Chapter 175 It's Hard to Choose
Regarding Yuris' suggestion to raise the price, Baichuan Feng thought about it and shook his head to refuse.
“According to the current pricing of the three products, tariffs and the Japanese government’s export preferential tax rates are removed.
The profit of low-end models is about US$38, the profit of mid-range models is around US$52, and the profit of the high-end SFM-01 can even reach US$87.
In order to open up the market, the price we offer to channel dealers can continue to drop to US$96, US$128, and US$216.
Even so, we still have considerable profit margins, which can bring more advantages for our products to enter major distribution channels.”
Such pricing not only takes into account the issue of tariffs, but also the consumption level of the American people.
Compared to Neon’s local pricing, the retail price here is naturally a bit higher.
With this calculation, the profits of the three models from low to high are approximately 6,000 yen, 8,000 yen and 14,000 yen respectively.
This is already a considerable figure, much higher than the local profits.
No wonder so many companies are trying their best to export their products overseas. The profits involved are truly lucrative.
Yuris still retained his own opinion on Shirakawa Kaede's pricing strategy.
The added value of this high-end model with exquisite workmanship far exceeds the pricing range of ordinary consumer goods.
Therefore, it is possible to be more aggressive in determining the retail price. After all, people who buy this kind of product will not care about the difference of twenty or thirty dollars.
“How about this, we will first launch two models of our Walkman: mid-range and low-end models.
As for the pricing of the high-end model SFM-01, it can be adjusted accordingly based on the sales of the first two models.”
Since everyone's opinions were not unanimous, Baichuan Feng simply made a compromise.
Moreover, when launching a new product, it is not advisable to launch too many models at one time.
Shirakawa Electric will roughly follow this rule and launch the first-generation mid-range models first.
Next is the low-end model, and the pricing of the high-end model will be finally determined based on the sales performance of the two products.
Yuris had no objection to this arrangement.
Moreover, Baichuan Feng's flexible attitude in handling problems once again impressed him with the young boss.
It's not that Yuris has never dealt with the Japanese. On the contrary, he can be considered an expert on Japan.
Therefore, he also has a very thorough understanding of the conservative and stubborn character of the Japanese.
However, this boss did not have any of these troublesome "characteristics", and Yuris even felt a little fortunate.
Dealing with such a Boss will surely be a lot easier in the future.
"In that case, let's all go our separate ways." After the meeting, Baichuan Feng immediately got to work.
He always put efficiency first, especially in a foreign country. He had to finish the things here quickly, because there were still a lot of things waiting for him in Japan.
The next day, Shirakawa Feng took Yuris to visit Walmart's branch in Los Angeles.
Pena, the senior merchandise manager here, received them in his office.
“Gentlemen, I admit that your products are very fresh and unique.
But it's so new, so new that I have no idea whether it will be popular with customers.
Walmart is the largest comprehensive supermarket chain in the United States, and we need to be responsible for every product that enters Walmart.
Anything that can be put on the shelf and sold to customers must be popular.
But it…” Pena, leaning on his arm, pointed to several machines on the table and shrugged.
"There's no guarantee they'll be popular, because it's never happened before."
Pena was conservative about this new type of music player. Walmart was always cautious about products that had no market proof.
After all, the quantity of each commodity purchased at Walmart is in the tens of thousands.
If this new product fails to gain favor with customers, the losses would conservatively be estimated to exceed millions of dollars.
"Come on, Pena. Sony's walkman, you know, they're already on the market in Illinois.
Especially in Chicago, young people there are very fond of this trendy music player.
And our products are better and more fashionable than theirs.
Look at these lovely machines, they are simply incomparable.
And then there are these incredibly small headphones, which I dare say are absolutely genius in design.
No one will refuse them, Pena, please believe me. My reputation with you has always been above A+ over the years. "
Yuris pointed at the Walkman on the table and tried his best to recommend it to his old friend.
He and Pena have dealt with each other many times in the past few years and are old acquaintances who know each other well.
"Yuris, it is precisely because of our past that I am meeting you here today.
And as far as I know, the performance of Sony's new gadget doesn't seem to meet market expectations yet.
So I'm sorry I can't help you with anything regarding purchasing.
Again, no one knows what their future holds, unless God guarantees it.”
It would have been better if Yuris didn't mention Sony. Once Sony was mentioned, Pena became more cautious.
As a merchandise manager in the department store industry, he keeps a close eye on every new thing.
