Becoming Rich with Daily Scavenging APP-Chapter 441: Payment Terms Issue

Ali organized a hunt.

Heartbeat wants to take advantage of the situation.

Tengxu is watching from the sidelines.

Yang Chengru can’t help over here. Ali has blocked all the local forces in Lin’an that Chen Yiyang could turn to for help.

Chen Yiyang is facing difficulties, and Yang Chengru also needs to deal with a battle in the official circles.

Right now, both are doing well if they don’t hold each other back, let alone get help from one another.

After leaving Yang Chengru, Chen Yiyang called Liu Qiangxi to communicate.

"I know you’re under a lot of pressure over there," Liu Qiangxi said, "Honestly, if it were before, I would definitely help you. Jindong is still under my control; lending you money is just a word away.

But now our food delivery war with the Ugly Group has turned into a long-term battle. Jindong also needs a lot of cash to ensure we don’t lose in this fight."

"I’m not looking to borrow money," Chen Yiyang said, "I want to ask if the subsidy money for the food delivery side can temporarily be fully paid by Jindong, and I’ll repay Jindong once my cash flow improves."

"I don’t think that’s possible," Liu Qiangxi said, "The other senior executives and shareholders of Jindong wouldn’t agree. But if you’re willing to sell your shares in instant retail and Jindong’s food delivery to Jindong, then Jindong can come up with some money for you."

"Alright, I understand," Chen Yiyang nodded.

Chen Yiyang had no objections to Liu Qiangxi’s response.

The war in the food delivery field was indeed started because he dragged Jindong into it.

It’s indeed not feasible to expect Jindong to subsidize alone now.

Chen Yiyang was just trying to ask.

Jindong did not participate in the hunt.

But it’s hard to say whether the Ugly Group did.

If Chen Yiyang can’t keep up with the subsequent funds, he might choose to sell instant retail to Jindong, which would let Jindong continue the fight with the Ugly Group.

So the Ugly Group wouldn’t benefit from participating in the hunt, but even if they didn’t participate, it’s actually like they did.

After all, the Ugly Group doesn’t look like they’re in a rational state now. Logically, when the subsidy war turns long-term, both sides should gradually cool down together, keeping the subsidy within a range.

But the Ugly Group has no intention of cooling down, they are still continuously issuing coupons.

This won’t crush Jindong, but Chen Yiyang, who holds over half the shares in instant retail, definitely won’t withstand it.

Since there is no breakthrough method in the food delivery industry, let’s see if there is a turning point in the automotive field.

Yiyang Automobile’s domestic production hasn’t officially started yet.

But they’ve already found a batch of parts suppliers before.

Now these suppliers’ demand is to shorten the payment period.

Chen Yiyang didn’t bother negotiating with each one, so he called them all together for a negotiation.

"A four-month payment term should be the average level in the domestic automotive industry. I don’t know why you are all fixated on this to attack Yiyang Automobile."

Chen Yiyang tapped the table with his fingers and continued, "As far as I know, Biya Mansion, Qirui, Jili, these companies’ payment terms are all over four months, not to mention that these companies sometimes use commercial bills to pay instead of cash directly.

Yiyang Automobile can promise you that all our payables will be settled in cash directly."

Any heavy-asset enterprise has to face an important issue.

That is, due to high costs, they need to produce products first and sell to consumers, receive the money, and then pay their suppliers.

In the new energy vehicle industry, the unified payment term is around 120 days.

When the time comes, even giant companies like Biya Mansion will not have enough money to pay for goods.

So companies like Biya Mansion use commercial bills to pay.

The so-called commercial bill, the most famous might be Hengda’s commercial bill.

Back then, when Hengda paid suppliers or construction units, most of the time it was with Hengda’s commercial bills.

This kind of bill is recognized by Hengda to buy things or services from them.

It’s equivalent to a bond backed by Hengda’s own credit.

But if suppliers want to use these commercial bills as cash, that’s impossible.

At most, some investors are willing to buy them at 70% or 80% of their value, and then go to Hengda to cash them out.

Of course, after the news of Hengda’s bankruptcy came out, no one would buy these bills even at a 10% price.

The money Hengda owed back then, apart from what it borrowed from investors, also largely included the commercial bills issued by Hengda.

The final scale of unredeemed commercial bills even reached one or two trillion.

Of course, after Hengda’s bankruptcy, the reputation of commercial bills was tarnished.

So companies like Biya Mansion have renamed their commercial bills, for example, Biya Mansion’s is called Di Chain.

Also, because of the painful lesson from Hengda’s commercial bills, now these commercial bills are just delayed payment invoices, hardly circulating and not purchased by investors.

And Chen Yiyang’s willingness to pay in cash is actually quite commendable.

"A four-month payment term is already outdated."

A supplier spoke up, "Currently, Yiqi, West Wind, and other automobile manufacturers announced they want to maintain the payment term in the automotive industry at about sixty days.

If the payment term can be shortened to sixty days, it will reduce the pressure on our entire supply chain, benefiting the whole industry.

So we hope Yiyang Automobile can also reduce the payment term to about sixty days."

Sixty days.

Chen Yiyang frowned.

Traditional car companies might achieve a sixty-day payment term because of their accumulated cash.

But new energy car companies, which are still in a growth phase, absolutely can’t meet a sixty-day payment term.

They simply don’t have that much cash on hand.

Chen Yiyang can’t expect to receive parts from suppliers, spend a month producing cars, half a month selling the cars, and another half a month collecting money to pay suppliers, can he?

If that’s the case, any accident on the dealer’s side would spell trouble for Chen Yiyang.

Because although dealers technically pay in full before collecting cars from the factory, in practice, since most dealers don’t have that much cash, the usual practice is that dealers mortgage the cars and car certificates that they haven’t yet purchased to the bank.

The bank loans to the dealers, the dealers pay the manufacturers, and the manufacturers guarantee the dealers.

Once dealers sell the cars, the consumer payment actually goes directly to the bank.

Once the bank receives the money, they release the cars and car certificates.

If dealers go bankrupt for various reasons, manufacturers might have to pay the bank due to their guaranteed obligations.

So using a two-month payment term, any problem in the car sales process could affect the manufacturers, causing them to disburse a large sum of cash in a short period.

A two-month payment term leaves no room for buffers.

Chen Yiyang can never agree to this condition.