Chapter 54
Chapter 54
Pointing to that specific part on the internet site, manager Jung explained to Hong,
“You have to take into account FTA. If you apply that, we don’t have to pay any import duties. Just 0%. In fact, it means an 8% drop.”
“Oh, I didn’t know that. FTA!”
Hong slapped his lap as if it had come to his mind at this moment.
“Who knows? If we sign a contract that entails a large quantity of castors, we could enjoy a further drop in the unit price. As you’re good at negotiating, contact them now.”
“Yes, sir.”
Hong looked up the phone number to contact N&C Korea.
Strangely enough, he could not find it anywhere. The only contact information was an email.
“I don’t see its contact information there.”
“I can’t believe that. Just double check it”
However, Hong couldn’t find it. Then, he clicked the section on the estimate inquiry, and he could understand why there was no contact information there.
Jung and Hong seemed perplexed momentarily and then murmured at the same time,
“What the heck is this company?”
“Does it want to do business or not?”
Despite such complaints, they were anxious to do business with N&C because they were under intense pressure every day to find a cheap and quality raw material, and they had to do it as soon as possible.
“Hey, Mr. Hong, just make an inquiry on the estimate cost along with the product specification. Also, leave our email address and contact number.”
“Don’t you think this is a ghost company? I wonder if they confirm our messages here on its bulletin board.”
“We lose nothing by doing that anyway. Also, we have no other way now.”
“Got it. Let me send an estimate inquiry first.”
“Okay then. Try to find out other possible suppliers until you get a reply from N&C Korea.”
With that, Jung went back to his desk and tilted his head, thinking,
It’s understandable that they would try to reduce operation costs like that, but how can they do business like that? I wonder if I trust them or not.
***
Jang Duyong flicked the switch. The back of the chair automatically went up along with the sound of the running motor. At the proper angle, he pushed the button again to stop it. The computer was on, and the N&C internet cafe was displayed on it.
Jang was busy checking the computer monitor like this for the past two days, but there was no call or inquiry yet. There were several visitors to the internet site but no actual inquiries.
It might be the same this time, Jang thought, when he clicked the bulletin board on the estimate cost inquiry corner.
At that moment, Jang was startled to see a message that said “Inquiry about estimate cost.”
He checked the message right away, which not only explained the product specification but also a quick reply.
Jang acted as instructed by his son. It was to convey a message to Mr. Na Sungji in Vietnam. He then informed Na about the inquiry, along with a reply to the message.
His reply was simple enough:
***
“Manager, we’ve got a reply to our inquiry.”
“Rely? Are you talking about N&C?”
Jung rushed to Hong’s computer monitor to confirm it.
Though it was very short, it was important to have gotten a reply anyway.
Scratching his head, Jung said, “Is that all?”
“It seems so. We have to wait just a little more, though.”
Three days later.
Opening his email, Hong shouted in surprise.
“Sir, we’ve got the estimate from N&C Korea.”
“Really? What’s the unit price?”
“It’s the same as the one we saw on its homepage. 30 cent per piece.”
Jung snapped his finger. If the quality was as good as the Taiwanese part, he could cut the cost enormously.
“Place an order on the product samples immediately.”
At his direction, Hong answered, scratching his head,
“We’re supposed to pay the shipping fee on our end if the order is less than 10,000. That’s the same for the samples, too.”
With a surprised look, Jung checked out the reply carefully.
As Hong said, the shipping was to be paid by the buyer, and the reply asked if the buyer wanted it shipped by a cargo ship or by air. As for the payment method, there were only two: prepayment or open a letter of credit in the local area. In other words, there was nothing N&C could lose from this deal.
“What the heck is this? As the local vendor, how come it shows such a strong attitude?”
Jung asked and answered the question by himself.
Come to think of it, he didn’t need to agonize about it.
It would cost less than 200,000 won even by air. Given the enormous reduction in cost, however, he would not have to worry about the shipping cost.
“Order 200 samples by air.”
“Got it, manager.”
***
It was 15 days after they placed an order that the samples were delivered to the Blue factory. Immediately, its product development team was tasked with testing the samples, and the results came out in less than three days. The samples successfully passed all the quality tests.
The president of Blue expressed caution, though. He was concerned that the quality of the actual products would be worse than the samples.
“For now, replace only 30% of the necessary parts with the Vietnamese parts. If they continue to maintain the quality, we can increase the order by 30% every month.”
“Yes, sir.”
***
It was almost the same time that the samples were delivered to Blue and Myungsung. Three days later, Hyunwoo got a call from Sangyun, whose voice was spirited.
“Hyunwoo! I think I can get a big award money this time.”
Hearing his cheerful voice, Hyunwoo could figure out that the deal had worked out smoothly.
