When it comes to the retail industry, the first thing that everyone thinks of is Wal-Mart, Carrefour, RT-Mart and other lifestyle supermarket chains, but in fact, lifestyle supermarkets are only a part of the retail industry, of course, a larger part.

Other retail giants include pharmaceuticals, home furnishings, appliances, electronics, and more. Even Watson's cosmetics industry is one of them, and there are many types.

In later generations, the biggest giant in the furniture industry is Home Depot, which was founded in the late 70s, but did not succeed in developing the domestic market, so the domestic reputation is very low.

It is said that the founder of Home Depot, in the early stage of entrepreneurship, spent a long time researching Costco before creating his own business model.

"How did you meet?" Chen Zhiwen asked.

PIERCE SMILED: "BERNIE USED TO BE A PROFESSIONAL MANAGER OF A HOME FURNISHING BRAND HANDY DAN IN THE UNITED STATES, SERVING AS THE CEO, AND I HAVE KNOWN EACH OTHER FOR MANY YEARS, LAST YEAR, HE LEFT HANDY DAN, WANTED TO DO HIS OWN HOME FURNISHING COMPANY, ORIGINALLY HE WANTED TO RENT A PLACE IN COSTCO, BUT I DON'T THINK IT'S GOOD, BECAUSE COSTCO IS A MEMBERSHIP MODEL, FOCUSING ON SERVING VIP MEMBERS, THE NUMBER OF MEMBERS IS MUCH LESS THAN TRADITIONAL SUPERMARKETS, AND THERE MAY NOT BE MANY PEOPLE WHO NEED TO BUY HOME FURNISHINGS, Not in line with his business needs.

Later, he spent a few months at Costco observing, trying to learn about Costco's business model, and finally he came up with his own business model, which Bernie will introduce later. ”

"Okay." Bernie nodded and said: "Mr. Chen, during my time working at Costco, I have communicated with many customers, and found that they often want to buy new furniture, or need a small renovation of their home, but the cost is too high, an ordinary wardrobe is three to five hundred dollars in the United States, even if it is Costco's unique procurement model plus transportation integration model, there is no way to reduce too much cost."

The fundamental reason for this is that from the manufacturing plant to the terminal sales location, the transportation cost is too high, the first is that the cabinet is very large, too much space, a container can not fit much, even if the container is full, there is not much weight, maybe only one or two tons, but the transportation cost is similar to other goods dozens of tons.

The second is that the wooden cabinet is already a finished product, the appearance has been treated, can not be damaged, can not be bumped, can not bask in the sun, can not be drenched, in order to protect the appearance, in the loading and unloading, transportation and even in the supermarket warehouse, you have to be very careful, these will eventually be transferred to the cost.

And the complete wardrobe, from the supermarket to the customer's home, also requires a lot of costs, the handling is too troublesome, very labor-intensive, this piece also needs to be paid by the customer.

So my plan is to build a supermarket, specializing in the introduction of wardrobe boards, connecting tools, processing tools, exterior paint and other supporting items, and then manual, any person, can take these materials home, and then spend an hour or two to assemble it, so that the supermarket does not need to purchase furniture from the furniture company, but buy a variety of wooden boards, this kind of wooden planks are cheap, the transportation efficiency is very high, a car can be loaded with dozens of tons, and there is no need for special care, waterproof on the line, the customer bought it, Basically, you can transport it to your home by your own car, and you don't need to spend extra money to find someone to transport it.

Not only wardrobes, but also other sofas, beds, chairs and even all decoration materials can be operated in this way, so that everything that can be separated can be separated to reduce transportation costs, and the only trouble that will increase is that customers need to take some time to assemble.

But a lot of people in the United States have a lot of time, and a lot of people like to do it themselves, and you can buy something for three or five hundred dollars for thirty or fifty dollars, and I think most people will welcome it. ”

"Your business model is very good." Chen Zhiwen nodded.

In fact, Home Depot, he also knows, including the later electronic retail giant Best Buy, these are the kings of the subdivision, and the annual turnover in the future will be as high as 100 billion US dollars.

