Chapter 98: Monthly Profits Reaching One Hundred Thousand
March 1st arrived quickly.
Inside Changxing Industrial's new factory, all 36 machines were running at full speed.
After touring the plant, Yang Wendong and Su Yiyi returned to the office near the main workshop entrance.
Back at the old factory, the office space had been pitifully small. But now, with the move, everything was on a different level. Yang Wendong had a private office of over 200 square feet (about 22 square meters).
Other team members each had their own office spaces, either shared or independent. Manager Wei Zetao had a slightly smaller private office, while the finance team shared one. Other departments like production, procurement, and sales worked in a shared space.
No one felt cramped.
Sitting at his desk, Wei Zetao heard footsteps at the door. Looking up and seeing his boss, he stood up with a smile. "Mr. Yang, Miss Su."
"Old Wei," Yang greeted with a smile. "Any news from the U.S. these past couple of days?"
Wei replied, "Yes. I got a call last night. They're asking us to ship even more Post-its as soon as possible.
According to Mr. Robert, the initial air-shipped batches have sold extremely well in both California and Nevada. Demand is booming from companies in both states."
"Nevada? I thought Robert said they were only launching in California first?" Yang asked, a bit surprised.
Previously, when he was handling everything solo, he managed all customer relationships himself. Now that the team had grown, non-core negotiations had been delegated to Wei, who not only had management experience but also spoke fluent English.
In Hong Kong, even British expats with influence needed to speak Cantonese. For a Chinese businessman to succeed, English was essential.
Of course, Wei didn't need to sleep at the office waiting for international calls like Yang used to. He had a phone at home, and the main international clients had all been given his number.
"I didn't ask. It's not a major issue. Maybe the two states are close, and word spread naturally," Wei explained.
"Hmm. Doesn't really matter," Yang said casually. "But we can't keep air shipping in bulk. How fast can we get large shipments to the U.S. by sea?"
"I've looked into a few shipping lines that specialize in U.S. routes. The fastest ship takes only two weeks to reach the West Coast—including the Port of Los Angeles," Wei replied.
"That fast?" Yang asked in surprise.
"It's a passenger liner with cargo holds. Those move faster than regular cargo freighters," Wei explained.
"A passenger cargo liner? That's perfect—fast enough," Yang nodded.
In the 1950s, cross-continental travel was still mostly done by sea, not air.
The first reason was cost—ships were much cheaper than airplanes, even if slower. After World War II, global economies couldn't yet support mass air travel. Except for urgent business trips, most people chose sea travel.
The second reason was safety. Aircraft technology hadn't matured yet. The Boeing 747 hadn't even been released, and most people were still wary of new technology.
Several Hong Kong shipping companies operated long-distance passenger ships. Since these weren't regular freighters, they traveled faster—offering a good balance between cost and time.
Wei added, "It does cost a bit more than regular shipping, but right now, fast turnover is more important than saving a few bucks. Paying a bit more to ship faster is worth it."
"Absolutely," Yang agreed. "The sooner we get the product to the U.S., the sooner we get paid. That's what really matters.
More payment records will also make Liu Chong Hing Bank more confident in us."
Wei nodded. "At this rate, we might be able to pay off the bank loan in just a few months."
Yang shook his head and laughed. "We can pay it off, yes—but that doesn't mean we should.
What's important is maintaining our credit and economic strength. The more capable you are, the less you should rush to repay loans. Instead, borrow more.
Right now, we can't even meet the demand of just two U.S. states—let alone Europe or Japan."
There was an old saying on the internet in his past life: banks never throw you a lifeline in a storm—they only show up with flowers when the sun is shining.
And from a business perspective, the logic was sound: when you're making money—or sure you will—you borrow. When you're unsure, don't take the risk.
Wei laughed. "That's true. Doing business means knowing how to use bank money wisely.
Mr. Yang, I also have some contacts in Europe and Japan. We could explore those markets through them."
Yang asked, "They're traders, right? How strong are their connections?"
