b.3rd Country - Feelings (Part 5)

The last part is here:   3rd Country - The Awakening (Part 4)

A rolling stone never gathers moss. Sad but true. But, if we use foreign exchange to our advantage, then there is a possibility to live happily ever after.

Living in Buddhaland? A slum? You must be kidding. They have one of the most beautiful and nice gals on earth. Their food is one of the best in the world. That sourness is poorly replicated in pinoyland. Pinoyland also has all kinds of sourness - sour pork, sour veggies, sour noodles, fuck! everything is sour. My friend from there refused to visit me for the longest of time. He had at least 20 gfs to boot. He lives like an emperor on earth. His wifey don't give him shit, even though she graduated from the very top university on earth. See! Buddha taught her well. His refrigerator factory is the largest in Buddhaland. Once, he even asked me why did I spend my useless life in that fuckened little island? He couldn't understand. He now partnered one of the largest car manufacturers in the world for spare parts. Opportunities are so immense that he couldn't understand why I am worried about having a shelter over my head?

Like yoda in the star wars, we must learn to search our inner feelings. We must not be bothered by earthly distractions. Flow (leave) if we must. There should never be a feeling of loss. The feeling of loss is just temporary, it is a tool used by the white fuckens to hold us back. There is no ties. There is not even an identity.

Even if I am super poor, my simple salary saved (after expenses) as a grain collector in white land can buy me a full landed house in 1 year in a nice place within the capital in all of the 3rd countries. Within 10 years, I would have owned more than 10 houses. How can that be sad?

The Legend Retold has gone to the white casino with a huge mudland's flag floating today. Guess what? The white casino is opened by the casino in the mudland. He spent happily. He is at last home. No more french fries, no more tongue-twisting words. His kiddos refused to join him in his home coming, but I think given time, this path would again be replayed through the generations to come.

Once I was in Congland. The fucking chinatown spoke only Cantonese. The restaurant owner asked me how was that fuckened little island? I asked why? She said she was once from there but she was forced to move. I asked why again?  She said she was wanted by the white fuckens for drug trafficking. Wow ... Now she owned houses, restaurants and nice hotels. She asked me to deliver something back to her mum without tracks. I replied humbly yes. She gave me a treat in abalone and seafood. She said eat at her restaurants and mentioned her name. The restaurants would not bill me.

Looking back ... I do have many true friends I met along the way. All true and without pretence. Maybe, that's the way it is. A true path for the weary ...

This last part ends the essay on the 3rd country. I have not visited budland nor camland. But I am sure they are not so bad. It is just a matter of freedom of choice. My friend runs a 5-stars hotel in budland. He would have given me a headstart too.

Lastly, for those who love the cooler weather and loving connection to the white fuckens, there is also the geniland not far away from the large land of the south. Everything the island has are smuggled from the white fuckens of that fuckened little island. That CCB white fuckens claimed that they were legitimate tradesmen from government-linked companies. CCB. Currently, geniland don't even have a McDonald nor escalator yet. Just achieved independence. Good fun playing there too. My friend is a senior banker in Asia Bank. He would give a leg up there too if I so chooses. He said good food, good body guards, good hotels and good gals.

Afternote:
Oops! Just check the map, there is also lousyland too. So many choice.

b.Contract - Roughing In

The last part is here:   Contract - The Art of Bargaining

I thought I am the yellowskin smart-ass. I am dead wrong. There are indeed people who go beyond logic and reason.

This person I know brought the art of bargaining to god level. He got 20 vehicles all in working conditions for FREE, while I paid thousands of dollars for just one. He bought 8 freehold housed properties for a total of a couple of thousands of dollars just few years back, while I paid several tens of times for just one. He's now my fucking neighbour, beside me. He paid $20 per full door (new) while I paid $300 per pop and still thought I got a devil's bargain. He paid $200 for 300 pieces of lumber, while I paid $5 per piece = $1,500. WTF! I really must remove my stench from that fucken little island. My lenses are now tinted by the high prices.

So being humble is important to learn from these great artistes. He is no con-man. He's deadly friendly and sincere in his dealings.

Now, because of his help, I managed to rent rooms while I travel for $200 per room per month with full speed internet, heating, cooking and washing.

Now the white agent has been touting me to do my passion business VI - rent-to-own. She said there are millions of renters waiting for my suggestion.

