Losing Money to Be a Tycoon

Zhang Yuan and Ma Yang exchanged a look.

The corners of Ma Yang's lips twitched. "Brother Qian, let's not talk about anything else first. The name alone has a negative underlying meaning… is it meant to express that we handle logistics slowly?"

Pei Qian shook his head. "Old Ma, you're being uncultured. Going against the headwind is ideal for flying, understand? Our name means we are getting ready for flight!"

Zhang Yuan blinked hard but said nothing.

He did not understand Boss Pei's thinking at all!

Earlier on, Zhang Yuan tried to predict what Boss Pei's next target would be. Would he improve on the other branches? Would he work on Fish-Catching Take-Out?

In the end, it was neither. Boss Pei was expanding his business even more.

Both of them looked at Pei Qian in disbelief.

Pei Qian cleared his throat and said, "I know. This plan might sound too big. Based on the amount of funds we have, it might even be beyond our reach.

"However, I'm not in a rush to build a large-scale logistics company with a nation-wide scope. I don't even plan to make deliveries between cities.

"We'll focus on Jingzhou City alone. We're going to focus on the problem of the 'last kilometer'!"

There were already many e-commerce platforms in the world at the time. The only problem was that they had not yet become so popular that everyone was using them as would be the case later on.

Naturally, logistics and express delivery services had already begun serving the entire country. What's more, they were developing quite well.

However, most express delivery services were still living in the moment. They did not deliver parcels on time, lost them occasionally, and always dumped them at pick-up points where customers could collect them on their own. These were all common occurrences.

In other words, few delivery companies delivered parcels to customers' doorsteps.

In simple terms, this was the problem of the 'last kilometer'.

Even ten years down the road, this problem would not be well-resolved. Apart from good-hearted companies like SF Express and JD.COM, most delivery companies continued to dump parcels at collection points as they did before.

Hive Box, Cai Niao Courier, and the like were started in order to solve the problem of the 'last kilometer'. However, in reality, they were doing very badly.

The root of the problem was capital.

It required a lot of effort to deliver every parcel from a local warehouse to the customer's doorstep. That was why most delivery companies chose to transfer this expense to their paying customers.

Pei Qian's thinking was quite simple: The reason why everyone was unwilling to do a dirty job like that was that it did not make a profit, right?

I don't mind!

In any case, he had to incur losses. Taking on dirty jobs like that could ensure that he would incur losses. On top of that, he would be able to bring convenience to his customers. Why would he turn down an opportunity to help others?

"I have already decided. We will start off by opening a hundred Headwind Courier stations in Jingzhou City. We will cover most districts in Jingzhou City.

"Then, we will talk to various express delivery companies about working together. They can ask their delivery men to drop parcels off at our stations. Our delivery men will then deliver these parcels to customers' doorsteps."

To put it plainly, they would be Cai Niao Courier stations that could deliver parcels to doorsteps.

However, the problem was some Cai Niao Courier stations were profitable.

The initial investment required for Cai Niao Courier stations only amounted to about twenty to thirty thousand yuan. All they needed to do was rent a space in the district. Each month, rent would cost about a thousand yuan or two (this was based on Jingzhou's rental market). They would have to spend an additional ten thousand yuan on shelves, a front desk, a computer, a cabinet, and renovations. Then, they would be able to open for business.

They would have to negotiate a suitable price with the delivery men, but they could earn about twenty to forty cents per delivery. If they accepted two to three hundred deliveries per day, their monthly income could add up to about three thousand yuan.

Ordinarily, Cai Niao Courier stations would be managed by two people. The other ways to earn income included selling products, providing marketing and advertising options, making express deliveries, and the like.

All in all, there were ways for Cai Niao Courier to make profits. That was why so many people participated in starting Cai Niao Courier.

However, this did not pose a problem for Pei Qian since he was starting Headwind Courier stations. This was because they had to take the initiative to deliver parcels to customer's doorsteps.

On one hand, this would increase the costs of hiring delivery men alone. If they delivered three hundred parcels a day, they needed at least one or two hardworking delivery men. Pei Qian would be paying their salaries.

On the other hand, customers would not need to pick up their parcels from the courier station. With less traffic, the income that the courier stations would earn from the sale of products, marketing, and the like would fall.

In order to maintain a courier station like that, they would need at least three people: one branch manager and two delivery men. Districts with more people in them would probably require three delivery men. If each person had to be paid three thousand yuan per month (that was the sum of their base salary and their commission), he would be able to spend at least nine thousand yuan per month.

In addition to paying two thousand yuan for rent, he would be spending a total of eleven yuan per month. Assuming they would barely be able to earn three or four thousand from revenue, they would be making a loss of seven to eight thousand yuan.

If Pei Qian started a hundred courier stations, he would have to make an initial investment of about three million yuan. The monthly losses that he would incur could reach up to seven or eight hundred thousand yuan.

What's more, this would just be the beginning. As Pei Qian expanded his business, he would have more employees. That would mean he would make more losses.

The best part of it all was that he would have some extent of control over the losses he incurred in this business!

For example, if Pei Qian did a rough calculation a month before settlement and found that he still needed to spend about a million yuan worth of System Funds, he could immediately open twenty new Headwind Courier stations. As long as he opened the shop a week before settlement, the money would be considered spent. This would not delay settlement either.

Headwind Courier stations would not be like Fish-Catching Internet Cafe. It would not take much time to open or close these stations. As the saying went, 'the smaller a boat is, the easier it was to turn around'. This made it much easier for Pei Qian to spend money.

Pei Qian had thought of it all. When the time came, he would open Headwind Courier stations near Tengda, Fei Huang Workspace, Fish-Catching Internet Cafe, and his own home first.

Then, no matter what he or his parents bought online, there would be no need for them to collect the parcels on their own. Everything would be sent to their own home.

Since this business was going to benefit society, he might as well start with blessing his own home.

Not only would he be incurring losses, but he would be doing good deeds. This was perfect!

After listening to Pei Qian's brief, Zhang Yuan completely admitted defeat.

Indeed, it would be extremely difficult for anyone to predict what Boss Pei was thinking!

From the looks of the situation, this was going to be quite a long-term plan. Although Pei Qian did not make things clear, Zhang Yuan could roughly guess his intentions behind going in this direction.

If he settled the problem of the 'last kilometer', he would slowly be able to develop people's reliance on Headwind Logistics.

In the short-term, this would mean incurring losses. Yet, how about the long-term? Once people became used to using Headwind Logistics for their delivery services, they would choose Headwind Logistics for their deliveries whenever they needed it.

In the future, Headwind Logistics would be able to move into inter-city and inter-state deliveries.

However, the plan seemed to be too long-term. It was so long-term that most people would undoubtedly expect little of it!

Perhaps many years later, Headwind Logistics would still be incurring losses. However, once it succeeded, it would deeply influence many aspects of people's lives.

Zhang Yuan could not help but respect Pei Qian.

See, this was what a true set-up looked like!