Chapter 434 Cooperation with the Qian Family
Because he was going to do business with Cheng Wanwan, Old Master Qian had already investigated the relevant market.
Women's cosmetics and face powder is a very profitable business, but the competition in this industry is too fierce. Skin care products and cosmetics and face powder are different. Cosmetics and face powder enhance a woman's color, while skin care products protect the original skin and make the skin smoother or whiter.
Most skincare products on the market are made from pearls and milk, which are extremely expensive. They also contain cow bone marrow and cow fat, which are extremely rare raw materials that are reserved for the nobility. Ordinary people simply cannot access these things.
As far as he knew, Sui Ruren wanted to make skincare products that ordinary people could afford.
The so-called ordinary people are not the farmers and workers at the bottom of society, but the majority of people living in the city who have a decent income but are not considered wealthy. This group accounts for 80% of the urban population.
Old Master Qian asked, "How much silver does this small bottle cost approximately?"
Cheng Wanwan took out the accounts: "The raw materials for the body oil are waste products from the soap workshop. The main cost is labor. The raw material for the moisturizing cream is mainly aloe vera, which isn't expensive. A worker's daily wage is about thirty copper coins. With more than fifty people, about one hundred bottles can be produced a day. Roughly calculated, the cost per bottle is about thirty copper coins. However, the workshop construction and some equipment also cost money, which needs to be allocated to each product. So, it's about forty copper coins."
"Only forty coins..." Old Master Qian was extremely surprised. "The pearl powder in that Snow Skin Cream alone must cost at least four or five taels of silver. Our product is no worse than Snow Skin Cream."
“Yes, it’s no worse than the Snow White Cream, but we can’t sell it at such a high price,” Cheng Wanwan said. “We’re not going to follow the Snow White Cream’s path, so our consumer base doesn’t overlap with theirs. How about we sell these two bottles together as a set for 500 coins, or buy one bottle individually for 300 coins?”
Old Master Qian felt a pang in his heart: "This price is really too cheap..."
He remembered that the price of the Snow Skin Cream was around twenty taels of silver. Even a wealthy family like the Qian family thought the Snow Skin Cream was expensive. Compared to that, Lady Sui's price was too low, only five hundred coins. Would people suspect that there was a problem with the quality?
“The workshop has just started operating, so the daily output is relatively low. Once we're more proficient, the daily output will reach three to five hundred. At that time, we can operate on a low profit margin but high volume basis, and the profits will naturally increase.” Cheng Wanwan scribbled on the paper. “Let’s do a quick calculation of the profits. In Ping’an County, there are at least two to three hundred women willing to spend five hundred copper coins to buy skincare products. In Huzhou, there are hundreds more in various towns and counties, so that adds up to tens of thousands of people. That’s five thousand taels of silver in profit. And the skincare products will only last three months. I guarantee that every woman who has used my products will buy them a second time, and then we will earn another five thousand taels of silver.”
"Your Qian family's business is so big, it's impossible that you only have a trading company in Huzhou. There's Nanyang next door, Quanzhou further away, the capital in the north, and so many other prosperous cities... As long as you can transport the products there and let consumers see the advantages of the products, you can sit back and count your money in the future."
Old Master Qian's calculations began to unfold rapidly.
Huzhou alone can earn five thousand taels of silver, and there are so many other prefectures and provincial capitals; the profits involved are simply unimaginable.
Although the skin-brightening cream is expensive, in reality, not many people can afford it. It's possible that the profit margin is even lower than that of their other product.
"Madam Sui, you're brilliant! Truly brilliant!" Old Master Qian gave a thumbs up. "I knew I wouldn't regret following Madam Sui!"
"It's too early to say that now. The goods need to be sold to generate cash." Cheng Wanwan's lips curved into a smile. "Whether they can be sold or not depends entirely on Mr. Qian. Mr. Qian, please don't let me down."
Grandpa Qian was full of confidence: "The Zhao family of Dahe will definitely have a shortage of this skin care product, so Madam Sui can rest assured."
Having been in business for decades, he was a seasoned businessman. In a short while, he had already formulated a general plan: to ensure the product sold out as soon as it hit the market, establish a reputation first, and then he wouldn't have to worry about the future.
Cheng Wanwan wasn't worried about the IPO. She asked slowly, "What are Mr. Qian's thoughts on profit sharing?"
“Mrs. Sui provides the technology and labor, and she is in charge of the entire product from start to finish, so of course you should take the lion’s share,” Old Master Qian said. “Our Qian family will just take one-third of the profits.”
"Mr. Qian, you're being too kind," Cheng Wanwan disagreed. "The Qian family is responsible for transportation and sales, and the costs for both of those are not low."
Modern transportation is very convenient and costs have been reduced, but in ancient times, transporting large quantities of goods was prone to accidents. Only some large merchant guilds dared to travel all over the country or hire escort agencies to protect their goods. Otherwise, if they were killed on the spot by bandits, no one would know.
“It’s a 40/60 split, with the Qian family taking 40%,” Cheng Wanwan said. “I will be responsible for all matters before the products leave the warehouse, but I will not be responsible after they leave. Any product losses will be attributed to your Qian family. We will settle the accounts every three months. If there are any problems with the accounts, then our cooperation will end here.”
Old Master Qian sighed, "Everyone says that Lady Sui is magnanimous and more generous than men, and I've truly witnessed it today. I've been in business for so many years, and every time I sit at the negotiating table, I try my best to lower the other party's price. This is the first time, and I hope the other party will make a concession. How about a 30/70 split? We Qian family are already embarrassed to take 30%, and if we give 40%, I won't know where to put my old face."
Seeing that Old Master Qian was truly sincere, Cheng Wanwan didn't press the matter further. She nodded and said, "Then let's split it 30/70. Sidan, draft two contracts for me."
Zhao Sidan responded from inside the house, "Yes, Mother."
The work contract for this glycerin workshop was written under Cheng Wanwan's guidance by Zhao Sidan. The kid can now be considered to know how to write contracts. He left the places with numbers blank, then filled them in in front of Grandpa Qian. The two of them pressed their seals and fingerprints at the end, and the cooperation was officially established.
"I heard that Madam Sui gave the workers zongzi and duck eggs for the Dragon Boat Festival, and also gave them three days off. This news has even reached our Hekou County." Old Master Qian stroked his beard and said, "I don't have Madam Sui's talent, so I can only follow her example and give the managers and employees of the Qian Family Trading Company a day off. I couldn't afford three days off, so I gave them one day off and gave each of them twenty copper coins. They were all very happy, and when they came back to work, they were all very energetic. In this respect, I still have a lot to learn from Madam Sui."
Giving someone a day off can keep their subordinates motivated for the next month. It's a sure-fire way to make money. Why didn't he think of that before?
Partnering with Lady Sui in business was the best decision he ever made.
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