With this neighbour's help, I am sure this passion business vi will fruit.

There are earth-worms and there are more earth-worms. Seek them out. All things shall be given unto thee ... (for free)

b.Contract - Lethal Combination of Patience and Money

The last part is here:   Contract - The Art of Bargaining

It has been quite a while when I wrote the above essay.

Buying

In this cyber age, everything you want to buy is made available on the internet. As the internet has the biggest suppliers' base, the price you can expect would be the most competitive, don't hope to get anything cheaper from newspapers or magazines. It doesn't pay to waste your time browsing these resources. You only need to trawl the internet for bargains. Once you get the hang of things, i.e., the websites that produce the best bargains. Logged them down and visit them on a daily basis.

Say, if you want something, save approximately enough cash for it. Then, watch the websites for the bargains. Be extremely patient, your days of watching the "market" would reward you with knowledge, the frequency of site visits, the basement prices and how the sellers transact. If the data is too overwhelming, log them down using a spreadsheet. It pays to be detailed.

You will soon notice that these websites would continuously produce desperate sellers of the things that you need, every once so often. If you miss the first time, don't worry, the next desperate seller will come along soon enough. Even if you miss the second time, no worries to that. You will soon be rewarded with a third time. Even if you lose the third time, there is always another good time down the road.

How do you identify these desperations? You have to be extremely patient, you can feel the desperation in between their words in their advertisements. Once you sense it, don't be too eager to call immediately. Leave it for a few days. Call the seller and then do a viewing and see if you like it. Use the technique I have highlighted in the previous essay. You are good to go. Don't feel embarrassed about bargaining. You are a yellowskin, you have no pride. Cut him down by at least 20% and stay there, or if you are more fierce, try 30%-40% down and creep up slowly.

Buying land is no different. Always remember there is no land that you must have. There is always another land that is sexier than the one you just missed, i.e., a bigger hill, a bigger river, a bigger lake, a better weather, a bigger size, and etc.

If there is a competition for the same thing, learn to let it go. It is no biggy. I have said that before. Competition kills bargain. Once the thing is not at basement bargain price, it is not worth anything.

The other opportunity in buying is by word-of-mouth: If you have enough contact, you may smell bargains from your friends. But, I still feel if the seller is desperate enough, he will go straight to the internet and try to get the deal done soonest.

Selling

I am not so much into selling. Again the internet is the best place to sell small things. If you must sell, then go to the internet to sell it. If you are not in a hurry, you will get your price, otherwise you would be punished for being desperate. The same rule applies.

Actually I prefer selling through human touch. Try selling your things using face-to-face contact. Painful but effective. You will get the best price for the deal.

In my business, every time I sell is major account building, i.e., once the buyer bites, he will continue to buy with or without my constant support. I normally leave it to the sale team to manage the buyer's expectations. I only intervene when there is exception handling.

Things that I bought, I will try to use them till they are beyond economic repair. So selling great is not so familiar to me.

b.Contract - Buying Season

The last part is here:   Contract - Gap down

Never buy during the spring and summer seasons. The ground is sweet and the roads clear. This is the time that every monied guy is out prowling. So the chance of you getting what you want is not very high. Even if you can get it, the price would be bad, bad, bad and of little discount. Since we are talking about a long, long 16-year depression, you have loads of time to get those land of your choice. Exercise extreme patience. Close off for the year and wait for the coming of winter. When winter comes, the bitterness of winter will bite their souls. They will be weak. The price would be fancy.

If you have competitor(s) for the land, let it go. The land is not meant for you. The price will never be right. Why can't we compete with them since the land is so juicy to collect? The answer is a big fat NO. Any slight inflational push on the price would have rendered the land not attractive. Learn to see value where no one sees.

Over in white land, the chinamen rush for residential properties mostly. If you pit yourself against them, you are in deep trouble. You use honest money and they use corrupt money. You can never win. Game them in other arenas. Work them out and tire them. Employ wit. Trap their armies within the cities. Praise their "wise" and "expensive" choice. Praise their "no-enemy" seaview.

You need not fear as you already collected land that have entire rivers passing right through. So my heir(s), you will have a waterfall soon. That will reduce you reliance on external water source. This waterfall water source will last you centuries. Build businesses that use this water supply. You will never die unless earth dies. Without a permanent water supply to boot, you will one day suffer the same fate as that fucken little island, i.e., processing and drinking shit water.

b.Contract - Gap Down

(Click on the picture to see an enlarged version of the chart.)

