The ex-factory price for a single cup-canned product is two yuan and sixty cents, with a profit margin of about ten cents. The "Four Happiness" gift set, however, has an ex-factory price of nine yuan, yielding a profit of about three yuan.
There was no way around it; the canned goods market is currently cutthroat. Even though the products launched by Hou Yong’s Anxin Food Factory are instant hits, they cannot be priced too high. Market rules must be respected, and the only path is a strategy of thin margins and high volume to capture market share. As for the "Four Happiness" set, it will retail for around ten yuan—the equivalent of half a month's wages for an average worker. If it were priced any more outrageously, even if Anxin Cannery were a state-run enterprise, it would be ordered to rectify its practices by the Market Supervision Administration.
The distributors are all savvy operators. They knew the cup-canned product was a surefire hit, but they weren't blindly optimistic about the canned food industry as a whole. To play it safe, they adopted a "deposit plus payment upon delivery" model.
Chapter 216