Chapter 77: All-In

"Dongling High-Tech needs to acquire another electronics manufacturing facility in Yangcheng as our new production center!"

Li Dongling looked at Gao Peng and spoke these words; the production capacity of the Pingyang electronics park had already reached its limit—seven hundred thousand electronic pets produced daily—and further increases could no longer be achieved merely by adding production lines, but required expanding factory space.

The factory currently used in the electronics park was a temporary, makeshift structure; the true production facility was still under urgent construction.

To increase production capacity as quickly as possible, we must acquire another private electronics factory in Guangdong Province—this is the fastest way to ramp up output.

But establishing a production center in Yangcheng also means building a local supply chain for components, and the emergence of counterfeit, pirated, and cloned electronic pets is inevitable.

These things are merely a matter of time; whether domestic electronic pets will be diverted to overseas markets due to their low domestic pricing is certain to happen—let alone electronic pets, in my past life, every electronic device, appliance, garment, or shoe had counterfeit versions bearing big-brand labels sold abroad.

But smuggling domestic goods overseas remains a small-scale operation; electronic pets come in multiple language versions, and the domestic version is Chinese—even if sold abroad, the user experience won’t improve much.

Currently, what is the status of electronic pets overseas? They represent more than just an electronic product—they are a cultural trend, the central topic of entertainment and gatherings for countless young people.

When someone shows up with a pirated, cloned device in a completely different language, what happens? Whether they’ll be mocked is uncertain, but they’ll certainly feel anything but comfortable.

Moreover, Dongling High-Tech’s electronic pets are sold overseas primarily through Ning’s Trade Company, Bandai, Toys “R” Us, and Hamleys; as long as these sales channels don’t carry pirated or domestic gray-market units, Dongling High-Tech’s profits won’t be affected.

In chaotic regions like Russia, oversight may be lax, but in Japan, America, and Britain, logistics companies and retail stores transporting pirated or gray-market electronic pets can be sued, and even domestic sellers can be prosecuted through local customs, their overseas payment accounts frozen, and so on.

There are countless methods—only the question is whether it’s worth the cost to crack down on these shady companies. Minor violations can be ignored, but if any counterfeiters truly intend to steal Dongling High-Tech’s overseas market share, it’s time to deal with them.

If we truly couldn’t handle these counterfeiters, then in my past life, some brand of shoes would have flooded the entire world and crushed Adidas and Nike—but the result? The OEMs remained OEMs, never replacing the real brands.

Perhaps a few individuals in certain industries have profited from counterfeiting, but they are always the minority.

There’s no such thing as a free lunch; during the peak of cross-border e-commerce, many people boasted about selling counterfeit shoes and clothing overseas, claiming to earn hundreds of thousands of dollars a month—but those who believed them, spent large sums buying goods from these boastful sellers, then arranged logistics and customers, endured immense hardship to ship them abroad, dreaming of collecting hundreds of thousands monthly.

Then… there was no “then.” Once goods were sold, payment had to be collected—whether via PayPal or any bank account, one freeze and that was it. When asked if they’d made money, they all stayed silent.

"I understand!"

Gao Peng nodded in agreement; he knew Li Dongling was sending him to Yangcheng to build another production center for Dongling High-Tech.

The next day, Ma Yingxian and a group of distributors were led into Dongling High-Tech’s office building—this was their first time entering here, and before they could even look around, they were ushered into the conference room.

So many distributors had come that the sizable second-floor conference room was packed to capacity.

Zhang Ao, representing the Sales Department, attended this distributor conference on behalf of Dongling High-Tech.

"Everyone can first review the Dongling High-Tech distributor contract; if you have objections, raise them now—if you can’t accept it, you may leave now!" Zhang Ao said.

"You want a deposit? If retailers under our distribution raise prices, we’re held responsible?!

With so many retail stores, how can we possibly monitor them all? Isn’t this just a scheme to seize our money?!

This is a tyrannical clause—you might as well just seize our money outright and let me walk away!"

One distributor, after reading the "tyrannical clause," stood up in anger, clearly ready to leave at the slightest provocation.

But Zhang Ao still smiled; he was never one to be intimidated—he’d dealt with countless such distributors when recruiting satellite dish agents in other provinces, knew exactly what kind of people they were: if there was money to be made, they’d swallow humiliation willingly, let alone a "tyrannical clause"—if there was no profit, they wouldn’t even glance at Dongling High-Tech.

