America 1919

Helen thought for a moment and said, "Are you referring to the A&P business model?" A&P started in 1859 with mail-order tea, which can be regarded as one of the earliest forms of retail in the United States. Before then, Sears, Roebuck and Company, which went public with the help of Goldman Sachs, also started with mail-order. A&P formally entered the retail business at the end of the 19th century. At that time, the price of tea was exceedingly high, so the company used mass purchasing to lower the cost of goods and then promoted the practice of low-profit multiple sales through advertising. Later, around 1878, the US Congress significantly raised the tariffs on tea and coffee, causing the profits from these two businesses to plummet. As a result, A&P began to venture into the retail industry. Initially, the company adopted the traditional street corner shop model, but differently, A&P's shops were all chain stores, using a unified logo. However, there was no sharing of suppliers. This was the first chain store in American history. Under George's leadership, by 1900 A&P had 196 little stores, employed more than 1,800 people, and its sales amounted to 5 million US Dollars, while that year, Sears made only 1.1 million. Then by 1912, A&P had 400 stores in the United States, with an average gross profit margin of 22% and a net profit margin of 2%. At the same time, A&P was the first retailer in the United States to use cash registers, and one of the earliest to use discount coupons. Now, A&P has more than 8,000 stores, with annual sales exceeding 800 million US Dollars! Donnie was not very familiar with A&P. After hearing Helen's explanation, he gained some understanding of A&P's situation. "It's that kind of model, but we need to do it even more advanced than them," Donnie reflected. After thinking for a while, Helen did not dismiss Donnie's idea but expressed her opinion, "Copying A&P's business model isn't difficult, as several retail companies are already learning from it. The real challenge is, if we want to do it, we have to think big right from the start, and that involves many professional issues." First, we need a leader with extensive experience in the retail industry, and a professional management team to lead! Second, if we start big, the required funds will be a massive figure. Third, we need stable suppliers. On this point, I believe A&P will definitely cause us some trouble. Fourth, the circulation and storage of goods. Fifth, a mature sales team is also necessary. I've been to an A&P store, and the salespeople there are very professional." "Hold on, hold on!" Alice looked at Helen dissatisfiedly and said, "Donnie's idea is great, why does it sound so troublesome when it comes to you?" Helen gave Alice a sidelong glance, "Put away your brainless wit. If we can't solve these problems, Donnie's investment will just go down the drain. Do you want to see Donnie lose money?" "I!" Alice looked at Helen indignantly, not knowing what to say. Tapping the sofa, Donnie pondered for a while and said, "The first issue is not easy to solve right now, as I indeed don't have such a person by my side. We can put it on hold for now. The second issue is actually easy to solve. The profit from the private liquor business is getting better and better. Although the IRS has stopped investigating us, Surf Hotel has been under quite some pressure recently. If we could reinvest that money into the creation of the chain stores, that would be a good strategy!" The private liquor business could bring in 10 million US Dollars a month for Donnie, an astronomical figure at the time. Not just any ordinary public company, but even the US financial magnates couldn't ignore such an income. "As for the third issue... A&P will indeed cause us trouble, but I think those suppliers aren't fools. As long as we can expand our chain stores at once, they won't give up such a large market. However, this needs to be resolved by the company's professional management team, so it can be addressed along with the first issue! The fourth problem is not a problem anymore. United States Logistics has already opened up transportation channels throughout the country and has storage in several major cities. We can definitely share all of United States Logistics' resources with the liquor business and the chain stores, which could also resolve the financial issues of United States Logistics!" There had always been an underlying problem with United States Logistics. Before this, both Chris and Robert had discussed this with Donnie. Since United States Logistics had always been serving Donnie's private liquor empire, their earnings and tax affairs, although managed by Café Jackson, were in a mess. Now, with the chain stores in place, United States Logistics could move from the shadows to the spotlight, becoming a company that no longer worried about investigations! "As for the fifth issue... it needs a professional management team to be resolved eventually. Since the construction of the sports stadium will take over a year, we can definitely use that time to train more sales talent." By now, all three people in the room had pretty much understood that the most important issue facing Donnie was the need for such a professional team! Alice, who had just been counterattacked by Helen, stood out again. "I happen to know someone who could help you solve this problem!"