Chapter 273 - 203: It Wasn’t Intentional

They didn’t send out a sales report today because the planning department was off. Yang Na had arranged for the weekend’s sales figures to be compiled into a single report on Monday. Despite this, Yang Hui still received a flood of congratulatory text messages that morning. President Tian, Zhang Chun, and even Cheng Jun had all sent their well-wishes.

To his surprise, Wang Qing even made a special point to call him. Wang Qing had met with President Tian over the past couple of days and had just found out that the owner of Yanghe Commerce was Yang Hui. Only then did he realize that the Yanghe Commerce, which had been making a huge name for itself in Qingzhou’s business circles, belonged to him.

"A Hui, you should really consider opening a store in our Yida Department Store! With sales figures like yours, you should spread the love to us, too."

Yida Department Store operated differently from Xinyue Square. The former used a concession model, where the department store handled all transactions. Before the 25th of the following month, the store would deduct its commission, rent, and other miscellaneous fees before settling the previous month’s payment for goods with the supplier.

Many suppliers were willing to work with Yida Department Store because even though its sales performance was average, it operated on a commission basis, which meant the risk of losses was low. This was unlike stores in shopping malls, which charged a flat rent. If sales were poor in that model, you could lose your shirt.

For suppliers working with Yida Department Store, like the brands under Futong Commerce, the standard business terms were a 13% commission.

That was why Yang Hui hadn’t considered Yida Department Store initially. There were several key reasons. First, Yida’s foot traffic was far lower than Xinyue Square’s. Furthermore, the demographic that frequented the department store was older and had lower spending power. In other words, both the quantity and quality of customers were significantly inferior to Xinyue Square, which would lead to far lower sales.

Second, Yanghe Commerce was paying a 6% commission as rent at Xinyue Square, and it was unlikely Yida Department Store could offer a rate that low. Futong Commerce already had an NLB Store in another city cooperating with a Yida Department Store, and their contract was for a 13% commission. Yang Hui didn’t think Wang Qing would do him a big enough favor to lower the rate to 6%, and Yida’s own performance didn’t justify Wang Qing making such a massive concession.

Moreover, Yida Department Store’s centralized cashier system would severely tie up Yanghe Commerce’s cash flow. Having funds locked up for 55 days was something Yanghe Commerce simply couldn’t afford at its current stage.

Finally, Yida’s low sales output would mean its employees’ income would be far lower than at other stores. A large pay disparity for the same job level would affect staff morale, which was the last thing he wanted to see in these early stages.

"Brother Qing, cooperation is possible, but I have some special conditions on my end that I’ll need to discuss with you in person."

Wang Qing was a sharp man. He could tell right away that Yang Hui had some special conditions that might put him in a difficult position. That’s why he suggested meeting in person: if both sides were agreeable, they could start cooperating. If it was too difficult, they could just pretend the conversation never happened.

In truth, he was just calling to touch base. Ever since Zhang Chun had publicly backed Yang Hui during a group meeting, Wang Qing had taken him very seriously. As long as it didn’t violate company policy, he was willing to do him a personal favor, a fact made clear during the last group purchase.

Yang Hui was a smart man, and Wang Qing believed he should understand where his bottom line was. Yet, Yang Hui had still phrased it that way. ’This might actually be difficult for me,’ Wang Qing thought.

"Alright. It’s been a while. Come on over and we’ll chat. You don’t need a work-related reason to visit."

Wang Qing was giving himself an out. If the terms were too difficult, they could just frame the meeting as two friends catching up.

Originally, Yang Hui had planned to open a few more NLB Stores before approaching Wang Qing. After all, no matter how explosive the sales were at the single Xinyue Square NLB Store, people would still doubt whether that success could be replicated. If it was only a one-hit wonder and other locations were just average, Yida Department Store’s confidence in him wouldn’t be very high.

His standard for opening an NLB or Zen store was a minimum of 800,000 in monthly sales. Anything less, and the employees’ income wouldn’t meet his expectations. Did Yida Department Store have any locations that met this requirement? Based on their current offerings, the answer was clearly no.

This was because Yida Department Store placed brands of this type on the upper floors. A department store’s ground floor was always reserved for gold, jewelry, and cosmetics, along with some watches or women’s shoes. But to reach one million in sales, the foot traffic on Yida’s upper floors was insufficient. Yang Hui had recently been studying several of Yida’s locations. One of them was on the Qingzhou Pedestrian Street, and he had his sights set on its street-facing storefront. The foot traffic pass-through rate there could only be described as terrifying.

If Wang Qing was willing to give him 300 square meters, Yang Hui was prepared to invest a significant amount of capital to renovate it and have the entrance face the Qingzhou Pedestrian Street. He conservatively estimated that business would be no less than at the first Xinyue Square store. The only problem was that this particular area was Yida Department Store’s gold and jewelry section, and he didn’t know if Wang Qing had the guts to give it up. There was also the matter of revenue; Wang Qing would have to run the numbers and see which option would be more beneficial to Yida Department Store’s bottom line.

Previously, Yang Hui wouldn’t have dared to even bring this up. But with the solid sales performance of the first Xinyue Square store as his foundation, he now had the confidence. If Wang Qing was willing to give up that space, he conservatively estimated he could pull in three million in sales a month.

In terms of pure sales figures, it might not beat gold and jewelry. But in terms of profit contribution, it would definitely be stronger. He knew that these days, the gold and jewelry business was mostly for generating revenue volume; the sales numbers sounded impressive, but the actual commission earned was low. Moreover, the primary customers for gold were the "dama" of China—a demographic that did nothing to drive consumption in other areas of the mall. Zen and NLB were different. Trendy brands like these attracted a younger, more affluent customer base that could effectively boost sales in other sections of the department store.

After ending the call with Wang Qing, he walked over to the entrance of the Zen store. Sunday’s daytime foot traffic was about the same as Saturday’s. The store was packed with people.