Super Rich from Winning a Lottery

Chapter 412 270: Exorbitant Profits (3)

The first acquisition was a bedding manufacturer in the provincial capital of Xijiang Province, with over 800 employees, followed by the acquisition of an underwear manufacturer with more than 600 employees.

Subsequently, they gradually acquired a towel factory, a clothing factory, a mat factory, and carried out bold reforms.

First, a batch of excellent production enterprise management employees were hired, some skilled workers with good technical expertise were recruited, and high-quality fabrics and other production materials were selected.

Without good materials, it is impossible to produce good products.

Without good workers, it is equally impossible to produce quality products.

It is only when everything is ready that there is a possibility to produce products of good quality.

At the same time, strict control over production costs is necessary. No matter how high the product quality, if production costs are too high, it will lead to excessively high final sales prices. If the sales price is too high, then there is basically no competitive advantage.

The main purpose of products from Yi Anguo's company is to ensure high quality but also low prices.

Having good quality but high prices is useless! If your price is higher than that of large brands, why would consumers choose to buy Yi Anguo's products?

Although Yi Anguo's online supermarket or offline physical supermarket garnered a lot of customer support, in the face of high-priced goods, customers will still choose not to support you.

At the same price, or even lower prices than yours, I can buy products from large brands, whose product quality is also guaranteed, so why would I choose to buy Yi Anguo's products?

Besides, products from large brands are produced by old enterprises with years of experience, while Yi Anguo's products are merely from a company that just started producing goods—how good the quality is can only be known once used.

What if the quality of Yi Anguo's products is not as good as those produced by the large brands? Wouldn't I suffer a great loss?

Even if your product quality is not significantly different from that of large brands, but you have no price advantage, why should I choose you?

Therefore, if Yi Anguo wants to carve a path in the market, he must ensure quality while also guaranteeing low prices, otherwise, he won't be able to compete with those large brands.

If you are not competing in the market against those large brands, and instead compete against low-priced, lesser-quality products, you still don't have any price advantage!

Many people are well aware that those products might not have great quality, but their price is low enough! The cost of buying two of those products might be less than the cost of one of your products, so how do you expect these customers to support your products?

To win the market, one must achieve affordability and quality assurance—products need to be cheap and guaranteed in quality. Only then can you gain customer's trust and eventually win the market.

The same old saying goes, Yi Anguo's company might not aim to make profits, but they don't want to incur losses either. At the very least, they want to maintain a balance between revenue and expenses, managing their own gains and losses.

I can invest initially as startup capital, but you can't expect me to keep investing continuously over a long period, can you?

You may not be profitable, but you cannot continue to lose money indefinitely.

Once the first batch of test production samples was ready, Yi Haiyang sent them over for Yi Anguo and his family to try out and offer suggestions.

Yi Anguo tried on the sandals and underwear from his company, feeling that they were quite nice and comfortable. Then Yi Anguo asked Yi Haiyang about the proposed selling price on the online supermarket.

Upon hearing Yi Haiyang's quoted price, Yi Anguo looked at the prices of similar products on the online supermarket and realized that this price was actually not cheap.

This is compared with those generally lower-priced and mediocre quality products; Yi Anguo's price might be relatively higher, even much higher than some products.

However, considering the quality, Yi Anguo felt that Yi Haiyang's quote wasn't high and could be acceptable.

"What is the cost price of these items, and what is the profit?" Yi Anguo pondered and asked.

"Based on the quote I just gave, the current calculated cost price should yield about a thirty percent gross profit margin," Yi Haiyang replied.

"However, our online supermarket also requires operating costs, and there are expenses for advertising and promotions. Plus, the factory also needs profits; without profits, it's hard to sustain long-term operations."

"So, personally, I think a total of thirty percent gross profit for the factory and sales isn't much. And then there are expenses related to taxes."

"The cost I asked about should already include these aspects. I am asking for the total cost, which is the cost after all expenses have been deducted," Yi Anguo asked, slightly displeased.

"After deducting all the costs, how much profit is left at this price point?"

"Currently, because we are still at the sample trial production stage, specifics of the cost cannot be entirely calculated," Yi Haiyang replied, slightly embarrassed.

"Once formal mass production begins, costs will surely be further compressed, and that will be the time to truly calculate the total cost of a product."

"Furthermore, this also relates to production volume and sales volume. If sales are larger, production is greater, then there's further room for cost reduction."

"After all, the quantity of raw material purchases also determines the purchase price; the larger the purchase volume, the cheaper the price."