The last part is here:   Contract - The fairness of the Whites

If you have traded in stocks and shares, you would have come across this phenomenon. But, not many people managed to learn from this tool. Simply because either the traders are too early or too late.  Only after the event, then the traders realised the gaps have happened. But, the traders were seldom part of the fun.

The tempo of  stocks and shares trading is way above that of the land trading, hence, not many opportunities to see these gaps in land deals in real life. Coupled with the fact that the land transaction volume is usually low, many gaps are masked by the general trend of the market. There is therefore a need to come out with a methodology to handle these gaps.

Gaps are extremely profitable.

Land is different from shares. In shares, there would be too many shareholders and each holds identical shares. They will deal with you only through the price mechanism. Land deals are different. Each land, property or building is different. Some have good conditions, some have poor conditions, some have restrictions, some are near the road, some are rural and some are irregularly shaped. Each land simply has too many variables and factors influencing the final selling price. Coupled with the fact that the seller is only an individual, it is thus very easy to play the game.

Land ownership is one of the most expensive assets a person can hold. Hence, he can at most hold a couple. With the fact that these lands are seldomly traded and unupdated present market condition, the owners were extremely inexperienced in transacting a good price. Further the so-called seller agents are turn-coats of the monied buyer. The game is badly one-sided. Of course, one feels bad about reaping the sellers off. But, do rest in the comfort that as a buyer, you are already a late comer in the land game. The land prices have already risen to stratospheric level and you have only just begun. So don't worry too much about fairness. You as a buyer is already unfairly disadvantaged.

There are many reasons behind why the seller wants to sell the land. It could be gambling, no income, illness, sudden need, encashing a good buy and etc. I am not going into any of these, the seller wouldn't tell any way.

Say, for example, a land costs $100. Through very careful survey, when you decide to buy you are already willing to buy the land at its offer price of $100. If this is your first deal, you would be slightly disadvantaged. Trust me, you would show too much interest and the price you finally deal would be bad. Fortunately, you are helped by your initial careful survey, the land is already considered reasonable even at its original selling price. Any discount is considered your year-end bonus.

You don't know if the seller is desperate or still strong. You have to assumed that he is weak. If you return an offer of $80 (20% down), you will normally end up buying at $90 (10% down, mid-point). If you return an offer of $70 (30% down), you will normally end up buying at $85 (15% down, mid-point). Some time ago, I tried returning an offer at 50%. It was a disaster, the seller smelt my insincerity to deal, he stopped bargaining and firmly stuck to his original selling price. I ended up buying the land only at $88 (12% down), hardly any big deal.

Depending on the situation, return a price between $60 to $70 (40% - 30% down), the seller would be very stuck. This return offer is so painful that usually the seller can't sleep. This is a price that the seller would sweat to no end. It is painfully low but yet not low enough for him to feel insulted. If the seller is desperate and he will be sleepless for 30 hours and then he will collapse and gave in. You might end up buying the land at 30-40% discount from its original price. You have achieved a gap down. At its worst case, you will still have a 15-20% discount (100%+70% /2 and 100%+60% /2) from the original selling price. Not too bad.

Sometimes, it is very hard to return at such low price, you will feel bad vibes, ignore these feelings, you need to stay humble and repeat that mantra to the seller agent that you are very poor and the banks are not-yet-your-good-friend. Your seller agent will become your turn-coat in no time. It is extremely difficult to reject a monied man no matter how poor. LOL.

The cunning Asians of course are too smart as they have enough practice.

Caveat Emptor

A friend once asked me why don't I go for the kill since I know the seller is weak? I gave her a good tongue lashing. Never work the seller to the ground. It is very cheap for him to buy poison to do you in, your land would be useless for years to come. It is also too easy for him to buy cement powder to pour down the sewerage on the day of your taking-over. Never play the dangerous game. SunTzu said it is always wise to block three sides of the encirclement leaving an escape route of one side (your desired escape route for the enemy). A standing-to-fight-till-death enemy is worth 10-1 odds. So don't hurt yourself even if you are winning easy.

Be that most poisonous cunning smiling despicable me.

b.Contract - The fairness of the Whites

The last part is here:   Contract - The Colours of People

Whenever I needed services or contracts, the most natural thing to do was to contact all my kakis and asked them for their best recommendations.