If the market performs well, Pena will not hesitate to include them in Walmart's sales channels.
But if the early response is mediocre, Pena will have to be much more cautious.
Yuris was helpless against Pena's stubbornness.
This guy has always been so cautious that he would rather miss the initial popular trend of a product than take the risk.
"Mr. Pena, thank you for your hospitality today. If you change your mind one day, please feel free to contact us."
Seeing that this visit would not have any optimistic results for the time being, Baichuan Feng did not want to continue to persuade here, so he simply stood up and prepared to say goodbye.
"A friendly reminder to my young Japanese friend: Do not casually reveal your Japanese identity to others.
Especially in areas where the "old white southerners" live, they don't have a good impression of Japan. "
Just when Shirakawa Feng was about to say goodbye, Pena unexpectedly said something that had nothing to do with the current topic.
Baichuan Feng turned around and nodded to him again, "Thank you for your reminder, Mr. Pena. I hope we can have a more pleasant conversation next time."
It seems that I didn't gain anything from this trip to Walmart .
It wasn't all in vain. Shirakawa Fenglu smiled bitterly, at least he got a friendly reminder about personal safety.
He knew what the "old white man" Pena was talking about was. This year, Japan's automobile production volume officially surpassed that of the United States, making it the world's largest automobile trade exporter.
Most of these cars are exported to the Western world, and the United States is undoubtedly the largest market recipient.
As a result, the U.S. auto industry became increasingly depressed, so a large number of factory workers took to the streets to organize demonstrations.
Recently, it has even developed to the point where Japanese cars are smashed in public.
It is conceivable that the American people at this moment certainly do not have a good impression of the Japanese in the United States.
If a Japanese person walks alone in an area where "old white men" gather, he will definitely be in trouble.
After leaving Walmart, Baichuan Feng was still frowning.
Unable to open up chain supermarket channels, it is simply wishful thinking for Shirakawa Electric to distribute its Walkman in most cities in North America.
It just so happens that this is the time to race against time with Sony, as Sony's Walkman is still in the initial promotion stage.
Now is the best time to catch up with it, otherwise you will fall behind step by step.
It seems that things are not smooth sailing most of the time, but difficulties and twists and turns are the norm.
"Boss , do you want me to make another private appointment with Pena?
Maybe if we give him a little more profit sharing and prepare a gift, he might be more willing to give in."
Yuris, who was beside him, was still a little dissatisfied about not being able to convince his old friend Pena.
"Let's go back first. This is the first one. It's not a wise choice to lower the factory price before trying other possible partners."
Baichuan Feng has always been cautious about making concessions.
Because once you give too much concession in the first cooperation, it will be difficult to set a high price when discussing other cooperation in the future.
In the future, Shirakawa Electric will produce more than just the Walkman product, so it is better not to do something that will only benefit the poor.
Back at the Shirakawa Electric branch, Shirakawa Feng and Yuris continued to study the next person they were going to visit.
There are only a few chain supermarkets, so it is not difficult to visit them one by one.
However, just as Shirakawa Kaede and the others were discussing the next person to visit, Hasegawa brought back a cooperation request that made everyone difficult to decide.
"So that's what they're proposing?"
Baichuan Feng looked at the cooperation plan on the table and felt it was extremely difficult for a moment.
"Hay" Hasegawa nodded, his face looking quite conflicted.
"I have checked this trading company. It is well-known internationally. The United States in particular is their main base of operations.
In addition, we also provided guarantee to the Electronic Industry Promotion Association, which is a reputable trading company with complete formalities and documents.
There haven’t been any serious lawsuits in recent years.”
Baichuan Feng looked at the letter of intent in his hand again. 200,000 units, what a huge deal.
Moreover, the three models are sold at 200,000 units each, calculated based on the pricing agreed upon previously.
So 600,000 units means $260 million in revenue! $260 million, 65 billion yen.
The profit alone can reach about 20 billion yen. Who can refuse such a huge amount of money?
Based on Shirakawa Electric's current scale , it may take 2-3 years of domestic operation to generate a profit of 20 billion yen.
Why are people so concerned about such huge profits?
Because this international trading company called Delmonico had only one condition for Shirakawa Electric.
That is, the portable players produced must be labeled with their brand.
In other words, Shirakawa Electric became their OEM and produced products for Delmonico.
Sure enough, the extremely tempting profits are also accompanied by extremely worrying problems.
