Chapter 6: You Want To Do Black Market Trading
Second-floor bedroom.
Chen Yang took the towel handed over by the maid and wiped his face, just about to rest for a bit, when knock knock knock, a series of knocks sounded at the door.
Chen Yang looked up upon hearing the sound, and Second Brother Lin Xueyi was furtively peeking into the room.
“Second Brother, what are you up to?” Chen Yang couldn’t help but feel a bit puzzled seeing him like this.
Lin Xueyi cleared his throat and said to the maid, “Xiao Lan, you can go downstairs first. I have something to discuss with Young Master.”
“Yes, Second Young Master.” The maid carried the washbasin out of the room and conveniently closed the door behind her.
“Second Brother, what exactly are you trying to do?”
“Chen Yang, sit down. Second Brother has something to discuss with you.” Lin Xueyi said this and sat down on his own.
“Second Brother, what do you want to say?” Chen Yang asked gently.
Lin Xueyi said with a grin, “Actually, it’s not a big deal.”
“You know, I don’t get along with Dad and Eldest Brother.”
“After Mom died, my dad took Eldest Brother everywhere every day, talking about the eldest legitimate son, and hardly ever took care of me. Damn, does he really think our Lin family has a throne to inherit?”
“In this family, I have no status at all.”
“Unlike you, you’ve been smart since you were little and have good fortune on you. My dad treats you better than me.”
“Not to mention Eldest Sister. Back then, Eldest Sister lent Dad the solatium from Gao Jianzhong to do business, and in the end got back deeds for more than ten shops. Even if she broke both legs and arms, she could live comfortably for life.”
“Second Brother, what exactly are you trying to say?” Chen Yang listened as he rambled on and on, all complaints.
“Uh, back to the main point.” Lin Xueyi cleared his throat and said, “You’ve just returned to Shanghai and aren’t familiar with the situation here yet.”
“After the war broke out last year, the forces in Shanghai changed a bit. Previously, the biggest boss in the French Concession was Boss Du.”
“After the Japanese won, they kept trying to invite him to come forward and handle things, but he just wouldn’t bother. Later, he took his whole family to Hong Kong Island.”
“Once he left, now the biggest in Shanghai is Boss Zhang. As for me, a few years ago I pulled strings and became a disciple under Green Gang Boss Cao.”
“By seniority, I’m considered the same generation as Boss Zhang.”
“After Boss Du left, there was a vacancy at Sixteen Rows Wharf, and Boss Cao stepped in to help us secure a territory.”
“You know what makes the most money after a war—various materials, of course.”
“Second Brother, you’re crazy. You want to follow others and do black market trading?” Before Lin Xueyi could finish, Chen Yang already knew what he was up to.
“Crazy? Is there any business in all of Shanghai that makes more money than the black market?” Lin Xueyi said seriously, “I just want to make money.”
Chen Yang frowned and said, “Second Brother, I still want to advise you to think it through carefully.”
“Black market trading isn’t something ordinary people can handle, and where would you get the capital from?”
“We don’t have capital? Don’t we have you?” Lin Xueyi laughed, “You’re the future Director of the Economic Department of the Nanjing Restoration Government Ministry of Finance. You can control Zhejiang, Jiangsu, and Fujian Provinces plus the Nanjing-Shanghai area.”
“Materials are just a matter of you issuing a slip.”
Wow, so he’s set his sights on me.
Chen Yang shook his head and said, “Second Brother, it’s not that I won’t help you. I don’t even know what’s going on with this Director of the Economic Department position that Uncle mentioned.”
“Besides, can you be sure my slip will even work?”
Lin Xueyi’s face immediately fell: “Chen Yang, we all grew up under the same roof.”
“When we were kids and the family was so poor, we didn’t think of kicking you out. Now that you’ve made it, gotten promotions and rich, you don’t plan to pull Second Brother up.”
Chen Yang frowned: “Second Brother, let me ask you instead. Suppose I give you goods worth one hundred silver dollars, how much do you need to sell them for to have enough profit.”
Lin Xueyi sneered, “What? You want to test Second Brother? You’re underestimating me too much.”
“I’ve looked into it thoroughly. Even the thinnest profit items on the market like grains and oil canned goods and cotton cloth, after one round in the black market, one hundred silver dollars of goods turn into two hundred silver dollars.”
“One hundred becomes two hundred, two hundred becomes four hundred. Isn’t that pure exorbitant profit?”
Wow, this Lin Xueyi is naively adorable.
Chen Yang sighed and said, “Wrong. To do this business, the profit needs to be at least two hundred percent or more.”
“That means, for goods worth one hundred silver dollars I give you, you need to sell them for at least three hundred to four hundred silver dollars to pass.”
Lin Xueyi looked at Chen Yang with a face full of confusion.
Chen Yang said gravely, “Let me do the math for you. Suppose you sell one hundred silver dollars of goods for four hundred silver dollars. That one hundred silver dollars is what you settle with me after selling, and deducting another one hundred leaves capital for the next transaction.”
“Besides these two sums, you only have territory now, no suitable sales channels, no mature transportation supply chain, and no protections.”
“I know you want to say you’re under the Green Gang, so others won’t target you, but don’t forget, this is Shanghai, a place where people devour each other.”
“Black market business can’t stand up to scrutiny in the first place. Even if you’re targeted, you can only swallow broken teeth.”
“So, for maintaining these things, you need to give away at least thirty percent of the profit. Counting it as one hundred silver dollars, the remaining one hundred is your team’s profit.”
“I’ll use the simplest three-tier structure among you: upper level seventy percent, middle level twenty percent, lower level ten percent.”
“With your status, there must be more than just you at the top level. Even if I assume you’re partnering with two others, that seventy silver dollars split three ways, you get just over twenty silver dollars.”
“You take such big risks and do all this work, and the profit you end up with is just twenty-three percent.”
“Do you think you can handle this kind of business?”
“No, no, this accounting shouldn’t be done this way.” Lin Xueyi shook his head repeatedly, but couldn’t come up with a rebuttal.
Chen Yang patted Lin Xueyi’s shoulder: “Second Brother, listen to my advice. You’re not cut out for black market business.”
“But if you really want to do this business, I’ll give you an opportunity. Have your leader meet me.”
“Your status is too low to make this decision.”
Lin Xueyi opened his mouth, but after a long while said nothing, silently got up, and muttered as he walked: “Only twenty-three percent? No, there must be something wrong with this calculation, but what’s wrong with it?”
Hearing Lin Xueyi’s muttering, Chen Yang couldn’t help but chuckle to himself: “With a brain like that, still wanting to do black market trading. He wouldn’t even know how he dies.”
In fact, this calculation is of course incorrect.
Because doing business is calculated with cumulative volume, not routine volume calculation like Chen Yang did.
Simply put, doing business is a process of continuous accumulation, not a fixed profit-sharing model.
