Chapter 374 - First Stab in the Back of the Year 2011! (1/2)
December 31st…
Zhang Yuan arrived at Fish-Catching Internet Cafe’s Handong University early in the morning. After ordering a cup of coffee, he sipped it nonchalantly and browsed Tieba, intending to see if any interesting posts had been made by the netizens.
He had arranged for his employees to either refund all the problematic parts or send them for repair yesterday. He had also spent the remaining funds in the account on computer parts that had higher chances of malfunctioning. In particular, he had placed more orders for RAM sticks.
Although there were significant costs involved in hoarding parts like that, Zhang Yuan was more concerned about ROF’s reputation.
When the business had just started out, Boss Pei had poured huge sums of money into running 1024 Digital Day to build a name for it.
If the reputation was ruined by quality problems, wouldn’t Boss Pei’s hard work all be wasted?
Thus, Zhang Yuan had to guarantee good quality! He had to make sure that none of the computers malfunctioned. He also had to provide the best after-sales services to customers and ensure ROF had enough stock so that customers could receive their system units on the day that they placed their orders.
After working on all of those things, Zhang Yuan finally found time to relax.
Tomorrow was New Year’s Day of 2011, and the holiday would last for three days. That meant Zhang Yuan could take a good break.
Zhang Yuan sipped his coffee slowly as he browsed Tieba.
All of a sudden, a post on Tieba caught his attention.
‘MSC’s Factory Caught Fire Again?’
“F*ck! RAM prices are going to rise, right?”
“Unscrupulous!”
“Sh*t, it looks like the prices are already rising.”
“I was waiting for New Year’s Day to see if there would be any promotional events online so that I could assemble my own system unit! Now, that’s all gone down the drain! What a waste!”
“We’re finished. The unscrupulous merchants have responded instantly!”
“What exactly is happening? Why are their factories catching fire so often? Would their factories burn from Singles Day last year to 618[1] this year?”
“The experienced ones among us would know whether this really was an accident or not. I’m guessing that the manufacturers had set the factory on fire on purpose.”
“I think so, too! These manufacturers’ factories are taking turns to catch fire. On top of that, there would be floods and power shortages. Why don’t they just tell us directly that they would be reducing supply and increasing prices?!”
“The fire seemed quite serious this time. Wafer production was probably gravely affected as well. That means that RAM aside, the prices of flash drives would likely rise, too…”
As he read the netizens’ discussion, Zhang Yuan first felt confused and then pleasantly surprised.
He quickly accessed a shopping website to check the prices of the RAM sticks he had purchased before. They were now over thirty yuan more expensive!
What’s more, this was only the beginning. Zhang Yuan guessed that the prices would only continue to go up over the week.
After all, Zhang Yuan had been keeping up to date with Tieba for a long time. He knew very well how such things would develop. Each time prices of RAM sticks dropped to new lows, a factory would catch fire or experience a power shortage. Then, there would be news reports about manufacturers losing thousands of millions of yuan. After that, unscrupulous merchants would increase the prices of RAM sticks at once.
Even so, nobody knew when the ‘accidents’ would occur.
If they did, they would have bought a huge batch of RAM sticks for storage so that they could generate profits during that period. To Zhang Yuan, the news would have been bad.
This was because ROF’s computer-installation business had a similar pricing strategy as those other brands. Based on Boss Pei’s guidance, the original prices had already accounted for ROF’s brand premium and the value of their after-sales services. They were not to be adjusted frequently
If they wanted to increase the prices, they had to upgrade the hardware; if they wanted to reduce the prices, they had to run promotional events but not too many.
The main aim of this strategy was to get rid of customers’ worries and create the impression that ROF was a good-hearted and reliable brand with products that retained their value well.
The rising RAM prices would have caused the entire system to become more expensive. People might take ROF for an unscrupulous merchant; that would be bad for its reputation.
Thus, an increase in RAM prices would have been bad news to Zhang Yuan. If their costs increased but they kept their selling price the same, they would have generated much less profit.
Yet, the situation was different.
Zhang Yuan had already ordered a batch of hardware. He had placed more orders for RAM sticks especially because he had considered the standard of four RAM sticks for each high-end system worth over ten thousand yuan. Thus, he had hoarded a huge load of them!
To customers, that meant that the price-quality ratio of ROF’s high-end system units would go through the roof. Buying ROF’s system units would cost less than buying individual parts to assemble their own!
At the same time—even if Zhang Yuan sold the systems at their original prices, ROF would still be able to generate huge profits.
Of course, he could also consider increasing prices.
However, that was not aligned with the Tengda spirit. It would also not help to increase ROF’s market share.
Thus, after some consideration, Zhang Yuan decided to sell the current stock at their original prices!
Since RAM would be more expensive, Zhang Yuan also decided to make adjustments to the next batch of hardware. He would upgrade some parts and increase the selling prices based on the new costs.
Of course, those problems would only have to be resolved later. That was because they had already ordered a lot of hardware this time.
At that thought, Zhang Yuan could barely sit still.
He immediately called his employees, instructing them to design a new batch of posters to be displayed at the entrance of the Fish-Catching Internet Cafe branches. At the same time, he instructed them to update the publicity page on their online shop as well.
The contents of the advertisement would be simple. There would be no discounts or sales, but the prices would not increase either!
January 1st of 2011, Saturday…
The New Year’s Day holiday would last from January 1st to January 3rd. Pei Qian happily gave himself a break to rest.
The thought of Li Yada, Lin Wan, and the others returning from the United States on the 4th made Pei Qian’s head hurt.