Wei answered, "They're not as powerful as 3M in the U.S., no. Most of them worked with us before on plastic flowers, toys, or household goods. But they don't require exclusive rights."
"No," Yang rejected outright. "But keep the contacts. They're not suited for Post-its, but we might work with them in the future on other products.
Post-its exist because of our patent. That's what guarantees our profit margins.
For Europe and Japan, we need partners with real power—distributors with resources and influence.
I don't want 3M to monopolize our global distribution, but if the alternative is weak middlemen, I'd rather double down on 3M."
A strong distributor could at least ensure no mass piracy within their territory.
Patent law only worked effectively when enforced by people with the right connections. Even in the most just legal system, lawsuits cost time and money. If the market was already saturated with counterfeits, the damage was often irreversible—sometimes you won, but got nothing.
Wei nodded. "Understood. I've already instructed my team to begin researching reputable office supply distributors in Europe and Japan.
That way, whether they discover Post-its through the American market and approach us, or we go to them proactively, we'll have the data ready.
It'll take some time, though."
"No rush," Yang said with a smile. "We probably won't even be able to fully satisfy the U.S. market for a while."
Even in the future era of mobile internet, finding out who the number one distributor of office supplies was in another country wasn't that easy—let alone now.
The only reason Yang had felt confident giving U.S. distribution rights to 3M was their global reputation.
And at the time, he had no better choice. But now, as shipments increased and the company's financial health improved, he had more room to make careful decisions.
Wei said, "Got it. I'll keep tracking potential distributors in Europe and Japan. Even if we're not in a rush, it's better to gather intel early so we can plan ahead."
"Alright," Yang Wendong nodded. "Our profit margins in the U.S. market aren't low, but they're not extremely high either. Now that we've broken into the American market, we'll have much more leverage the next time we negotiate with distributors in Europe or Japan. Maybe we can even raise our prices slightly."
Wei Zetao smiled. "Exactly. As long as sales are strong, we should absolutely increase the price. When plastic flowers first came out in Hong Kong, they were very cheap. But once they started selling like crazy, the price was raised several times."
"Right. It's a basic supply and demand issue. Plastic flower factories still have competitors. But legally speaking, my Post-its shouldn't have any," Yang said with a light laugh.
From an ordinary business perspective, as long as you're not controlling basic necessities like rice, oil, or salt, pricing up or down is just standard market behavior. Business exists for profit—no one is forcing customers to buy.
Wei laughed. "If the Post-it business takes off, Mr. Yang, your net worth will easily place you among the top Chinese elites in Hong Kong."
"Only if we ensure exclusivity. That's why we need powerful and trustworthy distributors," Yang nodded.
Historically, Post-it notes were one of 3M's core products, generating over $1 billion in annual net sales.
Though that figure comes from the 21st century—and would be much lower if adjusted for inflation—even so, tens of millions in yearly sales shouldn't be a problem.
"Exactly," Wei nodded, then after a pause, asked, "What about glue traps? Some of my contacts are interested in distributing those."
Yang asked, "Which markets are they looking at?"
Wei replied, "Some are interested in Europe and the U.S., others in Southeast Asia and even India."
Yang thought for a moment. "For Southeast Asia and India, go ahead and sell—doesn't matter how or to whom.
But for Europe, the U.S., and Japan, I intentionally didn't grant exclusive rights to earlier trade partners. I'm still looking for someone with solid connections—like we did with the Post-its."
Wei considered this and said, "That's doable, but Post-its are a B2B product. End-users are companies, so the number of customers is small, and each one orders a lot.
But glue traps are used by everyone. It's a broad-market item and will require a multi-layer distribution network."
Yang nodded. "Even so, we still need a master distributor. We can't handle hundreds of accounts ourselves in the U.S. If our shipping is scattered, we'll lose cost control."
"Then we'll follow the traditional model," Wei said. "We sell to one main U.S. distributor, who then has sub-distributors under them.