"Anyone else who doesn’t accept the Dongling High-Tech distributor contract may leave now—travel expenses will be reimbursed by Dongling High-Tech’s Finance Department!"

Zhang Ao looked at the distributors present; if a distributor had only one or two retail stores secretly selling electronic pets at inflated prices, that was an isolated case and Dongling High-Tech wouldn’t confiscate their deposit—but if an entire region under a distributor was openly and massively selling at high prices, the distributor was undoubtedly involved.

The distributor who had just shouted about the tyrannical clause, seeing no other distributors join him in protest, awkwardly sat back down; leaving now would mean losing everything—controlling his retail stores from selling at sky-high prices wasn’t impossible, only a matter of will.

"This distributor contract reflects the will of Dongling High-Tech’s CEO Li—anyone wishing to distribute electronic pets must abide by it!"

Zhang Ao’s expression turned stern, "Dongling High-Tech has left distributors and retailers ample profit margins; the unified domestic retail price for electronic pets is 68 yuan, and each unit grants distributors and retailers nearly 25 yuan in profit—this profit is already more than sufficient!"

Setting the domestic price too high would only make pirated units cheaper by comparison; the higher the price, the more rampant counterfeiting becomes—it’s better to set a firm domestic price from the start.

As for Dongling High-Tech’s own profit share, Li Dongling, Hu Zi, Yao Luoying, and Zhang Ao had debated long and hard yesterday, and ultimately Li Dongling overruled all objections and allowed Dongling High-Tech to reduce its domestic profit margin on electronic pets.

With mass production, the cost of electronic pets has dropped from the original 60–70 yuan to around 30 yuan when including production, transportation, and warehousing; as manufacturing matures, costs will fall further—eventually, each unit may cost only a few yuan. In my past life, counterfeiters made profits selling units for just over ten yuan; there’s no reason Dongling High-Tech’s cost should be higher than theirs.

Even at the current cost of 30 yuan and a retail price of 68 yuan, each unit yields a profit of roughly 38 yuan; Dongling High-Tech takes 13 yuan, leaving 25 yuan for distributors and retailers.

To ensure distributors honor the agreement, we can’t rely on empty promises—we must let them earn real money, otherwise, sending personnel to monitor every city across China would require an impossible number of staff.

"Whoa!"

Hearing that Dongling High-Tech was giving them 25 yuan profit per unit, distributors who had previously complained now wore smiles; though they’d have to split this with retailers, they’d take the lion’s share—and if electronic pets reached overseas popularity levels, they’d make a fortune.

As the bidding for distributor rights began, all present became rivals, competing fiercely.

Some distributors initially held back, hoping for bargains, but when the Hangzhou distributorship alone reached 3.25 million yuan, they could no longer wait.

Competition intensified dramatically for Beijing, Shanghai, and Yangcheng; Yangcheng’s bidding was especially fierce, peaking at 820,000 yuan—Zhang Ao himself was stunned, for this was merely the rights to one city.

In the end, Yangcheng’s distributor rights sold for 830,000 yuan; no one else could raise the bid further.

The bidding for distributor rights lasted until afternoon, concluding entirely; the fiercest competition was for coastal provinces and major cities like Beijing and Shanghai, while inland city rights were less intense, and border province rights sold for under a million yuan.

Yet the total value of all distributor rights sold reached 37 million yuan, setting a new national record for distributorship sales in beverages, health supplements, and electronics!

"Zhang Zong, you must ship our goods as soon as possible!"

Chen Zuhan, who had paid the astronomical price of 820,000 yuan for Yangcheng’s distributor rights, said to Zhang Ao after signing the contract.

Chen Zuhan had gambled everything for Yangcheng’s rights; though wealthy, raising such a large sum of cash at once was no small feat—he’d staked everything on this single bet, hoping to make a fortune from the distributorship.

Remember, signing Dongling High-Tech’s contract required not only the distributor fee but also a deposit equal to roughly half that amount—Chen Zuhan had to pay 1.23 million yuan in cash. He certainly couldn’t cover it all himself and had to secure bank loans; such a massive sum was undeniably risky.

Two more chapters this afternoon!

(End of Chapter)