How wrong! These kakis to their best of intention always recommend me their best contacts and services (usually ex-countrymen). But, the rates were deadly bad.

Now I understand why this is so: These contacts are usually already quite successful in their fields. So any recommendations that come through the grape-vines are just additional business to them. It is just icing on their cake. it is not bread-and-butter survival issue for them. Since I am not their friend or anything close, they always try their luck by quoting higher than market. If successful, nice hit, otherwise, tough love. No hit sustained. I am no friend to them anyway. They simply refused to be a hard-working cow.

After understanding this, I have since moved away from contact recommendations. The internet is now my best friend. Advertisements in the internet are usually almost free. Due to this, the goods/services are normally marked lowest possible. Hence, in the internet, I can find the best deals. If I don't like it, I moved on. Else, I will just take the listed services/goods for trying, after all it is always almost competitively priced. There is no further need in getting frustrated doing friendship tests.

That being said, I also now prefer to deal with the whites. They are extremely fair. One recent case, I pressed the panic button when I realized I have to pay a certain fee, without my knowledge, prior to engagement. But, the white said since I was not informed of the fee before hand, the fee was waived. it was that simple. This was not the only case, I have several previous experiences too. It was not because my fees were waived and hence, I found angmo tio kee. It was their attitude towards trying to be fair at all costs impressed me. They had motivated me to be as fair as possible myself.

Indeed, this is a good thing. I have also learned to pay what's due to Caesar.

b.Contract - Mister 20%

Just completed a course on how to keep bees. It is coincidental that asingaporeanson also talks about keeping bees.

Originally I wanted to file it as a follow-up to g.That straight narrow path (part 1) and not b.Contract - The Art of Bargaining (part 1).

But, the context seems to be more of a contractual issue rather than a business idea issue.

When I stepped into the course, almost all attendees ignored me. I was the only yellow-skin in the course. Over the course, I have asked several questions and were totally ignored by the speakers and attendees.

I have indeed intruded into their space. They prefer not to teach me anything and expect me to find out all by myself. Racism again? Possibly. They felt that the yellows have intruded into their comfort zone. What they are sharing with fellow whites are not meant for yellow's ears.

When I finally completed the full course, the cashier enthusiastically asked me if I wish to continue with their intermediate course, which is scheduled in a month's time and shortly followed by the advanced course. I declined politely.

Throughout this encounter and a reflection of all my previous other encounters, I realized one very significant characteristics:   Even whites need to eat. Aha! This is the solution to racism!

I realized that it is extremely difficult to get discounts from the whites. But, if I am willing to pay a little more, say 20%, doors begin to open one-by-one.

Say, for land deals, I have consistently received more than 10% due to my negotiation technique. But, when it comes to business dealings, I don't perform as well. Simply because the deals are much smaller and the whites can afford to lose my business. Hence, if I can offer 20% above what they can get from the market, I will have very "friendly" deals from them. So far, I have consistently paid above market so that I can consistently open doors.

No choice, although I have to learn to play like a local, my skin color always give me away. So instead of fighting over the pennies. I overpay to get results. Call me Mister 20%.

Bee-keeping
Finally something positive from the course. Bees are not hard to keep. Even queen-less hives can survive and re-build their queens after winter. The bees are very hardy and can survive winters with a little help from humans. Other than that, the bees are very much on their own in honey-producing within a 5 km radius.

The investment is tiny compared to many other types of investment. The foot print is absolutely tiny. Every farmer love the service of a bee-keeper. Without support of the bees, these farmers will shit bricks over their crops.

It is the fucking Asians who try to mystify bee-keeping. That is why the whites are so wary of me in the course. They simply don't wish to let out their secret recipe that have served them well for centuries.

Bee-keeping is profitable, but it is not a main-stream income generator. In many way, swiftlets behave like bees. They both have a system to follow. The value-adding obtained from swiftlets is very much higher than that of the bees. From my current position, I may not bother to keep any bees but I will be purchasing huge amount of honey for my own needs.