Electronic product retail, and Chen Zhiwen's current main business is very related, and the future funds are sufficient, especially with Costco's talent training in the past few years, it is possible to enter this industry alone, after success, it can also complement Midea and Galaxy Trade, which is one of the strategic directions that need to be invested in the future.

The reason why I didn't invest before or even now is because the funds in the 70s were relatively tight, and they all had better uses, and being able to mobilize funds to make Costco successful is already the ultimate in my ability.

The second is that it is not yet the era of the explosion of electronic products, in the original history, Best Buy is definitely not the only brand that does electronic product retail supermarket, and there are many others, the reason why these chain electronic retail brands appear in large numbers is because of the explosion of personal electronic products led by computers, game consoles, music players, etc.

Only at that time, large-scale investment in the e-tailing industry will form a stable business cycle, otherwise, premature investment will only be pure cash burning, and it will not last at all.

The DIY (do it yourself) furniture retail giant is not in Chen Zhiwen's consideration at all, no one can do all the business, and it is impossible for the traverser to have a memory gold finger, at most when there is a chance, when the company is listed, you can buy a little stock and earn some pocket money to play.

But I didn't expect that the founder of Home Depot had such a deep connection with Costco, and the business model may have been thought of with reference to Costco's minimalist cost control.

Pierce continued: "Eric, I knew you would definitely agree with this business model for the time being, and after hearing Bernie's idea for the first time, I was stunned, it can really save too much cost, and if it really works, it will definitely be a revolution in the furniture industry, and it will have a greater impact on the supermarket industry than our Costco." ”

"I agree with you, too." Chen Zhiwen nodded, Costco is just an optimization and a small number of reforms to the original retail model, the core is to reduce the variety of goods, increase the purchase of individual goods to reduce costs, and at the same time adopt a membership system to lock in most of the purchase quota of member families.

However, Home Depot's business model is to flip the table in the home furnishing industry, and there is no need to purchase the same cabinets in a unified manner, and directly purchase raw materials such as wood boards, connecting mechanisms, and paints, which may reduce the transportation cost to one-tenth of the previous one. It doesn't deserve to be compared at all.

However, the bad thing is that this model is not suitable for Europe and the United States, because only countries like Europe and the United States, the labor cost is high, resulting in everyone having to do all kinds of maintenance work at home, which is why Europe and the United States are the largest hardware tools market, because in Asia, wrenches, pliers, flashlights, basically only appear in factories, and in Europe and the United States, every family will have.

This is also the reason why Home Depot has not developed in the mainland or even Asia in the later generations, and the furniture and electrical appliances here are delivered to the door, and the shipping is very cheap.

But just the European and American markets are enough to raise a 100-billion-dollar giant.

Pierce and Bernie glanced at each other, there was a certain joy in their eyes, Pierce said: "Eric, Bernie's idea is very good, but to complete this plan, it takes a lot of investment, first of all, we must build a large supermarket, not to mention that Costco is so big, at least it can't be lower than Wal-Mart, Celtic This kind of ordinary supermarket, otherwise, the space is too small, you can't put too many goods, there are many types of wardrobes, you must prepare many types, for customers to choose, and the wardrobe is only one of them, Everything else requires a lot of space as well.

The second is to be specially designed, now in the supermarkets for sale wardrobes, cabinets, chairs, etc., are patented, we let users make their own is only to provide dismantled raw materials, but still need to be designed in advance, can not infringe patents, and after the design, also need to be specially purchased from raw material companies, this aspect began to have a lot of varieties, but the amount is very small, so it is more troublesome, that is, more funds are needed. ”

"Costco doesn't have such a supplier, right?" Chen Zhiwen asked.

"No, although we at Costco also sell furniture, we have no connection with the wood panel factory, so we can't help much." Pierce shook his head.

"So, Bernie, how much money do you need?" Chen Zhiwen thought for a while and asked.

"$3 million, of which I will contribute $2 million myself, and $5 million is enough for me to rent two warehouses and recruit people plus procurement funds." Bernie was obviously prepared, and said: "As for equity, I hope I can get 70% of the equity, because I need a controlling stake in the company, and I want to be honest and clear about this now, but out of fairness, we can sign an agreement that after 5 years, I can return Mr. Chen 1 million dollars." ”

"That is, I lend you $1 million alone, invest 2 million, and then get 30% of the stock?" Chen Zhiwen made a simple calculation.

