Volume 2 Chapter 106 - Street shopping (1/2)

“And then? Did you agree to him?” Still asked Xu Yi with a curious look on her face.

“Of course not.” Xu Yi shook his head, “He kept on talking and in the end, he just wanted our Frestech Chamber of Commerce take the lead in dropping the price, then the other companies in Banta City would all follow suit and reduce their prices. Like this, their Walmart Chamber of Commerce could lower their inventory costs and lower their prices.”

“If their purchase price decreases, the selling price in the store would also decrease.” Still said, “I feel that chairman Rundst is right, if the price is lowered, the sales amount would be increased. With this, it is very likely the overall profit would be increased.”

Xu Yi looked at Still and shook his head as he gave a soft sigh.

Still didn’t understand the market, so she said these words that were so one sided.

First not mentioning if the Walmart Chamber of Commerce would lower the prices if their purchase price was lower, to Xu Yi, this was a very dangerous thing to do.

Just like a phrase that was popular in the stock markets on earth before becoming a common phrase, people bought low and sold high.

If the price of the product could drop, then people’s first thought would be not to be in a rush to buy it. They would think that since it could drop once, it can drop a second time or a third time…...Anyway, there was no need to rush to buy it.

Moreover, once the matter of price dropping began, it would be hard to stop it.

If the Frestech Chamber of Commerce dropped their price, even if Xu Yi didn’t say anything, the other companies producing magic machines in Banta City would also drop their prices.

As long as the Frestech Chamber of Commerce took the lead in this, the other companies will find that this is a good method and will drop their prices even more to increase their sales volume.

If there were many companies that imitated this, it would become a price war like back on earth.

The magic machine industry was a very weak industry. Before this, the Frestech Chamber of Commerce had the power of a monopoly, so Xu Yi could implement the ideas that he wanted to implement.

But now under his guidance, the other companies had joined this industry. So now Xu Yi had to consider the development of this industry and he had to consider the effect on the industry for everything he did.

If there was a price war when the magic machine industry was just developing, it would decrease the profit margins of all the companies that were engaged in this industry. It would also make companies that had just entered the industry to lose confidence and interest, which would be a large blow to the entire industry.

So after the Banta City Magic Machine Business Union was formed, Xu Yi and the chairmen of the other companies made the first decision that when any company sold magic machines, they had to consult on a price and couldn’t try to outbid each other.

But now chairman Rundst had requested Xu Yi to take the lead in dropping the price, so naturally he couldn’t agree.

Of course, the Walmart Chamber of Commerce was the most important partner for most companies in Banta City that produced magic machines, so Xu Yi couldn’t refuse chairman Rundst to his face. Although he couldn’t lower the prices, Xu Yi provided another plan which was to build roads.

Since it would affect the most important factor of selling magic machines in other cities which was transport cost, it would also lower the cost of the goods.

In front of chairman Rundst and vice chairman Wilson, Xu Yi took out the examples of the Banka Road and Bansa Road.

According to the data that Xu Yi took out, compared to before those two roads were constructed, the price in transporting the same amount of cargo from Banta City to Karma City and Saltan City had dropped respectively by 34% and 38%.

And then there was also the consideration of taking tolls.

For the Sines Continent that didn’t have a developed transport system, transport cost was the largest hindrance when it came to transporting goods. For the Walmart Chamber of Commerce that dealt in groceries, they understood this better than any other companies.

So when they heard Xu Yi mention the numbers of 34% and 38%, chairman Rundst and vice chairman Wilson were both shocked.

After confirming that Xu Yi’s data was not a joke, chairman Rundst almost immediately decided that the Walmart Chamber of Commerce would invest in building roads.

It wasn’t hard to guess from his appearance that the Walmart Chamber of Commerce wouldn’t just stop at a single road.

“Un, Xu Yi, tell me, why didn’t you agree? I feel that this proposition isn’t that bad.” Seeing Xu Yi deep in thought and not replying, Still couldn’t help speaking up.