Some people refer to a comprehensive trading company as a modernized East India Company.
Like the East India Companies that actually managed colonies, Japan's mega trading companies have openly created economic development zones (effectively colonies) in countries like the Philippines.
They engage in intermediary trading, selling cheaply produced goods from the locals to developed countries, or peddling advanced technological products embedded with high-end techniques from developed countries at inflated prices in other nations.
In short, they are the embodiment of greed, doing anything that can make money.
“I’ve never heard of that term. How does this comprehensive trading company operate?”
“We delegate production to other guilds or regions and simply sell the products they create.”
Even in the Toscana Empire, which blends aspects of the medieval, Renaissance, and early modern eras, the concept of outsourcing production and handling sales isn’t entirely foreign.
However, most guilds that exceed a certain scale manage both production and sales themselves.
This method maximizes profits in this era.
‘While it may be difficult for guilds in large cities like Florence, merchant-level companies can acquire small city guilds and use them like their own factories.’
While guild masters and executives select their own members, those who make massive investments can impose unbreakable shackles on them.
Seeing this concept emerge indicates that the lifespan of guilds in this era is nearing its end.
Kris nodded as she listened to me.
“Even if we invest all our current capital, we cannot create a smithy or factory that can meet the supply demands in two months. So, it would be wise to choose to fill the orders even if it means giving up some profit for now.”
As more middlemen get involved, the profits for sellers invariably decrease, and consumers have no choice but to pay higher prices.
Thus, whether it’s crops, machinery, or any other goods, buying directly from the producer is always cheaper.
This law is a timeless truth.
‘Though in Korea, there are times when buying from a large corporation can be cheaper than purchasing directly from a farmer.’
Just thinking logically, it makes sense.
When sharing a pie, if it’s divided between two people, each gets a larger share than if it’s shared among three.
“Still, in the future, I believe it would be good to save up money to establish facilities for producing the items for military supply, then increase profits.”
This is the conventional thought among merchants of this era.
While I don’t disagree with Kris’s statement, wielding the weapons unique to a comprehensive trading company would be the most beneficial for me right now.
“Kris, why are you so fixated on the idea that we need to build a factory?”
Upon hearing my words, Kris tilted her head.
“Because handling everything from production to distribution and sales allows us to maximize profits.”
“That’s true. But let’s change our way of thinking here.”
I clenched my fist and raised my index finger.
“Let’s say the total amount of our transactions is 100, and we increase the profit margin from 30% to 40%. Would that be more profitable?”
Transportation costs can be high and fraught with risks, which means when a pig from a rural village crosses over to a large city, the price can jump by 50%.
Yet, even so, the profit margin often isn’t as high as expected.
‘Unless it’s something like seaweed or steel, where you’re deceiving the unsuspecting buyer, it’s not easy.’
“Or would it be more beneficial to increase the transaction amount to 1,000 or 10,000 while keeping the profit margin at 30%? Which do you think would be more profitable?”
“Of course, it would be increasing the transaction scale.”
“And we still have plenty of room to expand. The military supplies that the Emperor supervises.”
In our Empire, there are a total of 35 divisions.
Out of these, I have two, the Pereira gang used to have ten, and the remaining 23 are divided among other merchants.
Given my stature, I’m no more than a tuna trying to touch the bowls of whale-sized merchants.
If I were to challenge them, I wouldn’t disappear without a trace, but I would surely be crushed under their insurmountable pressure.
‘Or, when the Emperor is on the verge of death, they might save me and turn me into a noble under their thumb.’
“You’re suggesting that we bring in guilds to meet production demands and supply them as middlemen?”
I’m not sure what expression I’m wearing right now, but a smile crept onto my lips involuntarily.
Surely, I must be wearing a wicked grin, but I have no intention of doing anything wrong.
I aim to establish a system where everyone is satisfied, and I can gain the most profit.
