Spring Breeze Twenty Years

Chapter 974 Main Job and Side Job

After thinking about it for a long time, Xiaowei finally realized that there was something wrong with his thinking.

The purpose of developing real estate is to open shopping malls. Shopping malls are places to sell goods, and profits come from retail; the shopping mall is the core business. The purpose of opening a food factory is to supply cake shops; cake shops are the core business. Supermarkets rely on a wide variety of products and low prices, so why compete with a single instant noodle manufacturer like Master Kong?

They own their own buildings, shopping malls, and cake shops. Producing instant noodles is just to enrich the products in their own stores. They never thought of becoming the strongest in the province or the country. Supplying their own shopping malls is enough to achieve their goal. If they have extra capacity to expand outwards, that would be extra profit. Is it necessary to build a large factory?

Picking up his pen, Xiaowei wrote the word "channel" on his notebook. "I work in shopping malls and retail channels. Even the biggest manufacturers need channels to sell their products and need retail outlets. As long as we strengthen our channels and fill up the retail outlets, why would we need to compete with instant noodle factories?"

So, should we build an instant noodle factory or not?

Xie Xiaolong said that Master Kong invested eight million US dollars in Tianjing, which is close to fifty million RMB. With fifty million RMB, they could acquire a plot of land in any city outside of Fengtian and build a commercial plaza within two years. At that time, there would be four shopping malls, a hotel, and some office buildings.

Selling the residential property, after deducting all investments and expenses, will still yield a profit of at least ten to twenty million. The shopping mall, office building, and hotel are actually free, and the profits are earned. Furthermore, the residential property's consumer spending drives the revenue of the shopping mall and hotel, ensuring stable and sustainable profits in the future.

By strategically expanding supermarkets throughout the city, filling the gaps with convenience stores, and complementing them with shopping plazas, one could potentially control the daily consumption of half the city. Add to that cake shops and car dealerships, and it's far more profitable than investing in an instant noodle factory.

Xiao Wei tapped his pen lightly on his notebook, calculating in his head. Investing the same amount of money in an instant noodle factory would take about two years to break even, or even longer, because of daily operating costs and taxes. Of course, in reality, the calculation is much more complex than that.

However, the difference becomes apparent. Two years later, he would need another two years to earn back his second investment, while he replicated the city. Without considering the increase or decrease in value, ten years later, he would have earned at least four times his initial investment, and he would have captured the retail market, department stores, hotels, office buildings, and birthday cake market in five cities.

Besides the first two years, for the next eight years, he also had a steady stream of profits that doubled every two years.

Without increasing his investment, in the tenth year he would still be earning back his initial investment, while earning at least a third of the daily expenses of the five cities.

Xiao Wei casually circled the word "channel" in his notebook, thinking that this path was still the most convenient.

There's another crucial point here: as an investor, you'll receive preferential policies and benefits in each new location. However, when selling products, aside from the initial investment, you can only generate revenue through the products themselves, and you're also subject to market fluctuations and competition. There are simply too many uncontrollable factors at play.

Xiao Wei turned his head and looked at the map. Northeast, North China, Eastern Inner Mongolia. As long as he built commercial plazas all over these places, whether it was instant noodles or refrigerators, they would have to be sold through him. What else was there to talk about?

Therefore, you only need to keep up with your own pace. There's no need to compete with others. The world is so big, the market is so big, and there will never be a shortage of competitors. Why bother yourself because of others?

Of course, this all depends on your own continued efforts. Keep it up!

If you don't do your own job well and just keep staring at others, you'll only lose your composure and fall further behind. In the end, you'll only be able to give up your position and passively chase after others.

Xiao Wei picked up the phone and pressed the internal call button to speak with Shi Li: "Shi Li, could you find out how many instant noodles all our stores produce each day?"

Shi Li said, "Please wait a moment, let me look through it." After rummaging through it for a while, she said, "Last month, the total sales of instant noodles were 361,600 packs, of which 53,300 packs were from distributors, and the rest were from our own stores."

Xiao Wei asked, "A consignment shop? You mean the small store outside?"

Shi Li said, "Yes, convenience stores and grocery stores. The records here are because of production capacity; they mainly supply their own stores. Otherwise, the sales volume of the consignment stores wouldn't be so low."

Xiao Wei hung up the phone, picked up a pen and did some calculations. Based on the current sales volume, he estimated that supplying the three northeastern provinces would require a daily output of at least 200,000 bags. Adding the output to North China and Eastern Inner Mongolia, he estimated that a daily output of 500,000 bags would be barely possible.

He picked up the phone and called Han San: "Third Brother, do you know how much Master Kong instant noodles are produced daily in Tianjing?"

Han San: "...Am I a god? How much money did he invest?"

Xiao Wei said, "It's supposedly eight million US dollars, but less than fifty million."

Han San asked, "Do you know how big the factory is?"

Xiao Wei said, "What Brother Long meant was that it should be about 200 acres, but there are some supporting factories."

Han San thought for a moment and said, "It should be between 1.3 million and 1.5 million, including all costs. He can't afford small equipment. The largest custom-made equipment now can reach 120,000 per day, eight hours a day. Generally, the investment ratio for machines is about 0.15, so his project only has five production lines."

Xiao Wei said, "My sales last month were 360,000 units. If I only supply Northeast and North China, would a daily production of 500,000 packs be enough?"

Han San said, "Wait a minute, I'll get a pen." He mumbled and calculated for a while, then said, "It's not enough. Let's double it. Five hundred thousand packs is about right for the Northeast. If you ask me, you should set up five production lines. We need to leave some surplus in production. Besides, the economy is developing so fast these days. Who knows what things will be like in three or five years, right?"

Xiao Wei said, "I never thought about selling nationwide. I just wanted to supply my own market and then take it with me to other markets."

Han San said, "Just go with the five lines, trust me. Buy a bigger plot of land, you're not short of money anyway, buy 300 acres, if it doesn't work out, you can do something else, besides, you're not going to make noodles, are you?"

Xiao Wei said, "Noodles? I haven't thought about that. There are many places that produce noodles. What's the point of competing with them?"

Han San said, "No, that's not the case. You're just supplying yourself, right? It's just a matter of a few machines and a few workers. We're just sitting around doing nothing anyway."

Xiao Wei said, "Looks like there's something I can't ask you. You're too unreliable. You can bring up anything related to selling equipment, and you're always thinking about your own little things."

(End of this chapter)