"This investment is indeed not small." Chen Zhiwen said with a smile. You know, when the supplier bears the initial cost of goods, the cost of opening a new Costco store is only about one million US dollars, but now a logistics center may be seven or eight times that of a new store.
"Eric, this matter is not urgent, because it will take at least half a year for us to stabilize the current five branches. I am already preparing to identify the addresses of new branches in five other cities in California. When these stores open, it will take at least By the end of the year, I can still use the current model to supply these ten branches, but the cost will be higher. But if we go out of California, we will need a logistics center. The West Coast is actually better than California's economy, and other states also have Some cities are okay, but they are too scattered. If suppliers all use logistics to supply goods, the cost will be too high," Pierce continued.
The main population of the United States is concentrated on the east and west coasts, and there are many cities in the middle, but they are far away from each other. This is also the reason why the American aviation industry is developed. Their population is concentrated in cities, and the cities are scattered throughout the country.
Chen Zhiwen naturally knew this and asked: "Then when do we need to build this logistics center?"
"If we don't need to rush to expand, then it will be fine in two or three years, but if we want to control the West Coast soon, it is best to start investing early next year." Pierce suggested.
"Okay, I will be ready." Chen Zhiwen nodded and said. The expansion of Costco and the logistics center are also short-term investments of tens of millions of dollars, but the investment still needs to be invested, otherwise, there will be more stores. Logistics and distribution centers will see a sharp increase in costs in all aspects, which is a self-destructive city wall.
The supermarket itself is also an asset-heavy industry. Once it collapses, you can only step on the accelerator and accelerate as hard as you can. Otherwise, sooner or later, you will be defeated by other players, especially Wal-Mart, which has already known about warehouse supermarkets in advance. Wait for Wal-Mart's funds in a few years. If there is enough, it is very likely to enter the market, which may be several years earlier than in the original history. As long as you occupy the big cities first, others can only choose the rest.
Of course, we can also fight together in big cities and lose both sides, but Sam Walton probably won't do that. After all, Wal-Mart's biggest competitors are still retail giants like Kmart and Sears with a turnover of more than 10 billion US dollars. company.
"Actually, we can also get a loan, but in this case, our financial status will be known to the bank." Pierce said suddenly.
"Loans are available, but we won't mortgage Costco." Chen Zhiwen said with a smile. He doesn't want to directly mortgage several of his companies now. Red Bull, Midea's arcade profits, and Costco are all private companies, and their financial status is It is extremely confidential, and if it is mortgaged, the data must be handed over to the bank. Although the bank is definitely required by law to keep it confidential, who actually knows?
These companies either have high profit margins or high capital turnover. Any investor or person in the relevant industry will know the potential of these new industries after seeing the financial report data. Once leaked, the industry giants will find out and will enter the market. If so, that would be troublesome.
Midea's arcade machines are better, and Chen Zhiwen's memory for future generations has unparalleled advantages, but Red Bull and Costco don't have many advantages. Even if they are the first to go now, they have just left the starting point. If others are willing to spend money, they still have a chance. of.
This is the last thing Chen Zhiwen wants to happen, so Wal-Mart's stock is the best collateral. However, Hong Kong may also need a large amount of funds at any time. Fortunately, next year, Wal-Mart's stock may rise by two Thirty points, this gave Chen Zhiwen tens of millions of dollars of credit mortgage line out of thin air.
"OK, you are the boss, and you are responsible for the financial matters." Pierce said with a smile. He knew that the logistics center was not a problem. In fact, for him, Costco was developing too fast. If he were not his boss, Normal entrepreneurs simply cannot have the ability to inject a large amount of additional capital.
"The development is going so smoothly, and the demand for funds is also fast!" Chen Zhiwen smiled and shook his head. When he planned to start with the functional drinks and electronics industries, he estimated that these two industries would not consume too much money. Midea's home appliances Electrical appliance projects consume money, but arcade machines can be easily covered. Although Red Bull invests a lot in advertising, it all comes from its own profits. As long as there are no problems, it will be fine.
Only direct retail investment in the United States will definitely consume a lot of money. Fortunately, knowing that Wal-Mart's stock price has risen very sharply in the past few years, we started to acquire it early. In this way, we not only have the relationship with Wal-Mart, but also have a rate of return. A very high investment project, while also obtaining enough collateral to sustain Costco's extremely rapid expansion.
Other investments, such as acquisitions in Hong Kong, consume a lot of money, but like Wal-Mart stocks, Chen Zhiwen knows that they will rise in the future, and he can get returns as long as he waits. The only exception may be Wharf, which may happen with Jardine Matheson The fierce acquisition war, and even the actual acquisition, the huge project of Harbor City is also a very big gold-eating beast.
These are basically the limits of Chen Zhiwen's current ability to personally participate in investments. Only after these projects are successful one by one will he have the energy to plan other projects. However, this does not affect other investment projects that do not require worry and only require payment.
One is a small joint venture project with Buffett in Hong Kong. Because Chen Zhiwen had already prepared the land and building, after the equipment from Berkshire Hathaway arrived, construction started quickly and internal supply in Hong Kong has begun. At the same time, a small amount is also exported to the United States.
The second is the trading company for supermarket products. With two major customers in the United States, Chen Zhiwen only ordered the trading company to try its best to open up the market of the next major supermarket giants in Europe, such as Auchan, Tesco, Metro, and Carrefour. Several supermarkets are not very big yet. If it were not for insufficient funds and some of these supermarkets were not listed, Chen Zhiwen might have invested in several more.
However, from the perspective of return rate, the benefits of these companies are still not as good as Wal-Mart. After all, the European market is too chaotic. It is not the business environment, but the fragmentation of culture and language that makes these companies’ local markets too small. They have to go to other European countries. Expansion requires higher costs, making it difficult to reach Wal-Mart's level of scale.
If Europe was really a country, there would definitely be a giant like Wal-Mart in the retail field.
As for other large supermarkets such as Kmart, they don't care at all. After all, the trading company's energy is also limited, and there is no need to spend too many resources to conquer a giant that will collapse in the future, and the water inside this giant is very deep. , it was extremely difficult to enter their supply chain when they were at their peak.
The third one is a company that Chen Zhiwen wants to invest in. This company is located in Portland, Oregon, in northern California.
After observing the newly opened Costco supermarket in San Francisco for two days, Chen Zhiwen took his group to Oregon in northern California. Under the recommendation of a recommendation letter from Citibank, Chen Zhiwen met the person he needed to meet - Phil · Knight.
(End of chapter)
