Chapter 150: The Foshan Trip, Part Sixteen

Liu San still remembered his family’s old adage: “No matter how the dynasties change, or who comes to power, our family’s duty is to practice medicine. We do not provoke or get too close to the military, the police, the gendarmerie, or the secret service.” And now, he had just provoked the head of a Ming dynasty secret service agency.

But since the connection had been made, perhaps it could be useful in the future. He would have to report this to the intelligence department when he returned; it might be a valuable lead.

“Brother is finally willing to be our distributor. This is all thanks to you,” Yang Shixiang said excitedly. “Our medicine has finally gained a foothold. We can sell several thousand boxes a year in Foshan alone!” He then grew worried. “But with the order from Manager Li, we won’t have enough ingredients—”

The transmigrators’ order, Li Luoyou’s order, and the stock for the Yang Run Kai Tang—all combined, not only were the expensive ingredients insufficient, but even the common ones were lacking. Even if he used up his entire shop’s inventory, it wouldn’t be enough.

Liu San didn’t hesitate. “I still have money.” He pulled out two more bank drafts. “Go and talk to Yang Shiyi tomorrow. Get all the ingredients you need, and then prepare for double that amount.”

Yang Shixiang shook his head repeatedly. “Just getting what we need is enough. Why prepare extra and tie up the money?”

Liu San shook his head. “Shixiang, you need to broaden your horizons. What are a few thousand boxes? We’re going to sell tens of thousands, hundreds of thousands. This little Foshan is just the first step.”

“Hundreds of thousands of boxes!” Yang Shixiang exclaimed. “Who would buy so many?”

Liu San shook his head inwardly. Yang Shixiang’s business acumen was indeed not very good. Perhaps he had been in the remote backwater of Lin’gao for too long.

“Shixiang, do you really think a place like Foshan, one of the four great towns of the empire, can only sell a few thousand boxes a year? In my opinion, Foshan alone can sell forty to fifty thousand boxes of Plague-Averting Powder a year. Add Guangzhou, and a hundred thousand boxes a year is no problem.”

Yang Shixiang shook his head in disagreement. “Doctor Liu, although Foshan and Guangzhou are populous, most people are poor. Few can afford such remedies.”

Liu San said, “Shixiang, don’t worry about the business. The foundry and kiln industries in Foshan are major consumers of medicine. The artisans are poor and can’t afford it, so we must find a way to make it affordable for them. In any case, life is always precious.”

“How can we make it affordable?” Yang Shixiang was perplexed. “Take this bottle of Plague-Averting Powder. With a fifty percent gross margin, it would have to sell for one hundred and twenty Wanli cash. The artisans earn at most two or three taels a month. How can they afford it?”

“The price, I think, should be ten cash,” Liu San said.

“Ten cash?” Yang Shixiang nearly jumped. “We’ll lose money!”

“We won’t,” Liu San said, picking up a medicine bottle. “This bottle of Plague-Averting Powder is fifty grams—” He remembered that Manager Yang didn’t understand the metric system. “That’s about one tael or so. We just need to make the packaging smaller. Three grams per dose. And we don’t need to use porcelain bottles; bamboo tubes will do.”

Reducing the size and using cheaper packaging were common tricks in modern commerce, but they were novel in the pharmacy industry of this era. Although Yang Shixiang admitted the method was clever, he felt it was a bit deceptive.

“At ten cash per dose, everyone can afford it,” Liu San continued. “We’re not selling the Plague-Averting Powder for people to take when they’re already sick, but as a regular remedy for summer heat. If people feel comfortable using it, they will continue to use it. This is called cultivating a consumer habit.”

“Making it a habit?”

“Exactly.” Liu San pointed to the tea on the table. “Shixiang, take this tea for example. From the emperor down to the poorest commoner, as long as they are not on the brink of starvation, it is one of the seven necessities of life. If there were no tea in the world, would people die? Of course not. This is a consumer habit. Moreover, there are many workers in the foundry and kiln industries here in Foshan. As long as it’s cheap and effective, they will naturally buy it.”

Yang Shixiang had a moment of enlightenment. “Like the rich taking tonics.”

“Exactly. The rich need their tonics, and the hardworking artisans and farmers can also use some remedies for their well-being. Who doesn’t want to be healthy and free from illness?”

“Indeed! Indeed!” Yang Shixiang was excited but also had his concerns. “But even at ten cash a box, if people don’t trust it, it will be hard to open up the market. We’ll have to slowly build a reputation over a year or two before it can sell well.”

“Slowly building a reputation is one way, but we can’t wait that long,” Liu San said. “We have to build our brand ourselves. So, at the beginning, we must give away medicine.”

“I know that,” Yang Shixiang replied calmly. “All pharmacies give away some soups and medicines on a daily basis. But that’s just a good deed; it doesn’t do much for sales.”

Liu San smiled. “As I said before, we need to cultivate a consumer habit among the people of Foshan. If we wait for them to get familiar with it on their own, it will take, as you said, a year or two. If we give it away directly now, they will immediately know its benefits.”