If you cough, drink honey. If you are sick, drink honey. If you hurt yourself, apply honey over the wounds. If you are sleepy over long drives, drink honey with pollen. If you drink honey everyday, you are young everyday. If you are dirty, use beeswax. If you want good complexion, use beeswax. If your male organ needs to be strong, use mead.

b.Contract - The Art of Bargaining

Very frequently I heard of people saying bargaining is beneath me. I should never bargain. For small items, maybe, but for big item, you better bargain. I don't care if you are a prince-in-the-making, you better bargain as if you depended on it to survive.

It is very typical for seller to mark up a little just in case the buyer bargains. In order not to lose the deal, the seller normally gives in a little and closes the deal as if you as a buyer having made some in-routes into some discounts by bargaining.

Supermarts also resort to periodic discounts to lure customers. No choice. In the east, bargaining has become a way of life. But, in the west, this is not as common. Hence, the great opportunity to make some great savings from bargaining, simply because the westerners are not as well-trained as the easterners.

Bargaining is uncomfortable. Hence, it has to be handled with great caution. One good thing that comes out from a good bargain is both seller and buyer must feel happy to get that deal. That way, the seller wouldn't back out last minute. The seller must feel painful enough not to back off and lose the deal. He has spent way too much time closing it. That way, the fall-off is a lot lesser. If you don't bargain and just take his asking price, you might not even get it as the owner might just back off thinking he has made a mistake in the asking price. He will then withdraw and come back with an even higher asking price. Stupidity! I know! I meant the buyer not the seller.

Contract 101 - The Art of Bargaining (for land deals only, I couldn't care less about other contracts) 

Identify the land -   Once identified, do look for a few more alternatives. You cannot be emotionally attached to the said land. I know you love that waterfall, river, mountain view, woods, animals, neighbours and so on. You will either die from heart-attack (normally very high stress during negotiations) or lose the deal if you are shown to be too eager. These contracts behave like gals. The gals love to chase. So let them.

Agent -   Do not appoint your own buyer agent to do the contract for you. Seller agent hates to share his/her commission. So be brave, deal with the native agent alone. It is not usual for the buyer to pay any buyer's commission.

Approach -   Approach the agent as if you are approaching a gal. Careful not to scare her away too soon. Nowadays, even better, the agents are normally gals too. So not much different from approach any new gal on the street. You have to be humble and smiling.

Humility -   Gals hate poor bastards (I am using "gal" in place of the word "agent"). By being humble, you are showing that you are fucking poor. Being fuckening poor, she will not even reply your email enquiries or phone calls. This is good news. You will feel dejected and unwanted. This is normal, get use to that feeling. Contact her 4-5 times humbly. Show sincerity that you want to bid for that deal.

Money talks! -   No matter how nasty the gal is. She needs to eat. The good thing about land deals is that the gal will get nothing if the deal is not closed. She will come around and start to talk to you about the contract.

Home work -   Do you home work and find out all the transactions that happened around that area. Most of these valuations and transacted price information can be purchased online. These prices are normally VERY VERY VERY LOW compared to what the seller wants. Don't panic.

Offer -   By this time, the agent would have spoken to you a little and asking for your identification. Ask her humbly for more information. She will definitely find you irritating and uselessly stupid. Don't feel bad, you are like a cheapo foreign trash in their eyes trying to rob their land. She will not respond anymore. That is when you deliver that offer-to-purchase. It is backed by the information you researched online and be brave - put that value as your offer-price. It is easily 25% - 60% from the selling price. Yes. You heard me right. I had offered 60% off the selling price before. But, because I backed this offer by attaching physical evidence of such value and pricing, the agent couldn't reject my offer as unreasonable. In fact, it made the seller looked real bad. It is as if the seller has been trying to sell his ware with a super-sized mark-up and con the agent in trying her luck. Such deals, the agent will know better not even bother to advertise and waste her limited valuable advertising resources. LOL.

New selling price -   After the initial shock, the agent will come to her senses and realize that the seller is pulling a hard price. She will get back to the seller and try to lower his expectation. She will return to you with a lowered selling price (not much reduced though).

Ding-dong -   In any contract negotiations, you have 3 reductions. Say, the first reduction is $100. You can counter by giving a $50-$100 increase. The second reduction from the seller would be around $50 (about half of the first reduction). You can counter by another $50 up. The 3rd reduction from the seller would be another $25. This is the limit the seller will go. You can never cross this 3rd time. If you try, you will sound unreasonable. It is better to just accept this 3rd reduction and give the seller face so that he can complete the deal. If you push further, you will lose the deal permanently. Even if you are willing to pay the full original asking price later, you will not get the deal. You have bruised the seller's ego. Selling land is a very emotional affair for the seller. If not for his desperation, he wouldn't have sold. So work hard but only for 3 reductions in total. Every time you are returning the new offer price, always quote reliable information for your continual low price. One possible way is to claim that you are a poor bastard. 

