Journey 1995:Non-Stop

Chapter 367 Winning the Bid
On the wall of this conference room was a banner that read "Bidding Meeting for a Certain Construction Project". There were about 15 supplier representatives present, and each company was only allowed to send two people in.

The public announcement of bids is one of the most crucial steps in the entire bidding process. Its core purpose is to ensure fairness, impartiality, and transparency. The atmosphere at the event was quite solemn, and some people were even recording the entire process with their equipment.

Everyone sat down as required. There were three people in total: the bidding leader and the host, and two people responsible for recording and filming.

"The following is the tender document from Company A. Company Name: Tender Price, Delivery Time, Quality Standards." The person reading the tender document began.

With such a thick tender document, the bidding party is actually most concerned about the price, because everything else is about the same.

Yan Hui's cost of goods, including freight and taxes, was 3640 yuan per ton this time. His bid was 3679 yuan, while everyone else's bids were all above 3760 yuan. When Yan Hui heard the previous bids, he knew he had it in the bag.

Whispering was not allowed at the event, but since many people knew each other, they still exchanged glances. Of the many people who came today, quite a few were actually just there to cause trouble, offering outrageous prices—some even quoting around 3900 yuan.

Many people don't quote unit prices. We need 7500 tons of steel. If we calculate it at 3800 yuan per ton, it would be 2850 million yuan; if we calculate it at 3760 yuan per ton, it would be 2820 million yuan.

Yan Hui sat calmly, and half an hour later, the bidding staff read his bid.

"The total price is 27592500 yuan, and the unit price is 3679 yuan per ton," the staff member announced Yan Hui's price.

As soon as the price was announced, the previously quiet room was filled with gasps of amazement, and everyone's eyes turned to look.

Before Yan Hui, no one had set the price below 2790 million. Before Yan Hui, only two people had set the price below 2800 million: one at 2795 million and the other at 2798 million.

Yan Hui's offer was 2759.25 yuan, which was more than 35 yuan lower than the lowest price, a full percentage point lower!

Moreover, the price of 3679 yuan per ton has left many people feeling hopeless, as most people's capital costs are more than that!
This Mr. Yan, it's all his own money? He just needs to outpace the loan interest? How is that even possible?

After the price was announced, even the recorder couldn't help but glance at General Manager Yan. Many of the people from the construction group knew General Manager Yan and knew that he was the one who had submitted the bid. Yan Hui hadn't informed his superiors beforehand, which had put everyone in a somewhat awkward position.

If the price is about the same, should we give it to Yan Hui? Since they're such good friends, why didn't anyone give them a heads-up beforehand?
It should be noted that many others have already conveyed their messages through various means.
Now that I see this price, things suddenly become simple.

Seeing that Yan Hui remained calm, the recorder knew that Yan Hui had not made a mistake in the numbers, and then took out the next tender document and began to read it aloud.

It took about an hour to read all the tender documents.

When companies present their bids, they only read out the key information in the bid documents. This does not represent the review results, nor does it involve in-depth discussions on technical solutions, detailed qualifications, etc. There is still a selection process afterward.

During this process, if a bidder has any objection to the content of the bid announcement, they can raise it on the spot, and the host will verify it.

Today's situation was completely unexpected; no one anticipated that someone would suddenly appear and almost kill the game. Steel supply is too transparent; this isn't construction subcontracting. In construction subcontracting, a low price isn't always useful, because the quality of the construction later is crucial. However, in steel supply, as long as it's a steel mill approved by the construction site, price is the top priority.

If it's a government tender, the lowest price isn't necessarily the best. The government will consider many factors about suppliers, including their ability to supply continuously and their quality control. If you submit a very low price, the government might not trust you.

Government tenders typically involve thorough market research beforehand. Because the government has access to a wealth of real-world data, their market research is highly accurate, resulting in precise reference prices. Therefore, in the government tender process, the closer the price is to the government's estimate, the better.

Businesses don't waste time with nonsense. If it's the same product, and you're offering a cheaper price, why wouldn't I buy the cheaper one? I don't care if you make money or not; I'm just saving money.

After the competition, Yan Hui didn't communicate much with others because no one wanted to communicate with him anymore. Most people thought Yan Hui was a bit crazy, but no one said there was anything shady going on.

Many of the secondary agents were impressed. Everyone understood that Yan Hui had absolutely used all his own funds; otherwise, he wouldn't have been able to quote such a price.

"No wonder they were able to get the first-tier agency for Laiwu Steel." "They must have been determined to win the first bid, so let's just give them face." "They must have a good relationship with Jian'an Group to offer such a damn low price."
Similar sentiments have been passed down among many people, with mixed opinions. The only consensus is that this deal is indeed unwinnable.

If someone else wins the bid in this situation, no one will acknowledge it.

Currently, the steel market is experiencing growth in both demand and production, and the market is constantly expanding. Against this backdrop, doing business isn't that difficult. Especially now, with a year to go before the "four trillion yuan stimulus package," very few people have that much readily available capital.

Mr. Yan easily secured this order. Following that, Yan Hui participated in two more bidding processes and successfully won one of them.

Among those who didn't get selected, Yan Hui's bid was actually one of the lowest, but obviously his connections weren't that good, so it was understandable that he didn't get selected in the end.

These two orders require a total of 1.1 tons of steel. Jian'an Group requires delivery within four months, while the other company requires delivery within three months. The monthly capital requirement is approximately 1000 million yuan, which Yan Hui can conveniently avoid by taking out a loan.

With these two deals, Yan Hui had already secured a large portion of the first-level agency qualification, but he was far from satisfied and needed more deals.

Yan Hui transferred almost all the money in his account to the steel mill, and the steel mill quickly started shipping.

At Laiwu Steel, several thousand tons of steel are handled like a game; they can just pick one from the storage yard. Most of them are 16mm or thicker rebar for construction.

Because it was his first time trading steel, Yan Hui made a special trip to Laiwu Steel and personally witnessed rows of heavy trucks carrying steel leaving Laiwu Steel and heading towards Jinan.

This scene was just like the trainload of timber back then. Yan Hui liked this scene very much, and he loved watching it. Dozens of trucks lined up to leave, all fully loaded with steel, so their engines were roaring. These trucks were carrying the goods he had bought, and this feeling was truly fascinating.

Although the chemical industry was profitable, it couldn't give him this feeling. What Yan Hui had lost in the timber industry years ago, he was finally getting back.

(End of this chapter)