Chongzhen revived the Ming Dynasty

As an official dedicated to serving the people, Liu Lishun naturally paid close attention to the demands of the Suzhou-Songjiang merchants.

In particular, the factories run by these businessmen are related to the employment of many workers.

After the war ended, he kept thinking of ways to solve the problem of sales channels for products in the new district.

He eventually found a way: producing supplies for immigrants.

In recent years, the emperor has been using the gold and silver collected from Jiangnan to organize immigration.

Silver cannot be used directly; it needs to be converted into various goods.

The Suzhou-Songjiang New Area has an advantage in this respect. Each industrial park relies on the corresponding industries in Jiangnan and can produce almost all the daily necessities except for grain.

Thanks to Liu Lishun's efforts, the Imperial Household Department, which was responsible for procuring these supplies, agreed to transfer a portion of the orders to the Suzhou-Songjiang New Area.

The premise is that the products in the new area must be of acceptable quality and the prices must be low. Provide as many products as possible while ensuring they are barely usable.

Liu Lishun pushed the price down so hard that some businessmen in the new district accepted the order.

Then, he set his sights on the reconstruction of Liaodong and Liaoxi, as well as the supplies needed after the disaster victims were relocated there.

Suzhou-Songjiang New Area doesn't have much of an advantage in this regard, because the reconstruction of both areas requires more timber, bricks, cement, steel, etc.

These are not the advantageous industries of the Suzhou-Songjiang New Area; they can only provide some work gloves and other goods.

Some businessmen did go to other places to purchase bamboo and tung oil for bamboo-reinforced concrete, and obtained some orders.

However, this would not help solve the employment problem. Liu Lishun preferred that, like in the previous wartime situation, the imperial court would organize the mass production of materials, which would require a large number of workers.

This is why he has always been very supportive of the recapture of Annam, as it is not only related to his teacher's achievements, but also to the stability of the new region.

However, as a Confucian scholar, he did not want to fight indefinitely, nor did he believe that war would continue indefinitely.

If the war ends again in a few years, will the Suzhou-Songjiang New Area face a new crisis?
After much deliberation, Liu Lishun finally found a new solution and presented it to the emperor, saying:
"Your Majesty, I humbly request that you establish a special company to be responsible for the procurement of supplies for immigrants."

"As far as I know, the disaster victims are not completely destitute, nor do they lack the need for daily necessities. They simply lack the means to purchase them."

"If the imperial court sets up a special company to purchase these products and then sell them to them at low prices, these people will definitely be happy to buy them, and the new district will be able to sell more products."

Zhu Youjian greatly admired his spirit in actively seeking solutions for the new district's industries.

However, he hesitated about this approach and asked:

"The idea of ​​purchasing and then selling at a low price is quite good."

"But I'm afraid some people will deceive their superiors and subordinates to profit from it."

"If procurement becomes purchasing, and the goods sold are of poor quality and overpriced, that would be another bad policy."

Such practices of purchasing goods by unqualified merchants have led to the bankruptcy of many businesses.

Therefore, Zhu Youjian always imposed strict restrictions on procurement, requiring that suppliers be allowed at least 5% profit.

Selling below cost price is considered malicious competition and will be subject to legal action.

Liu Lishun had lived through that era and naturally knew the harm of purchasing by unqualified merchants, but he insisted:
“Company-mandated procurement is a bad policy, but procurement is not.”

"As long as we insist on leaving profits for merchants and give them the option to withdraw, it will not become forced procurement."

"Your Majesty must not throw the baby out with the bathwater; you should use its advantages and eliminate its disadvantages."

That does make some sense, Zhu Youjian said thoughtfully.

"Giving merchants the right to choose, and giving purchasing companies the right to choose, will prevent it from becoming a forced procurement by suppliers."

"However, it is highly likely that procurement personnel will deceive their superiors and line their own pockets. We need to establish sound rules and regulations to limit this as much as possible."

"What Liu Qing said makes sense; we should use its advantages and eliminate its disadvantages."

Thinking of this, he gave the order:
"I will have the Imperial Household Department cooperate with the Ministry of Works and the Court of Imperial Stud to establish a supply and marketing group."