"Yes." Bernie nodded.

"Aren't you afraid that I'll take your idea and start a company like this alone?" Chen Zhiwen said with a smile.

"Because I believe Pierce, Pierce vouches for you, saying you're not that kind of person, and what I'm talking about is just the most basic business model, and there are a lot of details in it, only I know." Bernie said confidently.

"In fact, the so-called details are not very important, your idea is the most important, and other people really operate, even if they are not as good as you, they may have certain achievements." Chen Zhiwen smiled and said: "However, Pierce is right to guarantee, I am not such a person, I can agree to this investment, but there is no need to repay the million dollars borrowed, and then convert it into 5% of the stock, how about it?" ”

If you put your heart and soul into the industry, with this approach, plus hiring professionals, you can theoretically succeed, but what is the upper limit? Whether it can beat the giants of all parties and become the boss of the home retail industry, this probability is basically 0.

Tell an ordinary person all the plot outlines of the Three-Body Problem, then he may be able to write a good book, but he will never be able to write the feeling of the real "Three-Body Problem", because the description of everyone in it and everyone's inner monologue are definitely not something that anyone can write.

What if you have all kinds of ideas? Even if Chen Zhiwen travels to 1995, he can make Alibaba or Teng Xun? Impossible.

It's one thing to have a good business idea, but if you execute it step by step and be able to succeed, that's the business tycoon, and that's the value of someone like Bernie.

At this time, it is better to invest in future successes, besides, this is not a high-tech industry that will be restricted in the future, and it is completely meat with the founder.

Of course, negotiations are negotiations, and you still have to put some pressure on the other party.

"Mr. Chen, if you are given 40% of the shares, I will lose my absolute controlling interest, and in the future, my company will still need to be refinanced and listed, which is not conducive to my peace of mind operation." Bernie put it mildly.

"Understood, but in this way, I can give up this 10% of the voting rights, all to you, and if the future financing or listing, the shares in my hands will be diluted, this part will naturally be reduced, I can tell you, I only value economic gains, I am not interested in management, just say Costco, the current scale is already a little famous in the United States, but I will not participate in the management, Hong Kong, is the focus of my career." Chen Zhiwen said.

Although there are a lot of "gold" industries in the United States, he will not pursue a controlling stake, except for a Costco, this is also because Pierce is old, and he had the idea of selling the company at that time, so he bought it and has absolute control, otherwise, if Pierce is as young as Bernie, then he will definitely only invest.

In addition to Costco, he will make profits in other industries by investing, rather than operating, such as Apple and the future high-tech industry, and the same is true for traditional industries.

Of course, Midea, Red Bull and other branches in the United States are not in this limitation, or in the future, the capital is abundant, and the acquisition of some mature industries will definitely have in the future, which is different from starting from 0.

"In that case, I need to think about it." Bernie thought about it, but still didn't make up his mind.

"There's no hurry." Chen Zhiwen nodded and said, general business investment can be determined in a month is already very fast, Chen Zhiwen also knows the future, otherwise a person who doesn't know what kind of person in the future comes to him to invest, he will also think about it for a long time, and he also needs to send someone to investigate and so on.

"Eric, our Galaxy Trade has abundant procurement resources, can you help Bernie in this regard?" Pierce said.

"Household raw materials may not be good for the time being, Hong Kong is not good at home manufacturing, and there is no wood processing industry chain, I will send someone to Indonesia to ask, Costco's current toilet paper is purchased from there, Indonesia is also a major wood exporter, it is estimated that a lot of wood in the United States also comes from Indonesia." Chen Zhiwen thought for a while and said.

It is unrealistic to do this in Hong Kong, but maybe you can try it after the domestic reform, at least in the current country, there should be no shortage of timber, even if it is lacking, you can also import, you may be able to take three to one supplement method, to place an order in this area to the country, processing into wooden planks, it is not difficult.

But it will take at least two or three years to come, but the timing is quite right, and in two or three years, Bernie's industry may expand as rapidly as Costco did at the beginning.

"Yes, at most, it's just hardware tools." Pierce nodded.

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(End of chapter)