Chapter 302 - 302 Investment
302 Investment
Meanwhile.
Ye Xuan and Liu Yanran were warmly invited into the main seat of the private room by Liu Yun. The gazes of the young masters and young ladies immediately gathered on Ye Xuan.
Among the young masters and young ladies, Ye Xuan’s aura was not inferior to anyone else. He calmly walked to the main seat. Then, he spread his arms for Liu Yanran to take off his coat and hang it on the back of the chair.
Liu Yun smiled and instructed the attendant to serve the dishes. Then, he closed the door of the private room and returned to his seat.
As soon as he sat down, Liu Yun looked solicitous. As he rubbed his palms, he whispered to Ye Xuan respectfully, “Hehe… Brother Ye, I have a few questions for you.”
Ye Xuan looked at him and couldn’t help but laugh. “Alright, alright. It seems like it will take some time before we can eat the hot food. If you have anything to ask, just ask.”
“Aiyo, Brother Ye is so generous. You’re really too generous!” Liu Yun smiled and patted the shoulder of a young master sitting beside him. “Look, I knew that Brother Ye is a generous person. He’s broad-minded, open-minded, and loyal. He’ll definitely give us a chance!”
“That’s right, that’s right. Brother Liu knows Brother Ye better.”
Ye Xuan took a look and saw that Liu Yun was quite professional at sucking up to others. Why did he invite supporting characters?
Seeing that Ye Xuan didn’t speak, Liu Yun wasn’t sure if it was better to praise him for a while longer or cut the c.r.a.p and get to the point.
Liu Yun paused and looked up at Ye Xuan’s clear eyes. He felt like everything about him had been seen through.
It seemed like he could not hide anything in front of Brother Liu.
Liu Yun gritted his teeth and put away his cheeky smile. “Brother Ye, I’ll get straight to the point. You know that Jinling is a piece of land that has always been neutral for the past few years. You might not lose anything by investing in something, but most of the time, you won’t earn anything.”
“We have money, but most of us don’t know where to invest it.”
“Which one of us here isn’t called a hedonistic son of a rich family? We’re often looked down upon by the young masters of Tianjing and Shanghai. We can’t accept this. Isn’t there anything worth investing in in Jinling? In terms of history, Jinling is the ancient capital of six dynasties. In terms of economy, Jinling can squeeze into the top ten in the country.”
“Let’s talk about my situation! Jinling is vigorously developing a new area in Jiangbei. I also responded to the call to invest money there, but in the end, I lost everything.”
“Furthermore, it’s said that everyone is doing e-commerce now. Jinling is clearly a free shipping area, but I couldn’t beat the other businesses. Even though I sold things at a 10% discount, no one wanted to buy them. In the end, I owed a lot of debt.”
“What do you think I should do?! Previously, when I saw Brother Ye make a move, I knew that you had sharp eyes and could definitely give us some suggestions. I don’t want to soar into the sky. I just want to prove that I’m not a good-for-nothing wastrel who only knows how to rely on my family!”
Liu Yun’s words were sincere. He admitted his failure and even expressed his ambition.
Ye Xuan didn’t waste his breath on him and said bluntly, “You’re not bad to admit that you’ve failed. The worst thing to do in business is to follow the trend. Your mistake is to follow the trend. If others go to Jiangbei, you should go to Jiangnan. If others start an e-commerce business, you should start a physical shop.”
“A physical shop? Who still does this nowadays…” A young master from Jinling muttered, but his voice was not soft in the quiet environment. Everyone present heard him.
Ye Xuan wouldn’t ignore such a voice. He continued, “What you see is only the surface. Just when you think that everyone is doing e-commerce, the e-commerce companies are actually silently going back offline.”
“They’re secretly setting up a trap, so of course, they can’t let everyone know. There’s basically no one in Jiangbei, and the supporting infrastructure is not in place. It’s even more impossible to set up a physical shop there. Therefore, we have to shift our focus back to the lively streets in the city.”
“This… Brother Ye, I understand that we can’t follow the trend, but physical shops… As far as I know, there are many physical shops that have closed down in Jinling. E-commerce companies opening physical shops is just a gimmick, right?” Liu Yun asked carefully.
“Do you think that you can save money by developing an online business?”
“This… No. I know it’s too late to enter now, but I have the money to buy enough advertising. Why can’t I promote my business?”
“Have you thought about the cost of obtaining customers?”
“The cost of obtaining customers?”
“That’s right. Any business is the same. It’s a transaction. When you buy an item, you have to try your best to lower the cost. In the past, everyone started e-commerce companies like a swarm of bees. It can simply be said that everyone was in an e-commerce company. At the end of the day, it’s because the cost of e-commerce is low. To put it simply, there’s no rent. In that case, what is rent?”
“Rent… is… Rent is the cost of using the shop or something…” Although Liu Yun had a hot-blooded desire to do business, he was ultimately a novice in the economy. It was easy for those who were rich and foolish to be tricked. He was stunned by Ye Xuan’s question. Rent was rent. What else could it be?
“Rent is the cost of traffic! The more people there are, the higher the rent! If you open a shop in the city center, the rent will be 50,000 yuan a year. There will be 50,000 people pa.s.sing by the door a year. One-tenth of them will enter the shop, and you can a.s.sume you will have a deal with one-tenth of the people who enter the shop. Then do you know how much the cost of obtaining a customer is?”
Liu Yun’s eyes widened. He had always only handed this kind of thing to his manager under him. He actually did not know much about it. Anyway, when he saw that everyone was in the e-commerce business, he also wanted to have a slice of the cake, but he did not expect to lose money.
However, not all the young masters and young ladies in Jinling were stupid. Soon, someone answered, “Fifty thousand yuan in exchange for 50,000 people pa.s.sing by equates to one yuan per impression. Fifty thousand yuan in exchange for 5,000 people entering the shop is ten yuan in exchange for one person entering the shop. As for the cost of obtaining customers, that’s fifty thousand yuan in exchange for 500 spending customers. The cost of obtaining customers is naturally 100 yuan.”
“That’s right. Although e-commerce doesn’t seem to have rent now, it doesn’t mean that you don’t need to buy traffic! In the past, there were few people doing it and there was a lot of free traffic. What about now? The cost of obtaining customers is no longer the same as before! If you invest a lot of money to operate it, it looks like the flow of money is very beautiful, but the cost is also huge! How much money can you earn?!” Ye Xuan nodded and continued.
Liu Yun was dumbfounded. He had indeed never thought about it in depth. Investing money to buy traffic could indeed buy people, but he had never compared it to physical shops in this aspect. Liu Yun only thought that he had long developed the habit of online shopping in the past few years. Who would still run a physical shop? Whoever opened a physical shop would die off. However, he had never thought about the cost and profit.
That’s right, a profitable business was a good business.