Chapter Seventeen: Learning from Dell



We worked overtime today; everyone didn't leave until 9 PM.

Zhao Ye tallied today's orders.

On this one day alone, approximately 1,500 Chinese character cards were ordered from all over the country. Although this number seems large, sales will only surge in the initial period.

Many people buy Chinese character cards with the intention of becoming middlemen, profiting from information asymmetry and the price difference. It takes time for these people to actually sell the cards.

After conducting research for some time, Zhao Ye discovered that the strength of distributors across the country varied greatly, and qualified distributors could not be found in many cities.

He couldn't even organize a dealer conference.

Unfortunately, it was 1984, and there were relatively few private entrepreneurs. Even the "speculators" (or "middlemen") only emerged in the mid-to-late 1980s and early 1990s. At that time, "speculators" were prevalent throughout the country, especially in the capital region.

For example, Mu Qizhong, a notorious "middleman" who traded canned goods for airplanes, was imprisoned in 1983 after his business of buying and selling goods was discovered.

He was later released, and it wasn't until 1985 that he brought his team to Chongqing. After assessing the local business environment, he decided to make a comeback. From then on, the legendary story of Mu Qizhong, a generation of international middlemen, officially began.

Zhao Ye couldn't help but sigh, "In the 1980s, there were countless business opportunities in China, but also many difficulties."

However, we should take things one step at a time and proceed slowly.

First, thoroughly establish sales channels in first-tier cities, and then expand to second- and third-tier cities.

As is well known, one of the main reasons for Dell's success is that it bypassed intermediaries and adopted a direct sales ordering model.

Currently, there are not many strong companies in China that can act as distributors for Imagination Technologies.

Therefore, after careful consideration, Zhao Ye decided to adopt a direct sales model and open stores across the country.

Although funding may be tight at the beginning, once successful, Imagination Technology will have a greater advantage over its competitors, achieving the goal of "low cost + high efficiency + good service" and winning the favor of consumers.

Of course, the timing isn't right yet, mainly due to insufficient talent development and reserves, and a severe lack of modern management personnel. Blind expansion could not only lead to a break in the cash flow but also gradually cause problems with the company's system.

It's important to understand that as a company grows to a certain size, it inevitably needs to shift from rule by man to system-based management. In management theory, the limit of rule by man is around 300 people. Once a company exceeds 300 people, even if the chairman works 24/7, he can't manage them all, and a system is necessary. However, many companies grow too rapidly, and their systems can't keep up, relying entirely on human management. This leads to significant flaws, ultimately causing a small leak to sink a great ship.

On his way home, Zhao Ye was already considering which area in Zhongguancun to open the first Imagine flagship store...

...

the next day.

Zhao Ye first went to the Capital Radio Factory No. 18 to learn about the production of Chinese character cards.

With orders increasing, Zhao Ye had to ensure smooth production.

Soon, Zhao Ye arrived at the factory.

"If the contract manufacturing by Capital Radio Factory No. 18 is not good, I will invest in building my own factory. There should be quite a few people in Shenzhen who have connections to get imported chips and memory."

“Things like Z80 and EPROM are not restricted; you can buy them as long as you have the money.”

"For example, although the Z80 microprocessor is powerful, it is not considered cutting-edge technology and costs only $30. The RMB is very valuable now; the official exchange rate between the US dollar and the RMB is one to one."

As Zhao Ye pondered this, he arrived at the Chinese character card production workshop.

This production workshop is not large, with only twenty or thirty people working on the assembly line.

Zhao Ye walked behind these workers, watching them operate. Each of them was very skilled at soldering circuit boards.

To be honest, the production of the Chinese character card is really simple. Zhao Ye checked the finished products and found that the yield rate was basically 100%.

Factory manager Liu Zhan was extremely excited at this moment. With the increase in orders for Chinese character cards, the OEM revenue also surged.

Kyoto Radio Factory No. 18 can earn a profit of about 300 yuan from manufacturing a Chinese character card.

"Director Liu, the production of Chinese character cards is currently experiencing a peak season, and we can't afford any problems with production. Many customers are urging me to ship the goods as soon as possible. Do you think we could arrange for some more manpower to increase the production speed of the Chinese character cards?"

"No problem, I'll send another 20 people over!"

"Thank you very much, Director Liu!"

"Don't mention it. The more Chinese character cards we produce, the more money our factory can make. It's a win-win situation for everyone!"

"Haha, that's right, a win-win situation!!!"

Zhao Ye smiled and nodded.

It was a win-win situation, but Zhao Ye had taken precautions and made some preparations.

Although the production of the Chinese character cards is currently outsourced to Kyoto Radio Factory No. 18, including the procurement of electronic components, Zhao Ye still hired two purchasing agents to inquire about channels for purchasing electronic components. This way, if he were to build his own factory in the future, production delays would not be caused by the inability to purchase electronic components.

After leaving Kyoto Radio Factory No. 18, Zhao Ye went directly to Imagination Technology Company.

When I arrived at the company, it was still bustling with activity and people.

Zhao Ye squeezed through the gate and saw that the company employees were dedicated to their duties and very serious in their attitude towards serving customers. A smile involuntarily appeared on his face.

"Boss, the People's Daily has arrived. It's on your desk!" Fu Xiaoyue reminded Zhao Ye as she saw him.

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