Tech giants start by disassembling systems

Chapter 17 Seeking Goods

At nine o'clock on Monday morning, Meng Xiaosui's phone had been ringing non-stop since she sat down.

Instead of reports from the field sales team—those were scheduled for fixed evening summaries—it was a series of calls from distributors.

They were all the old distributors we had worked with before.

To be precise, it refers to the 32 distributors who collectively stopped purchasing goods after the Zhao Guoqiang incident, but were later brought back by the quality of the F2 standard version.

They called not for the standard F2 – which is still shipping at the normal pace – but for the work version of the F2.

"Manager Meng, several of my clients have asked about your 1999 worksheet. Could I order a batch?"

"Manager Meng, I heard you've released a drone specifically for wedding planning? All the wedding shop owners around here are asking about it."

"Manager Meng, the working version sells for 1999 through your official channels. What's the distributor price for me? I'd like to order twenty units to try it out."

Meng Xiaoxi received fourteen phone calls that morning, all with the same content.

After hanging up the last call, she got up and walked to Su Chen's office.

"Mr. Su, the distributors are in an uproar."

Su Chen was looking at the F2 firmware 2.0 development progress document sent by Zhang Lei when he looked up at her and asked, "What do you mean?"

"From this morning until now, fourteen distributors have called to order the F2 working version," Meng Xiaosui said, scrolling through her phone's call log. "Nine of them are old distributors with whom we've repaired our relationships, and the other five are new distributors—they heard about our products from our old distributors."

How much do you want?

"In total, it will probably be around three hundred units."

Three hundred units.

Su Chen leaned back in his chair and thought for a few seconds.

The current inventory of F2 workpieces is only about thirty units, and even with all three assembly lines operating at full capacity, the daily production is only about twenty-five units. The sales team alone has orders booked for two weeks ahead, leaving no extra capacity to allocate to dealers.

and--

"What is the gross profit margin of direct sales through on-the-ground promotion?" he asked.

"Each unit costs approximately nine hundred yuan."

"What if we go through distribution channels?"

Meng Xiaosui thought for a moment: "The dealer price should be between 1500 and 1600, otherwise the dealers won't be willing to sell without making a profit. In that case, the gross profit per unit would be about 500 to 600 yuan."

"More than a third less."

"right."

Su Chen remained silent for a few seconds.

The math isn't hard. With limited production capacity, selling each drone to a distributor means a loss of 300 to 400 yuan in profit. 300 drones translates to a profit difference of over 100,000 yuan.

For a company that has just crawled out of the brink of death, this 100,000 yuan is real survival capital.

More importantly, with the on-the-ground sales model, Hongyuan directly faces end customers, enabling it to receive product feedback and build brand awareness immediately. Relying on distribution channels severs this connection.

"We won't supply them for now," Su Chen decided.

Meng Xiaosui was taken aback: "Not supplying anything at all?"

"Yes. Tell them that production capacity is insufficient and they cannot accept distribution orders at the moment. We'll discuss it again after the new production line is operational."

"Then they might be unhappy," Meng Xiaosui said, "especially those old distributors with whom we've just repaired our relationships."

"I know."

Su Chen's tone was calm but firm.

"But the situation is different now than it was a month ago. A month ago, we were begging them to sell us goods; now they're begging us to supply them. The roles have changed."

He paused for a moment, then added, "Of course, you have to be polite. Tell them we value the partnership and will give them priority once production capacity catches up. But right now, there's really no spare capacity—that's the truth, not an excuse."

Meng Xiaoyi nodded.

She had worked in this industry for several years and had seen too many small brand owners bowing and scraping to distributors. But Su Chen was different—he knew exactly when to bow his head and when to stand tall.

"Okay, I'll call them back one by one this afternoon."

"Wait a minute," Su Chen called out to her. "There's something you could do while you're at it. Compile a list of the coverage areas and customer types of these distributors who have called."

Once the new production line is operational, we will redesign our distribution system. At that time, not just anyone can sell – I will grant exclusive regional authorizations to ensure each distributor has sufficient profit margins, while preventing cross-regional sales and price wars.

Meng Xiaoyi's eyes lit up.

Exclusive regional authorization – This means that each distributor will become Hongyuan’s exclusive agent in the local area, guaranteeing both profits and exclusivity.

This model is common among big brands, but almost no one in small companies dares to do it—because you don't have enough product competitiveness, so why would distributors accept your exclusivity terms?

But the F2 working version is different.

It has almost no competitors at the price point of 1999 yuan.

"Understood." Meng Xiaoyi turned to leave.

"And one more thing," Su Chen called out to her again.

"Those distributors who haven't resumed cooperation since the Zhao Guoqiang incident—there are still fifteen in total, right?"

"Yes, there are still fifteen families who haven't returned."

"Were they among those who called today?"

Meng Xiaosui flipped through the records: "There are three."

"Make a note of this. Stop supplying these three companies for now. Wait until they contact us to discuss it further."

"clear."

Meng Xiaoxi is gone.

Su Chen turned his attention back to the computer screen.

He wasn't intentionally making things difficult for the distributors. Insufficient production capacity was a fact, and direct sales through field visits were also a fact. But he couldn't deny feeling a subtle sense of satisfaction—

A month ago, these distributors collectively stopped ordering goods, almost sending Hongyuan to its grave.

A month later, they lined up to call and ask for the goods.

Life is unpredictable, but it is never without reason.

Su Chen suppressed the thought and continued working. There were still too many things to do; he didn't have time to dwell on any particular emotion.

……

Meanwhile, in Huizhou.

In a camera equipment store on the first floor of the Sandong Bridge Photography Equipment City, the owner, Chen Guoliang, is chatting with a regular customer.

"Old Chen, do you sell those Hongyuan drones in your shop? The one that costs 1999 yuan."

"What Hongyuan?" Chen Guoliang was taken aback.

"It's the one that was selling them at a stall outside your mall a couple of weeks ago! A friend of mine bought one, and it's incredibly stable when it flies; the footage is much better than the camera he rented for over three thousand yuan before. I wanted to buy one too, but when I went last week, that stall was already gone."

Chen Guoliang frowned.

He remembered—a while ago, two young men wearing matching polo shirts had indeed set up a tent in the plaza outside the mall to sell drones. He'd even mocked them at the time, telling the owner of the shop next door, "A drone for less than two thousand yuan? It's definitely a toy."

In hindsight, word of mouth for that "toy" spread much faster than he had imagined.

"I don't have any." Chen Guoliang shook his head. "Why don't you check their official website? Or just buy it when they come next time."

"I checked the official website, and it says 'The working version has a nationwide uniform price of 1999 yuan, and can be purchased at offline demonstration points,' there's no online purchase channel. I can't exactly travel all the way to Shenzhen just to buy a drone."

Chen Guoliang paused for a moment.

Having been in the equipment business for so many years, he understands one thing all too well—when customers take the initiative to ask you if you have a certain product, it's a signal that the product is about to become a hit.

This is the fourth person this week to ask about the "Hongyuan F2 working version".

"Let me ask around," he said to his regular customer.

After the guests left, Chen Guoliang typed "Hongyuan Flyer F2 working version" into the search engine.

There weren't many results, but there were a few posts on drone forums and two or three reviews on short video platforms.

He clicked on a post with the title:

How stable can a drone costing 1999 yuan be? The Hongyuan F2 workpiece surprised me.