“The quality of the Vietnamese product is much better than the Chinese part, right?”
“Absolutely. In terms of strength and durability, it is much better. It also feels so soft that it gets confused with a Japanese part. As you know, the wheel part is the most important in a handcart. Our president called me directly to praise me, saying that I had found out a very good material supplier. I guess I will get a special promotion during the next promotion time.”
Sangyun seemed to be pretty excited because he kept talking to Hyunwoo.
“Okay, I think you have to treat me to a great meal this time, dude. You know I love expensive food, right?”
“Ha ha. Of course, man. I think we will sign the contract soon. We’re planning to replace 20% for now and then replace them all when they maintain the quality.”
“Ha ha. Congrats!”
This time, Hyunwoo had a call from Blue.
When he got home after work, his father waved at him and said,
“Hyunwoo, look at this! This is our first transaction.”
Hyunwoo immediately checked the bulletin message that requested a contract.
The amount of the order was not big: $7,000. However, the message said that if the product quality was maintained steadily, the order would be increased every month, and the amount of the order would be $22,000 after three months.
“How big is the margin?”
“I talked to Mr. Na, and he said that net profit would be 9% of the sales price. 5% of the profit goes to Na, and we take 4%.”
“4% of $22,000 is about 900,000 won.”
“Right. Not bad for the first transaction.”
Actually, it was an eye-popping amount.
Soon, N&C would sign a contract with Mungsung, too. Though the quantity of the order was less than that of Blue, the margin would almost be the same as Blue’s because of the high unit price.
If N&C pulled off a couple more contracts like this, the profits would be larger than the salary of an employee of a middle-sized company.
Actually, N&C’s business with Blue and Myungsung was just the beginning. In less than one month after N&C Korea sent an official promotion letter to the interested companies, it received as many as nine factories inquiring about the estimate cost.
Hyunwoo handled the business only through the internet. His father never called any interested factories. Even the contracts were finalized through email.
Out of the nine factories that made an inquiry on the estimate cost, seven completed the order, and they were all satisfied with the quality. Some of them tried to cut the unit price a little more, but Hyunwoo didn’t accept it. He was convinced that he could prevail if he stuck to his position. He didn’t even call. He just left a message on the homepage that said “N&C Korea doesn’t have a salesman, and it doesn’t negotiate on the price.”
In the end, the interested companies gave up. All the seven companies signed the contracts, which amounted to $70,000 per month. It was close to the order placed by Aurum.
After he got back home, Hyunwoo called Na on his cell phone.
“Did you receive the orders?”
“Yes. I could not even produce the order I received last week. I think we can process the current order on a full scale next month.”
“It takes a lot of time, though,” said Hyunwoo.
“Well, it’s beyond our capacity at the moment because of the abrupt surge in demand. Even if we hire new employees, they can’t become skilled workers quickly.”
“Okay, then. I’ll inform the relevant factories about your situation.”
“Sorry about that. Even though I asked you to open a sales company, I can’t even process the orders properly.”
“Okay, then. As soon as I receive the money from the sales, let me wire the money except for the sales commission.”
After the call, he looked at his father, who had been using Excel on his computer.
“What are you doing?”
“I’m calculating the monthly commission from the sales.”
“Is it profitable?”
“I think we could start making 4.5 million won after three months.”
Hyunwoo’s eyes opened wide. He had expected the commission income to increase as N&C Korea concluded more companies, but he could never know what would happen in the future. He didn’t want to count his chickens before they hatched, as the saying goes.
In fact, how much money he would make was not that important to him. What really mattered to him was how to spend it. Of course, he would have to agonize over it.
Whenever he had extra time, Hyunwoo spent all his time on sales activities.
He searched any company on the internet that might need castors, and he then sent them official pamphlets on N&C Korea’s products.
Though it was a defensive promotion strategy, it had an unexpectedly good effect. A month after N&C Korea was founded, it signed three more contracts, whose combined order was $20,000 per month. Of course, there was limit to these kinds of sales.
The inquiries on the estimate cost came in steadily for about two months, but they stopped suddenly at some point. It seemed certain that an expansion of sales was difficult to achieve only through the internet or with an official promotion letter.
However, he could not think of any other method. He could not make his father go out and work as a salesman. He also felt it was not a good idea to hire a salesman separately.
He had to find some a different method.
“Oh, I have a headache!”
On the weekend, he went mountain climbing with his parents to cool down his head.
While walking on the trail, he was thinking about some good ways to expand N&C Korea’s sales. At that moment, he got a call from Paek Sungwoo, who he had met at the recent alumni meeting. As he is a free man, he might be wandering somewhere in Cheju island, Hyunwoo thought to himself.