Amidst the urban expanse of Poole, the iconic Celestial building stood in all its glory.
Eric Robbins, a seasoned sixty-two-year-old, had just concluded a distributor meeting.
With a dinner gathering scheduled for the evening at a local hotel, favonovel.com could do nothing but rest briefly in his office before mustering enough energy to attend the event later on. However, today had left Eric Robbins feeling somewhat disheartened.
Lately, distributors had grown increasingly influential within the company. In the past, Eric Robbins’s group exerted pressure on these distributors, assessing their performance and coercing them into consistent product purchases and elevated inventory. Moreover, the group often deducted their sales as year-end rebates, fostering a culture of diligence and obedience.
Yet, the advent of e-commerce had tilted the balance against established brands, leaving them without their once-dominant leverage. Especially in the realm of opaquely fast-moving consumer goods like alcohol and tea, new brands proliferated daily, boasting of being the next Moutai or tea monarch.
These new entrants excelled at packaging and narrative, presenting themselves more adeptly than traditional companies. They mastered the art of sourcing a better-packaged product from an OEM manufacturer, slapping a 500 dollar price tag on it online, then garnishing it with a slew of offline promotions. Eventually, the product reached consumers, shipped in sets of 51, with the actual cost barely exceeding five dollars.
With a tea costing a mere five dollars, advertising and traffic buying expense at ten dollars, and logistics costs of two or three dollars, the overall expenditure remained modest.
Selling 51 units to consumers ensured a profit margin of at least thirty.
Tea sales followed a similar pattern.
Eric Robbins offered ordinary mass-grade Pu’er tea at a hundred dollars per cake, with each cake weighing over 300 grams. However, marketing maestros divvied up similar quality tea into five-gram parcels, weaving a custom tale around it. Such a presentation fetched a price of fifty dollars.
Some competitors might lack packaging finesse but they thrived in price wars. They bundled tea meant for kindling and brought it to market, simultaneously overwhelming and overwhelming the consumer. If one cake proved insufficient, they’d throw in another, then another, until they reached a sum of five big cakes, supplemented by three small ones for travel. A tea pot might even be thrown in, all for the grand price of a hundred.
This facade of marginal profits and booming sales concealed a deeper deceit. Five big cakes and three small cakes amounted to roughly twenty dollars in costs. The remaining seventy dollars translated into profit. Allocating over twenty dollars to the online influencers who hawked these products still left a significant gain.
Eric Robbins understood his competitors’ tactics all too well. He comprehended their success was built upon these strategies, which simultaneously eroded their target market and profits. However, favonovel.com couldn’t bring himself to embrace such crude marketing methods.
These rivals didn’t possess a true understanding or appreciation for tea; they simply saw it as a brief conduit to profit. They manipulated tea to acquire consumers, then switched gears to health products, cycling through the same techniques for a fresh audience.
In Eric Robbins’s words, these individuals lacked reverence for tea.
His stance differed.
A lifelong passion for tea transformed favonovel.com into a prominent and prosperous local entrepreneur. His affection for tea was genuine. To him, making money rested upon the foundation of crafting excellent tea. Only earnings earned in this manner could bring genuine contentment.
His love and reverence for the craft, however, had failed to yield an overnight fortune.
In stark contrast, these fraudsters raked in millions overnight. On some occasions, seeing them prosper left Eric Robbins doubting the tea industry’s future. He feared most sectors would fall prey to bad money driving out the good.
To avoid becoming bad money, one had to outpace it. For Eric Robbins, cashing out seemed an attractive option, an escape from the market’s turmoil.
But cashing out wasn’t as simple as it sounded.
Much like a corner bodega, where the proprietor toils tirelessly for a year, managing to accumulate hundreds of thousands, yet yearns to sell the place for ten times its earnings, a profit that encompasses the next decade. Such dreams remain distant, vanishing like smoke.
Today’s distributor meeting only deepened Eric Robbins’s despondency.
Agents were demanding reduced purchase discounts, dropping from an original 50% to 40%. They even threatened to minimize or halt their purchases altogether if the company didn’t comply.
The discount may seem minor, but imagine paying forty for something worth fifty, it equates to a 20% price drop.
Normally, Eric Robbins would have erupted in anger before the agents. This time, however, favonovel.com controlled his temper, promising the distributors he’d earnestly deliberate their proposal.
Within his office, Eric Robbins held back his frustration, muttering curses at the dealers under his breath—these individuals who burned bridges when they crossed rivers.
In the midst of his thoughts, a knock sounded on his door.
Anthony Robbins, his son, sought entry, asking, “Dad, can I come in?”
After shutting the door cautiously, favonovel.com spoke with a righteous fury, “Dad! These dealers are utterly useless. They’re offering a 40% discount, practically robbing us blind!”
Eric Robbins offered a helpless smile, replying, “There’s no way around it. Today’s attendees are agents from prefecture-level cities and above. They’re practically our patrons now, and offending them is out of the question. Furthermore, they’ve banded together. There’s no way I can afford to ruffle their feathers.”
Anthony Robbins’s displeasure was evident, “Why? They’re just raising prices and extorting money. If I were in your shoes, I’d have already given them a piece of my mind!”
Eric Robbins sighed, “That tactic might have worked in the past, but taking a step back and offering a few concessions often smoothed things over. However, this year’s circumstances are different…”
With a heavy heart, Eric Robbins mumbled his frustration, “In your generation’s lingo, the Pu’er tea market this year is a nightmare!”
He paused, then continued, “To make matters worse, not only are the major traditional tea companies slashing prices to reduce market rates, but even these upstart brands are utilizing marketing and pricing strategies to continually infringe upon our traditional tea market space. They claim their tea is just as good, and they manage to sell it for less than half of our price. What can you do when they can’t distinguish between the quality of a 1 dollar tea and a 10,000 dollar tea right in front of them?”
With a touch of melancholy, Anthony Robbins added, “More people are drinking tea now, but very few genuinely understand it. Tea leaves that cost 1 dollar per kilogram and tea leaves that cost 10,000 dollar per kilogram—many can’t tell the difference.”
Eric Robbins nodded knowingly, sighing once more, “To make matters worse, even the bottled beverage industry is entering the tea market with full force. While oolong and green tea never posed a major threat, now Puer tea is in their sights.”
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