The subordinate suddenly realized: "That's right, Little Duck is just a second-tier brand now, and its user base doesn't overlap at all with that of Haier washing machines."

Liang Hai nodded: "Moreover, Chairman Wang's acquisition of Little Duck is a good thing. The one that should be most anxious is Midea."

"Midea is in a hurry?" The subordinate was confused, then suddenly realized:

"That's right. Haier only makes high-end products, and even the cheapest twin-cylinder is over a thousand yuan. But the low-end market of seven or eight hundred yuan is completely blank. It has been eaten up by Midea's Little Swan and Rongshida. Midea has made all the money."

"Now that Chairman Wang has acquired Little Duck, it's a good opportunity to impact Midea's low-end market. So, it's actually a good thing for us!"

"Of course it's a good thing. It can suppress our number one rival Midea and also generate revenue for Ririshun!"

"For each sale of this low-end washing machine, Chairman Wang only earns 100 yuan. Haier, on the other hand, only provides RRS delivery, warehousing, and installation services, and we can still earn 50 yuan. This not only helps to reduce the fixed asset investment costs of RRS Logistics, but also allows us to make a net profit of 25 yuan per sale."

"More importantly, Chairman Wang is also a major shareholder of Ririshun and the owner of Vipshop. Only through good cooperation can Haier fully exert its strength online."

"I see. Then we will cooperate fully with Xiaoya and Vipshop."

Wang Junshan, who was on his way back to Binhai City, received a call from Tang Zhi:
"Boss, everything's all arranged. The washing machines in stock are all on their way to the various RRS warehouses. We're just waiting for the full launch on Vipshop on December 1st, for brand sales!"

"But it feels like something's missing, like marketing hype."

"Acquiring Little Duck and reviving a national brand is worth promoting, as it will lead to better sales."

Wang Junshan laughed: "Large-scale free publicity is all prepared, there's no need to spend the money."

"Free publicity?" Tang Zhi was dumbfounded: "Is there really such a good thing?"

"Guess why I went back to Binhai City?"

"Binhai City...Entrepreneurship Competition Awards Ceremony?" Tang Zhi suddenly realized, "This is truly the best form of publicity!"

(End of this chapter)