Extraordinary Genius - Chapter 676
Chapter 676 – Suppliers’ headaches (Part 2 of 2)
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“Eh, have you all heard the news? Qinwang Jelly has beentaken off the shelves and is replaced by a Strong Group Jelly. Have you allheard of this brand?”
“Ah? Why? Qinwang Jelly has been doing well. Why are theybeing replaced? Is this a big brand? An imported brand?”
“What imported brand? It is a small factory in Guangdong.But I heard this Strong Group have strong connections. They seem to be relatedto Lehaha.”
“Oh…… Lehaha’s products have been selling well. They are oneof the earliest companies who had signed a long-term contract with Tai Hua Supermarket.But I heard that it was Qinwang Jelly who had refused to give Tai HuaSupermarket a lower supplier rate.”
“Huh? You are saying that Qinwang is kicked out of Tai HuaSupermarket because their rates are higher? That Strong Group is their replacement?”
“This is possible. Tai Hua Supermarket had notified us tosign a new contract with them. They demanded a lower rate, and we are nowstalling the signing. Do you think they are using Qinwang Jelly as an example?”
Some suppliers of Tai Hua Supermarket were sitting togetherdiscussing the new contracts. They were invited over by Tai Hua Supermarket andhad wanted to stall for more time. But now, it seems that they cannot wait anylonger.
One supplier was taken off shelves. That means there will beother suppliers’ products that will be kicked out. All the suppliers there werenot the only suppliers in the market. They could be replaced easily likeQinwang Jelly. If this happened to them, their companies would suffer massivelosses.
Although Tai Hua Supermarket wanted a new supplier price andthe suppliers will make lesser profits, but lower profits are still profits. Ifthey were kicked out, then there will be zero profits. Because of their saleswere increasing due to the success of Tai Hua Supermarkets, all the suppliershad increased their production. If they were kicked out suddenly, they would beleft with lots of stocks.
If they do not want their stocks to remain in theirwarehouses, they have to lower their prices to clear their stocks. If that’sthe case, they might as well sign the new contract with Tai Hua Supermarket.They will be able to increase their brand awareness because of Tai HuaSupermarket.
“Manager Guo, the prices they wanted is too low. I know theprice quoted by another company is real, but can their quality be compared tous? Regardless of packaging, taste, and quality, they are lower than us. Ourcost is higher than them. The prices you wanted is really very low.”
“We did not lower the rates unreasonably. This new rate isbased on our calculations. Look at this figure. This should be your cost,right? The rates we wanted includes your profits. Think about it. After youwork with us, Tai Hua Supermarket, how much did your sales increase? Just thesales from Tai Hua Supermarkets alone is more than your previous 6 monthssales. Are you telling me that this is not due to our Tai Hua Supermarket’smanagement?” Manager Guo crossed his arms and asked calmly.
“But Manager Guo, your supermarkets should also be sellingquality products. You can price our products higher and let the customers morechoices.”
“This is not up to you to decide. We will consider it. Also,this product is not only produced by two companies. There are still many brandsout there who wanted to enter our Tai Hua Supermarket.” Manager Guo arrogantlyreplied.
There should be a variety of products. Different brands willhave different pricing. Tai Hua Supermarkets wanted to offer a wide range ofproducts to their shoppers. Two brands for a product was not sufficient. Thereshould be at least more than 5 brands.
“Manager Guo, please increase the prices slightly. Justincrease by 10 RMB per item will do. If you increase, I will sign the contractimmediately.”
Manager Guo looked at the person beside him and discussedsoftly. Then Manager Guo said: “I will increase 5 RMB per item. This is themaximum I can offer. If you don’t sign, then we will not work with your companyin the future.”
“Sign! I will sign the contract now!”
“Manager Fu, I heard that you went to the south. When didyou return?”
“Tai Hua Supermarket is going to renew the contracts withthe suppliers. There is a shortage of hands, and all of us returned to helpout. This is the new contract we have prepared for you. Here.” Fu Guangzhengpassed a document over.
“Manager Fu, is there something wrong with this contract?How come the prices are so low?”
“This is the new rates we offered. If you accept the newrates, then we will sign the contract. If you disagree, then forget it.” FuGuangzheng replied.
“What do you mean? If we don’t accept this rate, you allwill not buy our stocks?”
“You can see it that way.”
“Our contract duration is one year. You all are breaking thecontract!”
“Look at No.3 and No.4 conditions in your contract. It isstated clearly that if we cannot accept the pricing, we can terminate thecontract anytime. We had explained this condition to you before you signed thiscontract. I remembered that I was the one who explained it to you, personally.”Business is all about profits. If your pricing is higher than others, whyshould we buy your products?
“Manager Fu, what you are doing now is not right. Ourproducts are selling well, and you should know it. Based on the market share, weowned the second biggest market share.”
“You also said that you all are only the second. China’sNo.1 had already signed a contract with us. We don’t really need you.”
What’s so great about having the second biggest market sharein China? Lots of the world’s number one brands are selling their products inour supermarkets!
“You all better, don’t regret this!”
“Seems like you do not want to sign the new contract. ThenI’m sorry. Tomorrow is the last day we sell your products in our supermarkets.Thank you. You can leave now. Please call Manager Wang from Dafai Company in.”
These few days, Tai Hua Supermarket’s suppliers saw Tai HuaSupermarket’s firm stance on the new pricing. The new pricing was very low. Butthe sales volume of Tai Hua Supermarkets were more substantial than all otherretailers. If the suppliers agree to the new pricing, then Tai Hua Supermarketwill offer some concessions in the future.
But if the suppliers disagree, they can still negotiate. Butif the suppliers chose to fall out with Tai Hua Supermarkets, then sorry. TaiHua Supermarket will ask the supplier to get out immediately!
Especially Feng Yu. He was ruthless and never negotiate withthe suppliers. The suppliers had to follow whatever rates he set, and if theydisagree, Feng Yu would ask them to get out immediately.
This was the current situation. There were too many brandsthat wanted to sell their products in Tai Hua Supermarkets. Tai Hua Supermarketstill had to choose the suppliers and did not sign contracts with all thesuppliers. This was because there were not enough shelves in Tai HuaSupermarkets.
Tai Hua Supermarket set the conditions and those who werewilling to sign the new contract, will be able to carry on their partnership.Those that refused to sign will see their products having a huge discount thenext day. Tai Hua Supermarket will try to sell off all their existing stocksthat day and then remove them from the shelves altogether. The following day,there will be a new brand of the same product on the shelves.
Even if it was an unknown brand, but once it was sold in TaiHua Supermarkets, shoppers will think that it was a good product. Tai HuaSupermarkets had promised their customers that if they discover any expired orlower quality products, they will compensate the customer 10 times the amount.
The renewal of the contracts was completed in a week. Atleast 10% of the brands had disappeared from Tai Hua Supermarket, and they werereplaced by new and more brands. Consumers had a wider range of choices thanbefore.
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