“Currently, the industry in the Toscana Empire is dominated by guilds. To elaborate, guilds based in small towns have the skills and capabilities, yet they can only sell within their towns unless they sell through a trading company.”
If I were to speak ill of the guilds, I would call them market thugs dominated by artisans.
If someone infringes on their territory, they could easily summon their lord or noble to put the offender on trial and execute them.
It’s also quite common for them to drown intruders in the river.
That’s why I wouldn’t have even considered fighting the Florence blacksmith guild if it weren’t for the backing of the Duke of Visconti.
“But if I play the role of a middleman and provide them the opportunity to supply the military in bulk, how grateful they will be.”
“Even the artisans of a small guild wouldn’t want to miss out on making money.”
Unless they were like General Choi Young, who regarded gold as a stone, or Admiral Yi Sun-sin, who was considered insane for his integrity at that time.
If I tell them there’s a way to make money, everyone will be intrigued.
To put it bluntly, the reason people work hard is to earn money.
‘With money, you can feed your family, buy a house, and prepare for the future.’
“It would be nice to politely request a slightly lower price in exchange for the opportunity to make bulk deliveries.”
One of the main reasons prices are high in 21st-century Korea is because middlemen take excessively large margins.
In our Toscana Empire, or rather anywhere in the Albanian continent, half the price of goods is due to guilds preventing free market price competition among regions and cities.
So it would be feasible to lower the procurement prices by 40% compared to the market price.
“However, if we lower the selling price just because we buy cheaply, other trading companies, including the Benaldi Guild, will become dissatisfied. We need to maintain the current selling levels precisely.”
By sticking to the basic formula of making money, we can avoid ruffling the feathers of other merchants; how great is that?
“I want to save on transportation costs as much as possible, so it would be good to persuade the guilds in the small towns near the military bases. What do you think, Kris?”
Upon hearing my words, Kris’s eyes sparkled.
“Young Master, you are truly remarkable. Indeed, while it’s important to increase profit margins, if there’s an opportunity to expand the market, it’s best to do that first. With just a little organization of the details, we could implement this as our guild’s policy right away.”
“Chloe told me to rest today, so I plan to have lunch and then take a good break. Do you think my absence will hinder the work?”
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“The remaining tasks involve practical adjustments—entertaining the guild masters of the small towns and finding suppliers. Aside from meetings with the guild masters, you won’t have any direct duties, so you can take a few days off. The butler and administrative staff can handle the rest.”
Since Kris isn’t one to offer empty words, it seems I can genuinely afford to take a break now.
“Thank you.”
“Not at all, and Young Master...”
She hesitated for a moment before speaking.
“Actually, Antonio from Cafe Medici has released a new menu, and it’s designed for couples. If you have the time, would you accompany me?”
... I knew that the authority for developing new menus lay with Antonio, but I never thought they’d create a couple’s menu in our Empire.
‘But sales will soar.’
Young nobles will come to eat intimately with their wives, and then come back with their favored maids for a cozy experience.
With so many people likely to repeat that, it would sell like hotcakes.
“I really like the parfait there. And aside from you, there’s no man I’m personally close to.”
There’s no reason not to go with her.
“Once I finalize the agreements with the guild masters and get things sorted out, I’ll accompany you.”
At that, a smile blossomed on Kris’s face.
“Yes, Young Master.”
Then I promised to spend the afternoon and the following day resting with Chloe and headed to my room.
Chloe looked at me and said in a slightly pouty voice,
“It seems Kris is openly targeting you now. But the one who is most loved by you is me.”
“Since today, or rather tomorrow, I cleared my schedule, I’ll love you to the point of making you sick of it.”
Though Chloe is no longer a maiden, upon hearing my words, she lowered her head, perhaps out of embarrassment.
With her face turning as red as a ripe apple, she whispered in a small voice.
“Please love me as much as you want, Young Master...”
After my break, my weight dropped by 1 kg.
With that, I boarded the carriage heading towards the city that would become the base for production outsourcing.