Chapter 135 – One-time business
The moment Kameda Masao met Feng Yu, he gave him a 90-degrees bow, which Feng Yu readily accepted and returned with an arched hand greeting.
“Mr. Feng, my company, was really sincere, and we will give you 10 USD in licensing fees for every unit of the humidifier. This is already very high. The Japan market is not very big.”
“No, no, no. That not the main point. The important point was that you have to purchase the patent authorization for the same period of the patent and you have to pay all the authorization fees in one go!”
Next year, there will be a financial crisis in Japan, and lots of Japanese Firms went bankrupt. Who knows if this Black Dragon Co. will be one of the unlucky ones?
The patent fees must be collected now even if it was lower than expected. If the fees were to be collected on an annual basis, who knows if Feng Yu gets to receive it in the second year. But there was also the possibility that Feng Yu gets to collect it every year for the next 10 years.
However, the risk was too big for Feng Yu, and he dares not to gamble. If he could make 50 dollars now, why wait for the 100 dollars 10 years later? If Feng Yu invest the 50 dollars now, he will get more than double within a year!
“Mr. Feng, the pressure will be too big for my company if we were to pay all the patent fees at once. Also, it is quite impossible for my company to sell 1 million units!”
Feng Yu showed a shocked facial expression: “It can’t be. Kamada, the last time you told me that Japan had a population of over 100 million and there were over 20 million wealthy families. Adding these families and offices, you all will sell at least 1 million units in the next 10 years. These were the exact words you told me.”
Kameda Masao had a bitter expression. He had exaggerated Japan’s market and said all those to make Feng Yu lower the patent fees. But he did not expect Feng Yu to use these statics against him to make his company pay the patent fees all at once.
“Mr. Feng, those were just an estimation and was the best scenario. However, the market is full of surprises, and we can’t be sure how many units we can sell. What if we can only sell 200,000 units or even 100,000 units?” Kameda hid finally thought of a good excuse and was secretly relieved.
“Eh? Cannot be. Since your company is so weak, why should I authorize my patent to your company? I can choose to export to your company or look for a better company, like Sharp or Panasonic, to work with. They had contacted my overseas office not once.” Feng Yu calmly replied.
Did these 2 companies really contact Fu Guangzheng’s company in Hong Kong? Of course. But negotiations broke down the first time they met. It was because these 2 companies heard that they were only allowed to sell in the Japanese market and the patent fees were too high.
But Black Dragon Co. did not know about this. This made Kameda worried. If he could not get this deal, his position as China’s market Rep might be taken away from him, and he might even lose his job!
“Mr. Feng, please consider my company first. We are really sincere.” Kameda Masao stood up and gave Feng Yu another 90-degrees bow.
He was stationed in China for almost 8 years and of all the Chinese he met, they were either treating him as an enemy or eager to please him because of money. This was the first time he met someone that totally disregarded him.
Feng Yu had given him the feeling of a sly and wily 40 plus man instead of a young man. But, the person in front of him was a high school student!
Feng Yu had the rights to the patent, and this was something the other party wanted. Also, Feng Yu had shown the popularity of his humidifiers in China and overseas markets. This made the patent more valuable.
Feng Yu also made it very clear that he does not need to authorize the Black Dragon Co. He could also import the humidifiers into Japan by himself and make money.
Looking at Kameda’s expression, Feng Yu knew that he had almost touched his bottom-line. He had asked for 10 million USD Not to mention a small company like Black Dragon Co., even big companies like Sharp, would also reject him!
10 million USD out of a market worth only tens of million USD, was a significant amount. They would rather invest this 10 million USD into their R&D department to develop new products!
Feng Yu only wanted more money for his investment plan in the stock market later the year. It seems that he must give Kameda some concessions now.
“How about this? You all had estimated that the average sales in a year would be around 100,000 units and this would be 1 million USD. You must give me at least 5 years’ worth of patent fees which amount to 5 million USD. I am already giving you lots of concession. Is this alright?”
“There is no problem for 1-year advanced payment, but for 5 years, it is too high.” Kameda’s eyes sparkled. Feng Yu had relented, which means that he was willing to negotiate further.
Feng Yu acted like this was a troubling issue and said: “1-year advanced payment is definitely not possible. I will not be able to answer to my family. How about 3 years? After 3 years, it will be on an annual basis. Every year, your company must give us your production report for us to charge you the patent fees.”
“No, no, no. It’s not the production report. It’s the sales report.” Kameda Masao retorted. There’s a big difference between those 2 reports.
“Fine. Sales report. I agree to this. 3 years, 3 million USD to be transferred to me within 1 week. Any problems?” Feng Yu had an impatient look, but he already committed Kameda to the 3 years advanced payment of the patent fees.
Kameda Masao kept quiet and did not say anything for a long time.
“Mr. Feng Yu, I need to discuss with my Chairman. I will get back to you the day after tomorrow.”
“Tomorrow. If you can’t give me an answer tomorrow, then there’s no need to discuss anymore!” Feng Yu firmly replied.
After Kameda left, Feng Yu jumped up with joy. Although the patent fees were lowered from 30 USD to 10 USD, the payment method was changed to 3 years’ advanced payments based on estimated sales.
With this 3 million USD and Tai Hua Trading funds, Feng Yu can really make a killing in the stock market in the next one year. The profits will be much higher than the electric fans and humidifiers!
The next day Kameda returned to Tai Hua Trading. However, they did not agree to the advance payment of 3 years. They wanted the exclusive authorization rights to the patent for the Japan market for 5 million USD. This meant that Tai Hua trading will not be allowed to authorize another Japanese company and export the humidifiers to Japan. They wanted to reserve the Japan market for themselves!
Their Chairman had taken a loan from the bank for this patented technology. He felt that this would be more worthwhile than advanced payments for 3 years and still pay for the patent fees for remaining years.
5 million USD? Feng Yu hesitated for a while and agreed. It may seem that Feng Yu was making a loss, but Feng Yu knew that the Wind and Rain humidifiers would definitely develop new technology within 5 years. When that happens, the technology in Black Dragon Co. would be outdated, and Feng Yu can sell the latest technology to them again.
Furthermore, the Japan market for humidifiers was very small, and Feng Yu didn’t feel any pity for losing the market. It was more practical for him to take the 5 million USD. He could turn this 5 million USD into 10 million USD within a year!