Yang Shixiang asked, “If we give it away freely, won’t it be a bottomless pit? Once something free hits the streets, won’t people go crazy for it?”

“I’ve thought about that too,” Liu San said. “First, we can distribute it at the counter of the Yang Run Kai Tang to those who come to fill prescriptions, and also give some samples to the traveling medicine merchants. Second, we can organize our own people to take the medicine directly to the foundries, kilns, and other places to distribute it to the workers.”

“That’s feasible,” Yang Shixiang nodded repeatedly.

“Once we distribute it in these places, business will naturally pick up,” Liu San said confidently. “As for Zhuge’s Marching Powder, I also plan to give some away.”

“Give it away where?”

“To the schools, of course,” Liu San said. “Whether it’s the children’s examination, the county examination, or the provincial examination, we will send people to give Zhuge’s Marching Powder to the scholars. Have you ever been inside an examination hall?”

“No,” Yang Shixiang shook his head. “I hear it’s extremely cramped, barely enough room to stand.”

“The cells in the examination halls are so small you can’t stand up straight or stretch your legs. The scholars are often not in good health, and the examinations are mostly held in late spring and early summer. In such a place, with hundreds or thousands of people packed together for nine days, if the weather is bad, it’s easy to catch a seasonal illness. With the Marching Powder, we can ensure everyone’s safety.”

Liu San continued, “The words of scholars carry weight; everyone trusts them. Furthermore, they come from all over. From the county-level children’s examination to the provincial-level examination, scholars from all corners of the province will know about our medicine. No amount of money spent on hiring people to paste posters all over the empire can achieve such an effect.”

“Indeed,” Yang Shixiang smiled. “Doctor Liu, I never knew that besides being a skilled physician, you are also a brilliant businessman! You think of things that others can’t. Why don’t we become partners? We can also open a branch in Foshan! If we entrust all these matters to my cousin, I wouldn’t feel at ease.”

Liu San thought, That’s what I was waiting for you to say.

“We can discuss the partnership in detail when we get back. I have the same intention,” Liu San said. “But for now, it’s best not to open a branch in Foshan. After all, your cousin has just agreed to be our distributor. We need his help to sell our medicine in other regions, so we shouldn’t offend him. I think we can set up a representative office.”

“A representative office?”

“Yes, just like how officials set up a study in the city where their superior resides,” Liu San explained. For matters like gifts and promotions, it was best to handle them personally to prevent Yang Shiyi from taking credit. They could select one or two capable and honest clerks to be stationed there permanently to handle gifts, promotions, shipping, billing, and procurement. They wouldn’t even need a storefront.

“This clerk would have a great responsibility. Not just anyone can handle it,” Yang Shixiang thought. The person had to be not only honest and loyal but also presentable and capable of handling social situations. After much thought, he concluded that only Liu Benshan was suitable.

But Liu Benshan was the head manager of his shop. If he was transferred to Foshan, he would lose a key figure in his Lin’gao shop.

“I think Liu Benshan is a good choice,” Liu San said.

“He is the most suitable,” Yang Shixiang said with a sigh. “But then I would be short a capable manager.”

“Haha,” Liu San laughed heartily. “Shixiang, I must say again that your vision is too narrow. How much business can the Runshi Tang do in Lin’gao? It’s just handling some retail sales of medicinal slices and preparing some herbs. Manager Liu is already overqualified.”

Yang Shixiang thought about it and realized it was true. The Runshi Tang’s business was such that even with one fewer manager, it wouldn’t be affected. He agreed.

They then discussed the partnership. The Runshi Tang, originally solely owned by Yang Shiyi, would be divided into ten shares. Liu San would invest four hundred taels of silver and several tested formulas for four and a half shares. Yang Shixiang would contribute the Runshi Tang’s name, shop, buildings, equipment, inventory, and all other assets for five shares. The “Western family” of the shop would collectively hold half a share.

They drew up a contract on the spot, agreeing that neither party could privately transfer their shares to others without the other’s consent, and that the other partner would have the right of first refusal.

Yang Shixiang felt that he now had a strong backer. Although he had sold half of the Runshi Tang, it was bound to undergo great development from now on. The once-dim sign of the Runshi Tang could finally be polished bright. He thought of his father, who had struggled his whole life in Lin’gao, only to end up with a small, unsuccessful pharmacy, and died with regrets. He felt a sense of vindication. He couldn’t help but say to Liu San, “Doctor Liu! You are now also an owner of the Runshi Tang. Why don’t we become sworn brothers?”

Liu San readily agreed. The Executive Committee strongly approved of such relationships with the local natives, as long as they were useful.

“Brother Liu,” Yang Shixiang said, his form of address changing after the ceremony. “The matter of the Plague-Averting Powder and the Marching Powder is more or less settled. But a pharmacy can’t survive on just one trick. Do you have any other ideas, Brother Liu?”