"The supply and marketing group can set up purchasing companies, sales companies, and logistics companies in various provinces to be responsible for procurement, sales, and transportation, and build up the supply chain and sales channels."

Following the practices of later generations, supply and marketing groups were established.

In the Ming Dynasty, where the commodity economy was not deeply rooted, the market needed to be actively developed.

Zhu Youjian ordered Wang Chengen to be summoned and instructed to explain to Liu Lishun the inner court's management methods for suppliers. Zhu Youjian said:
“Every item in the inner court now has at least two suppliers.”

"The supplier with the best quality and lowest price gets the most orders, while other suppliers provide special categories."

"Supply and marketing groups can disregard special products and simply compare prices from three suppliers to place an order with the one offering the best quality at the lowest price."

"Then we take this product to other suppliers to see if they are willing to produce it at the same price and quality. If they agree, we purchase a batch for our local sales companies to choose from and sell."

"If the product feedback from a certain factory is good, then we increase the order. All procurement is variable, and each party has the right to choose."

Apply the theory of choice to formulate procurement methods for supply and marketing groups. Prevent them from abusing their power to engage in coercive procurement practices.

At the same time, it was necessary to prevent merchants from colluding to monopolize and supply inferior, overpriced goods. Therefore, Zhu Youjian required that each type of commodity have at least three suppliers, who could not be in the same location and could not have any substantial alliances.

This will mean that some orders will not be placed in the Suzhou-Songjiang New Area, but as the location of the South Zhili Purchasing Company, it will still be the main source of procurement.

Liu Lishun wanted to help the soon-to-be-established supply and marketing group by first setting up the purchasing company in Nanzhili.

He was extremely excited when he heard this, because it was a form of support for the Suzhou-Songjiang New Area.

With this policy, businessmen in the new district will naturally have a geographical advantage when competing to become suppliers for the supply and marketing group.
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Of course, to ensure products sell well, it's also crucial to guarantee the smooth sale of materials procured by the supply and marketing group. Having experienced the sudden end of the wartime state and the resulting impact on the new industrial park, Liu Lishun fully understands why the emperor said that transforming commodities into currency was a perilous leap.

For businesses and industrial enterprises, the most important thing is to sell their products. Otherwise, poor circulation will lead to the accumulation of costs in various aspects, and products with a shelf life will become waste.

This determines that the core of the supply and marketing group is sales; without sufficient sales capabilities, procurement is naturally out of the question.

When asked about this issue, Zhu Youjian said:
“Local sales companies can cooperate with post stations, inns, and even merchants selling groceries to establish sales outlets in various places.”

“These sales outlets are just agents. All the staff must be trained, and the purchase price and selling price of the goods must be clearly marked. They are not allowed to change them without authorization.”

"My requirement is that the overall selling price at each distributor should not exceed 10% of the purchase price. Slight fluctuations are acceptable, but the overall profit margin must be controlled, and we should win through scale."

"The more goods they sell, the more money they earn. Don't even think about cheating and swindling to make a quick buck; otherwise, the supply and marketing group will hold you accountable."

"Sales channels must be strictly managed."

Drawing inspiration from the later practice of Pang Donglai, Zhu Youjian decided to make everything public. He even required local sales companies to disclose wholesale and suggested retail prices in local newspapers.

To prevent some sales outlets from deceiving their superiors and causing public distrust of the supply and marketing group.

Liu Lishun and Wang Chengen were both puzzled by this. Although they didn't agree with earning excessive profits, they believed that businesses needed to make money, and if profits were restricted, how could the supply and marketing group grow?

In response, Zhu Youjian said:
"What the supply and marketing group really needs to do is reduce intermediate costs such as logistics, and obtain more profits through cost reduction and efficiency improvement."

"I hope that the final retail price can be controlled within 1.2 times the purchase price in the future."

"We can even sell products locally based on their place of origin, keeping the price of daily necessities at 1.1 times the cost."

"We should minimize the profit margin on these products and instead focus on generating profits through scale."

"Goods that are easily damaged or use new technologies can be sold at a higher price with appropriate flexibility. However, the highest selling price shall not exceed 1.5 times the purchase price, and no excess profit shall be made."

"The stores and sales outlets of the supply and marketing group should be low-priced stores. The purchase price and the selling price should be open and transparent so that people know they won't get a bad deal when they buy from them."