Each layer uses its own network until the product reaches the end consumer.
Even Coca-Cola operates this way. That bottle of Coke on my desk likely passed through several layers of distribution.
In Hong Kong and much of Southeast Asia, Coca-Cola relies on the Swire Group for sales. Even giants like Coke depend on channels."
Yang laughed. "Exactly. That's the kind of master distributor we need."
Wei added, "But we should be clear—mass-distributing glue traps to Europe or the U.S. won't be nearly as profitable as the Post-its."
"I expected that," Yang replied. "I never counted on glue traps making us rich. As long as they help us provide jobs, that's good enough."
Wei added, "Our products are actually very export-friendly. They're light and easy to ship. Other goods, like Coca-Cola, have to be produced locally due to their weight."
"That's something I like about our product line," Yang smiled. Then he asked, "Speaking of profits, how's our Post-it performance lately?"
"Got it." Wei quickly pulled a folder from the desk and laid it out for Yang. "Dongsheng's machines mimic the Japanese ones.
Each one produces about 100 Post-it pads per hour. With 36 machines running, that's about 3,600 per hour.
We're running 24/7 shifts—workers rotate, machines don't stop. After accounting for downtime, maintenance, and production errors, we average 70,000–80,000 Post-its per day.
At our export price, that's roughly HK$7,000–HK$8,000 in daily revenue."
"Seven to eight thousand per day?" Yang nodded.
The current pricing was 1 USD per 50 Post-it pads. Based on the exchange rate, that was indeed around HK$7,000–8,000.
Wei continued, "Once we deduct all costs—equipment depreciation, rent amortized over five years, labor, utilities, taxes—our net profit margin is about 40%. That means we're earning about HK$3,000 a day in profit."
"Three thousand a day? That's HK$100,000 a month!" Yang laughed.
In this era, HK$100,000 had staggering purchasing power. To give context, that amount could buy two luxury 1,000-square-foot apartments in Central.
Those same properties would be worth tens of millions in the future.
Of course, that's based on comparing the most inflated real estate values. Compared to gold or food, the number isn't quite as crazy.
Still, it was a massive profit. Without holding the patent, making HK$10,000 a month from such a simple product would've already been impressive.
Wei added, "But we should remember—according to our agreement with 3M, cross-continental shipping is technically our responsibility.
Recently, 3M covered the cost because of the urgent need to air freight products for initial market rollout, which saved us from paying for ocean freight.
But going forward, we'll have to pay those shipping costs ourselves."
Yang nodded. "So if we were to ship a day's production using a passenger cargo liner, what would that cost us?"
Wei replied, "At current production levels, it'd be around HK$300–HK$500 per day in freight costs.
It depends on global shipping rates and available sailings. Also, since our product is moisture-sensitive, we paid extra for central cargo holds to ensure better protection."
"Shipping really is a high-margin business," Yang said with a wry smile. "Just for a few boxes of Post-its, we're paying hundreds."
Despite their relatively compact size and high value per unit, shipping costs still ate up 10–15% of their profits.
For larger, heavier industrial goods, this would be completely unaffordable. Before the widespread adoption of containers, ocean freight was often more expensive than rail transport.
It was the global adoption of container shipping that made modern international trade viable. Without it, many developed countries would've retained their domestic manufacturing.
The rise of containerized shipping was what enabled the West's deindustrialization.
Wei nodded. "That's just how the shipping industry works. Over the past few years, more and more Hong Kong tycoons have been scrambling to get into maritime logistics."
"Yeah, it's true," Yang said. "At this point, shipping magnates are more respected than real estate tycoons. The latter aren't even in the same league yet.
When times are good, a single cargo ship can earn millions in a year—more than the ship itself is worth."
Wei added, "Luckily, we're paying extra for speed. If we were shipping slower goods—like glue traps—the cost would be much lower."
"Speed matters," Yang agreed. "Let's keep ramping up our training. Once the workers are fully up to speed, we'll need to expand production and buy more machines."
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