MP3s, as a new type of electronic product, are marketed in much the same way as other electronic products.
Most adopt a dealer model, with very few employing a direct sales approach.
This is because direct sales require a substantial upfront investment, and companies without significant capital reserves simply cannot manage such a model effectively.
Therefore, most companies and manufacturers opt for the dealer model.
This involves uniformly supplying products to a regional general agent, after which many matters no longer require direct attention. Whether it's franchising or general dealership, it's all handled by this regional general agent.
There are various profit models, such as sales commissions or outright purchases, with each manufacturer making their own choices.
Xiaomi Factory's chosen model this time is the dealer model, with profits based on sales commissions.
However, as Xiaomi Factory is a new company and its products are relatively novel, many dealers remain conservative, hesitant to sign too many orders at once.
They also made excessive demands such as waiving upfront agency fees and reducing capital commitment.
Although Xiaomi Factory felt wronged by this, they could only compromise and make concessions. After all, they were indeed a newly established enterprise!
Any company will undergo similar "tests" before it grows large.
The best way to overcome this is through results – sales performance!
Once sales performance improves, the relationship between manufacturer and dealer will change significantly, at the very least becoming equal.
The dynamic will shift with sales performance; if sales continue to improve, the manufacturer will naturally gain the upper hand. Conversely, the situation could reverse.
Time flew by, and the lively first day concluded as evening arrived.
In a spacious office at Xiaomi Factory, a crowd had gathered, each face etched with anxiety.
This was because everyone was awaiting something.
This awaited event was the performance report promised by each dealer, and everyone understood the immense significance of this matter.
The scheduled reporting time was 7:30 PM, but several minutes had already passed, and not a single dealer had called.
The screen of Qin Chuan's phone, placed on the table, kept flashing with calls from people inquiring about the day's opening sales performance.
Initially, Qin Chuan chatted pleasantly with each caller, but eventually, he simply muted his phone and ignored the calls.
Fang Rumei and other executives were in a similar situation, having muted their phones. They took their calls outside.
"Boss, it's already 7:40 PM, ten minutes past the agreed-upon time. Why hasn't a single dealer called us?" someone asked, unable to contain their impatience.
"Yeah, this is too strange. Why don't we call them?"
"Call them for what? Be patient!" someone retorted, their face flushed with irritation.
"I think the sales performance in each region shouldn't be too bad. Let's wait a bit longer. Perhaps they're busy with accounting and tallying up sales, especially considering our excellent sales performance in our city today," a senior executive offered, trying to comfort everyone.
After this executive spoke, the anxious crowd finally looked a bit more relieved, and some even flashed a smile, revealing their white teeth.
Just over ten minutes earlier, the sales figures for Longcheng had come in!
A total of 3,592 units were sold. Of these, 1,824 units were Xiaomi MP3s with 128MB of memory, 1,000 units were 256MB MP3s, and 768 units were the less numerous 512MB models.
This was an exceptionally impressive result, far exceeding expectations.
In everyone's estimation, achieving sales of 1,000 units in Longcheng that day would have been considered very satisfactory.
Someone within Xiaomi Factory had already calculated that while products with higher memory offered higher profits, the average profit margin across all tiers was around 40%.
However, this 40% was the net profit after all expenses. The gross profit margin could reach about 70%.
After all, electronics products offer substantial profit margins, especially now. Xiaomi Factory was the first company in China to develop MP3s, allowing them to set their own prices and thus maximize profits.
This initial wave of wealth was theirs for the taking!
With an average product price of 288 yuan, the net profit per unit was 115 yuan. For 1,000 units, the profit would be 115,000 yuan. For 3,592 units, it amounted to 413,080 yuan.
In a single day, just from Longcheng, the pure profit generated was 413,000 yuan, an almost miraculous windfall.
The first to receive this news were naturally the two major bosses, Qin Chuan and Fang Rumei.
Upon learning of the astonishing sales figures in Longcheng alone, Fang Rumei, overcome with excitement, leaped into Qin Chuan's arms, bouncing so vigorously that she nearly broke his old back.
After all, Longcheng was not a first-tier city; its development in various aspects lagged behind major cities like Beijing, Shanghai, Shenzhen, Guangzhou, and Chengdu.
This result was simply outstanding!
Time ticked by, and it was already 7:50 PM.
At this point, not only the others but even the two bosses, Qin Chuan and Fang Rumei, began to frown, their faces showing signs of anxiety.
"Qin Chuan, why don't we call them and ask what's going on? Why are they reporting so late?" Fang Rumei whispered to Qin Chuan, who was smoking beside her.
Qin Chuan looked up, moved his arm, and then put it down.
"Let's wait a bit longer. I refuse to believe that out of so many places, not a single person will report back?"
As they were speaking, the sharp ringing of a phone shattered the office's silence, startling everyone. But this was immediately followed by elation.
"Boss, quickly! Answer the phone!!" an employee urged, their voice trembling.
Qin Chuan gestured for Fang Rumei to answer. She immediately picked up the phone and put it on speaker.
"Is this Mr. Qin? I'm a dealer from Beijing, my name is Li Guomin..." a man's voice came through the phone.
"Get straight to the results!" Fang Rumei said loudly, frowning.
"Okay, I'll report today's sales figures now. We sold a total of 7,812 units. Of these, the 128MB memory products were..."
While Li Guomin, the dealer, was still explaining the details on the phone, deafening cheers erupted from the office in Longcheng. Everyone was jumping and shouting with joy as if they had gone mad.
No one paid attention to the breakdown of units sold for each product; the total count was all they needed.
Seven thousand eight hundred and twelve units!
Good heavens, that was more than double the figure from Longcheng! This answer was enough to make one dizzy with high blood pressure.
This sales report was simply magnificent!
Even Qin Chuan, who was usually as steady as an old dog, couldn't help but clench his fist and punch the air a few times.
"Mr. Li, this sales report is excellent, and we at Xiaomi Factory are very satisfied."
"On behalf of everyone at Xiaomi Factory, I thank you for your efforts!" Qin Chuan said.
"Mr. Qin, you are too kind! This is a win-win situation. When the final figures were tallied, I was astonished myself! It's truly unbelievable!"