Chapter 705: Industrial Park Plan (2)
Translator: Dragon Boat Translation Editor: Dragon Boat Translation
Seeing that Prince Anyang was puzzled, Lin Xiaoyue continued. “Many large workshops have gathered in the industrial park. People with business acumen can purchase goods at low prices from various workshops through their own channels and sell them to the outside world.”
“They can even take advantage of the special location of the industrial park to open a shop outside the industrial park and sell the goods they got from the workshops at a lower price than the market retail price.
Seeing Prince Anyang frown, Lin Xiaoyue smiled and continued, “Your Highness, don’t think that there’s no profit in between.”.
“Once the industrial park is established, Qingshi Town will become the home of chilies, cabbages, and sweet potatoes. Because the workshop has sufficient raw materials and manpower, when it is in operation, a workshop can even hire thousands of workers.”
“With more workers, the output will increase. In order to facilitate the production schedule, the workshop will only consider selling to large wholesalers and implement a tiered pricing.”
Seeing that Prince Anyang was puzzled again, Lin Xiaoyue continued, “the so-called tiered bidding means that the more you buy, the lower the unit price.”
“For example, for an order of 5,000 cans of chili sauce, the workshop might quote a unit price of 6 wen per can. If we expand this order to 10,000 cans, the workshop’s unit price will become 5 wen.”
“You can see this as a small profit but high turnover model of the workshop.”
Prince Anyang nodded.
“At the same time, because the workshop has a large order volume and high production, the workshop may not accept orders that are less than 5,000 units.”
“However, some merchants might not be able to order at least 5,000 units.”
“At this time, the wholesalers who open stores outside the industrial park can profit from it.”
“For example, the shop only needs 500 cans of chili sauce. The workshop doesn’t sell it. The wholesalers can sell the goods they buy from the workshops in bulk to them at a unit price of 8 or 9 wen.”
“The market retail price of chili sauce might be around 10 wen. This way, both the wholesalers and merchants will benefit.”
“Middleman?” Prince Anyang asked.
“Yes.” Lin Xiaoyue nodded.
“But this way, the wholesalers will have to stock up. If they can’t find so many merchants to place small orders, won’t the extra goods fall into their hands?” Prince Anyang was puzzled.
Lin Xiaoyue smiled.
“It won’t happen.”
“With the opening of the industrial park and its proximity to the dock of Qingshi Town, there will be many businessmen who will come over.”
“These people are the targets of these wholesalers.”
“Also, there will definitely be more than one wholesaler like this. These wholesalers can join forces and go to the workshop to get the goods to share the risk.”
“The workshop even considered that it would be more convenient to cooperate with some powerful wholesalers. They could even give them special treatment and accept their small orders.
“After all, they place orders frequently. If they place a few more orders a month, the total number of orders might not be less than the big ones.”
Prince Anyang nodded, indicating that he understood.
However, his expression was not good. He did not like the behavior of these wholesalers.
Lin Xiaoyue understood Prince Anyang’s thoughts, but she smiled.
“Everything has two sides. Actually, the existence of these wholesalers is more beneficial than harmful to the workshop.”
Prince Anyang was puzzled.
“Let the professionals handle the professional matters. These wholesalers can gather the resources of various workshops and specialize in cooperating with some small businesses. This is their ability.”
“As for the workshops, it is actually very difficult for them to work with small businesses.”
“For example, some small businesses need to change the external packaging, or have special requirements for the boxes.”
“The people in the workshop are too busy to take care of that.”
“As for the wholesalers, they don’t need to produce the goods. After they receive the goods from the workshop, they can take time to process the goods a second time to make the goods meet the requirements of the merchants.
“In fact, if the cost allows, the wholesaler can even help the merchant deliver the goods to their home if they have access to the cargo ships at the dock. To keep these guests.”
“These are things that the workshop can’t do.”
“In other words, if there are no wholesalers, these merchants will directly look for workshops. If they find out that the workshop can’t do this for them, their business might not work..”
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