2003: Starting with Foreign Trade

Chapter 16 Equity Distribution Plan
"What do you mean by getting something for nothing? I also made some sacrifices, okay? Besides, it's not like we didn't pay you."

This model isn't exactly about getting something for nothing; it's simply about reducing upfront operating costs by acting as a foreign trade salesperson to secure business and then finding a contract manufacturer for processing.

The earliest form of foreign trade was actually "processing with supplied materials, processing with supplied samples, assembling with supplied parts, and trade subsidies".

This was the earliest form of foreign trade in our history, mainly consisting of factories established by Hong Kong and foreign capital, employing migrant workers from the mainland, and exchanging cheap labor for profits.

Domestic enterprises were not very developed at that time, and getting into a factory required connections.

After the turn of the millennium, in addition to joining the WTO, domestic enterprises began to develop vigorously, and the period from 2000 to 2008 can be considered the golden age of foreign trade.

The biggest advantage of domestic enterprises is their cost. Many of these enterprises are even husband-and-wife businesses, with the husband in charge of sales and the wife in charge of factory management.

If we hire a few more workers, we'll have a solid foundation.

Tan Jincheng is currently looking for this model: he will personally attract business while Zhang Xupeng manages the factory and leads the workers in production.

However, a major problem in the early stages was that the two of them lacked sufficient initial capital; they could manage to start a small business with just a few people.

On the other hand, even if things do improve, Zhang Xupeng's current capabilities are a problem.

Therefore, Tan Jincheng initially planned to work with contract manufacturers by providing samples and then adding them to the orders, in order to cultivate a stable customer base.

As for Zhang Xupeng, let's put him in a contract factory for a few days to work on a sewing machine, learn factory management, and give him some experience.

This model is somewhat similar to how smartphones will be developed a few years from now, or even new energy vehicles a decade or more from now.

Design a mobile phone or car, pre-sell it, and then find a contract manufacturer to assemble it based on the number of orders; however, there are some specific differences between these.

In those early, unregulated times, making money was all that mattered. There was no need to be bound by formalities or to formalize everything, as long as it wasn't illegal.

With perfect exchange rates and the industry in its golden age, Tan Jincheng's task is to quickly jump in, make money, and make even more money.

With more capital, you can do what you want to do.

Afterwards, Tan Jincheng gave Zhang Xupeng a basic introduction to foreign trade, explaining how a novice should leave the "newbie village" and what the two of them could do with their existing capital.

These were all based on memories from my previous life, the information I collected during the short two weeks I spent at home, and even some knowledge I gained on the ship.

Since his rebirth, Tan Jincheng has been thinking about his future direction, how to utilize his past life's experiences and knowledge, and how to make money in the current market.

He had made thorough preparations for starting his business. After returning home, Tan Jincheng was not as casual as one might imagine; he had been busy preparing for all of this.

Inside the backpack was even a complete business plan.

Zhang Xupeng had no idea about any of this and was completely stunned; he thought Xiao Tan was amazing, as if she knew everything.

After a while, Zhang Xupeng finally came to his senses: "I was wondering why you were studying English whenever you had a spare moment on the ship. Did you plan this all along?"

While on the ship, Xiao Tan seized every opportunity to talk to foreigners and bought a lot of English books. Zhang Xupeng thought she was preparing for repeating her studies after going ashore.

It seems that Xiao Tan has had this idea for quite some time now, and has already made so many preparations.

"No wonder you rejected my idea of ​​opening a restaurant so readily. It turns out you were prepared all along."

Then Zhang Xupeng thought to himself, "That's not right. You've been preparing for this for a while now, so why didn't you tell me?"

"How would I know what you're thinking? Maybe you still want to study. I only said this because you said you didn't want to study and wanted to open a restaurant."

“That’s true. I only made the decision after I got a beating when I got home. But you’ve made so many preparations, wouldn’t it be a loss to bring me along? You can do it all by yourself. You can just hire someone to help you.”

The fact that Zhang Xupeng said this shows that he is still very rational. There is no problem with brothers doing business reasonably, and there is no problem with making money together.

However, if one party has clearly invested a lot of time and energy in the early stages, and you only need to follow suit and invest money, then you are the one who benefits.

It's okay to take advantage of your brother a little, but the premise is that you should be aware of the situation and not pretend to be stupid after taking advantage.

"What are you talking about? You came to me first when you wanted to open a restaurant. If I want to make US dollars, shouldn't I take you with me?"

"But that's different. I only had one idea at the time, and it wasn't fully formed yet. You've clearly made ample preparations. Even if you miss this Canton Fair, you'll still have time for the one next spring."

Through the popular science explanation just now, Zhang Xupeng now knows that the Canton Fair is divided into spring and autumn seasons. It's not just this major exchange event, but also some others, including some online channels that Tan Jincheng also discussed.

“That’s true, but of course the sooner you make money, the better; besides, brothers united can move mountains,” Tan Jincheng replied with a smile.

"Alright, since you put it that way, I won't say anything more. I'll accept your favor."

"No need for words of gratitude; however, even close brothers should keep clear accounts. Let's discuss the distribution of shares first."

Zhang Xupeng and I are both relatively rational people. In our previous life, we did very well as business partners, and we had equal say and equity.

Although some disputes may occur, they are all resolved perfectly.

It wasn't until Zhang Xupeng found a girlfriend and was preparing to get married that the two discussed starting to separate their households; in Zhang Xupeng's words, they didn't want to be unable to remain brothers because of their respective families.

Indeed, that was the case. In his previous life, Tan Jincheng had seen many business partners break up unhappily because of pillow talk.

It's not entirely because of women. When men are single, they don't care whether they earn more or less, but after they have a family, their sense of responsibility changes.

There are many aspects to consider, and with the addition of some external factors, it's normal for disagreements to arise.

In their previous life, their business wasn't very big, so it was easy for them to separate and start their own business. But in this life, Tan Jincheng couldn't guarantee that they would separate again.

Therefore, it is essential to have a certain degree of say in the company's operations.

A legitimate company can have several founders and many shareholders, but in terms of operation, there must be only one voice.

"You tell me how to allocate it," Zhang Xupeng said nonchalantly, as he didn't know anything about this.

In his view, the equity should be divided equally, but since Xiao Tan had prepared so much in advance, it was only right that she take a little more.

Afterwards, Tan Jincheng explained some company law and knowledge about company operations to him. Having experience running a company in his previous life, he still understood some basic principles.

"In other words, to avoid having two conflicting opinions in business operations, that's exactly the case. What if in the future I want to sell a batch of goods to the US, and you want to sell them to Europe? It's not good to listen to either of them," Zhang Xupeng nodded.

At this moment, he was like a blank sheet of paper, but his years of brotherhood made him feel that Xiao Tan would definitely not betray him.

Listening to Xiao Tan is not wrong. Although I am a bit older than Xiao Tan, this kid has been smart since he was a child and can often come up with some clever ideas.

For example, during my junior high school years, one summer vacation I went to Xiao Tan's hometown in the countryside with him. My younger brothers and I wanted to steal peaches from our neighbor's house.

Unfortunately, the other party was taking a nap at home, and if they climbed a tree inside the courtyard wall, they would definitely be discovered.

Just when everyone was at a loss, Xiao Tan came up with a brilliant idea almost without thinking: "I'll run ahead, and a few little brothers will chase after me with long poles, pretending to hit me. When we pass a peach tree, we'll stop and tap it with the pole, and that way we can eat a peach."

When it comes to coming up with ideas, Xiao Tan is the best; you can't go wrong listening to him.

(End of this chapter)