Sunday, November 28, 2010

258. How to succeed in business: The 72-year-old man

To succeed in life and in business, one has to know what to do and to work hard. There is no short cut to success. I will illustrate this interesting case.

Mr Oh - A prospective Buyer's Agent - The 30-year-old man
Mr Lee - A prospective Seller's Agent - The 72-year-old man
Goods in demand in Myanmar - a brand-name multi-vitamins

What Mr Oh wanted from Mr Lee was a large number of multi-vitamins without the box, an analysis certificate and quotation. He said: "I could get the vitamins from a Singapore importer but his prices are high."

What Mr Lee wanted from Mr Oh was his quoted buying price and method of payment. He did now want to waste time providing quotes so that Mr Oh can use to underprice or force another Seller to bid lower. He would not provide an analysis certificate at his own expense. He would not provide the vitamins without a box as there would be damages and then claim from Mr Oh. He wanted full payment but Mr Oh offered to pay 50% deposit and 50% on delivery.

I could see that there was no point in doing business. "It is not easy to do this business," Mr Lee reiterated to me several times. I was not doing this business as I knew that a lot of time would be wasted wheeling and dealing. So I dropped the contacts. Then Mr Oh phoned me to follow up. I arranged for a meeting with Mr Lee at the last minute and asked Mr Lee to meet at Peninsula Plaza at 4 pm.

BE FLEXIBLE
1. Last-minute meetings are irritating to my friend Khin Khin when she has better things to do. She blasted me once when I arranged for her to meet the 72-year-old man (who has extensive trading contacts in China and Indonesia). She gave me a piece of her mind. For me, this is OK if I have the time.

2. The 72-year-old man asked me to drive him to the meeting. I obliged. There is no point saying to him that "you want the business, you go yourself." This is being inflexible.

3. The old man said he had to eat something as he was diabetic. The meeting was 4 p.m and we were late by 15 minutes. So I phoned Khin Khin and her contacts to explain the situation of delay and suggested a meeting at Funan Shopping Centre Food Court which is just a 5-minute walk from Peninsula Plaza. "No," Khin Khin said. "We meet at Peninsula Plaza. How long will you and the old man take to come?"
"It will be 2 hours later," I slammed down the phone. I had driven Mr Lee all the way from Clementi and here, Khin Khin and her contacts were not keen to meet nearby and have some drinks. Making a business contact is 90% entertainment rather than just straight talking about business.

BE RESPECTFUL
1. I really dislike Khin Khin saying "old man" when she could say Mr Lee. It is disrespectful in stating the obvious. Even "young man" may be condescending to somebody who is insecure and just starting out in business. Just address the business contact by his name. It is so simple and yet Khin Khin and her friend would not do it since they are younger. But not as young as spring chickens.

BE CLEVER WHEN ENCOUNTERING OLD DOGS IN BUSINESS
1. When Mr Lee had his roti prata, he told me that since he had come all the way, he should contact Mr Oh. I said: "Phone yourself, as I don't see any future in this business with the behaviour of the Sellers' agents." He phoned Khin Khin's friend, May Thet whom I had first introduced earlier. She was the one who knew Khin Khin and Mr Oh. May Thet said OK to meet at Peninsula Plaza. When Mr Lee and I arrived, May Thet pulled up a chair and said: "Welcome boss..."

This is where I said one has to be clever when encountering old dogs in business. The 72-year-old man replied: "If I am the boss, why do I have to come all the way with my goods to see you? You even refused to meet me at Funan Centre..."

LEAVE THE MEETING WHICH WILL NOT BE SUCCESSFUL
I left Mr Lee at Peninsula Plaza with the Seller's Agent and contacts. It would be an acrimonious meeting with no results. The old man would be brutally frank to teach these young people how to do business. I went to a shop that sells paintings. The proprietor cannot converse well with me in English but she has new paintings on sale. It would be such a pleasant time to spend looking at the work of the craftsmen selling their artwork.

Later, Mr Lee told me that he told Mr Oh to put $100 cash down while he would write a cheque for $1,000 since Mr Oh said he had a Singapore importer and would not really need Mr Lee's services. Mr Lee said that the "importer" was just a distributor or post man. Mr Oh declined the bet and left in an unhappy manner. That was what I predicted. No need brains to do it. As for Mr Lee, he told me he felt invigorated sparring with the Seller's agents as they knew nothing about the vitamin business.

I learnt some business tips such as "dumping" from the 72-year-old man by being hands on and though this business meeting was acrimonious, I was not involved in the unpleasant encounters. No business university can beat being hands on and meeting a brutally frank 72-year-old general trader with considerable experience. You just need to spend time with him and if he respects you, he will share his experiences and extensive network. You just have to read the situation and act wisely.

APPLICATION TO VETERINARY MEDICINE.
"Dumping" applies to veterinary medicine too. For example, pet shops in veterinary surgeries sell a brand of food at just cost-price by ordering in large quantities.

The importer has given the seller a 40% discount and recommends a 20% discount to consumers. If the pet shop operator sells at 35% discount, he gets many sales and in theory he will ask for more supplies. However, this is dumping and the importer will never supply him more as dumping is not sustainable in business in the long term for the manufacturer and importer.

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