"As long as the scale is large enough, sufficient profits can be earned."

As he spoke, he discussed the nature of the supply and marketing group, explaining to Liu Lishun and the others:

"I recently discussed with Zhang Pu the concepts of technology-driven enterprises and business-driven enterprises."

"Logically speaking, a supply and marketing group should be a business-driven enterprise."

"But my requirement for the supply and marketing group is to become a technology-driven enterprise."

"Use technology to continuously improve logistics and management, and reduce intermediate costs."

"Its purpose is not to make a profit, but to provide goods to the people, to provide orders to factories, and to facilitate the circulation of goods and money."

"It can be said that it provides basic services and should be treated as a public service enterprise, just like a plumbing company."

"I do not require it to make a lot of profit; what is important is to expand its scale and improve management. Bonuses for managers and technicians will be distributed according to the scale and the reduction of intermediate losses."

"I hope that in the future, every place in the Ming Dynasty will have a sales point of the supply and marketing group."

This was his requirement for the supply and marketing group: to streamline production and sales, and unleash the consumption potential of the Ming Dynasty. This would allow factories to produce with confidence and enable the public to buy high-quality, affordable goods.

After hearing this, Liu Lishun and others understood the significance of the supply and marketing group's existence.

However, no matter how significant the significance, it can't put food on the table. If the restrictions are too strict, how can the supply and marketing group expand? Or even survive? These are all questions.

In response, Zhu Youjian also outlined a policy, explaining to them:
"I will have the Sihai Grain Store and the Grain Group provide grain at affordable prices to the Supply and Marketing Group and collect grain coupons on their behalf."

"In the future, people who receive grain coupons will be able to purchase grain at the designated sales points at a fair price. Later, other categories such as salt, pickles, cooking oil, tea, and coal will also be added."

"We must be able to provide all the necessities of life, such as firewood, rice, oil, salt, soy sauce, vinegar, and tea."

"In addition, the textile industrial park in the Suzhou-Songjiang New Area should produce more fabrics and needles and thread to ensure high quality and low prices."

"Furthermore, the supply and marketing group can cooperate with logistics agencies to establish military service stations in local garrisons and barracks, providing services such as commodity sales, grooming, and sewing, specifically targeting military and civilian households in garrisons and active-duty soldiers."

"In this regard, we must also be subject to the supervision of the Military Supervisory Administration to prevent the sale of morally corrupting items that could corrupt soldiers, and we must not allow the use of substandard products to harm soldiers; otherwise, we will pursue the matter to the end."

"The prices of goods supplied to military service agencies are managed according to wartime procurement regulations, and profits are strictly limited."

"The same applies to other procurements within the supply and marketing group; they are all managed according to wartime procurement practices, except that profit margins are appropriately relaxed, allowing for the sale of in-demand goods at higher prices."

"You can treat the Supply and Marketing Group as a company that has been operating under a state of war. I will allow the Logistics Department to also hold a portion of the shares."

This explanation finally made Liu Lishun understand the significance of the supply and marketing group, and he was very satisfied.

With these businesses, the supply and marketing group has a solid foundation and can establish itself without any problems.

The sales of goods in the Suzhou-Songjiang New Area are also now supported. There is no longer any need to worry about the wartime state suddenly ending and the produced goods becoming unwanted.

Especially considering that establishing garrisons in Liaodong and other places would definitely require a large amount of supplies, he decided to urge the supply and marketing group to cooperate with these places as soon as possible and establish local sales companies.

Especially for disaster victims rebuilding their homes, supplies are needed. Previously, this area was very disorganized, and it was difficult to sell anything. Now, with military service centers and sales outlets, it is finally possible to sell these supplies.

Shen Tingyang's newly assembled fleet is perfectly suited for transportation, and logistics companies can outsource this aspect to them.

All of this led Liu Lishun to foresee that the construction of the Suzhou-Songjiang New Area would accelerate further, and factories in various industrial parks would once again spring up like mushrooms after rain.

At this moment, he sincerely felt that the emperor's wisdom was as deep and boundless as the ocean, far more comprehensive than any specialized company he had initially envisioned. (End of Chapter)