Double agent -   This is one of the most brilliant idea yet. The agent collects the commission from the seller. Hence, it is imperative for her to align her interest with that of the seller. She will be extremely rude to you. Be nice, don't fight back. Because you didn't engage any buyer agent, the commission she will get is double-strength. So it is in her interest to try to close the gap and hence, the deal. But, you are all reasonable and humble. You raised the buying price just little by little claiming that you are a poor bastard and the selling price is way too high compared to his neighbours and valuation. Since you have limited resources, you simply can't raise the bar too high, else the deal will be off. Soon enough in order to close the deal, the agent will double herself up as your buying agent and push all buttons to close the deal. She will sweet-talk or half-force the seller to be more "reasonable" with his selling price. She must feel that you had been extremely reasonable in your approach as you have supported each and every offer-price by physical evidence (Of cos choose those evidence that are extremely damning to the seller's unreasonable expectations). She has been marketing the land for more than 6 months already. She simply needs to get food into her own mouth. It is hard for her to get another cute guy like you for the deal. You have then successfully turned her into a turn-coat without her knowing.

Close case -   Don't play with fire. Close the deal at the 3rd reduction from the seller.

Result -   Typically I can achieve up to 10%-20% off the selling price. For land deals, this is big. 

The Middle Rule -   If the initial asking price is $X and your bidding price is $Y, then it is likely that you will close the deal at ($X+$Y)/2 if you press all the right buttons. So get the $Y as low as possible, you will get an even lower closing price. But, do be warned, you must support all offer-prices with physical evidence which is super easy to do. Communicate that to the agent, you will see magic on display.

NEVER -   Always drag out the bargaining and/or buying process. Otherwise, you will face seller's remorse issue, i.e., the seller will back out of the deal half way through. Make the seller feels that he has struck a good bargain. 

Good deal -   Frankly the fact that you start the negotiation process is indication enough that the selling price is already super nice and reasonable, i.e., you can just take the asking price immediately. But, you can't do that due to possible seller's remorse. So be happy for any form of discount, you have already made your day by buying cheapest among all the lands for sale. 

Backing off! -   If you find the deal not to be too sweet, just back off gently. Remember always: It is better to lose opportunities than capital. Don't know who said that but it is an important guiding light when all deals are dim. Then restart by looking at other deals. As long as the capital stays with you, you are her ultimate sexy guy. Remember always: She can't eat without you.

Timing -   Always pace the seller agent, if she answers in 1 day, do the same answer in 1 day. If she answers in a week, do the same answer in a week. Remember you are allowing the gal to chase you. You cannot apply haste.

Worked Example -  As mentioned before, I have a guy trying his luck with native agent. The native agent was so nasty and warned the guy not to bargain too much. The guy just offered 10% down from the asking price. He got the deal after the seller returned with a 5% discount. The property market then went in for a further drop. He could have gotten the same deal but cheaper from the seller's other neighbours.

Caveat Emptor -   For lowly priced land, this bargaining style may not worked so well. 50-50. But, since it is lowly priced, the possible error is also smaller.

Too many buyers -   This is the same as "Backing off" option. Just back off, don't need to rush. There is always another land that has rivers, hills, waterfalls and birds. For those who has been to bank auctions, you would know that by having too many buyers, the auction bids become irrational. So be cunning and stay the fuck out.

To sum:   It is important to close the case nicely by taking the price offered by the seller. That way the seller will not feel so bad. The deal will go through the legal process without him coming back to stop the case. To bargain is easy, but to bargain well without any backlash from the seller requires training. So practise hard.

b.The methodology of Squeeze

Pre-requisite

Cash is King!

At the beginning of business, all suppliers will not trust you. You are required to deal in cash in advance for your goods and services. You have no choice but to comply. After a while, once you are more stable, these same suppliers will try to offer you credit terms. DON'T TAKE IT. It takes great wisdom to not take that evil bait.

Once you are offered terms, slowly but surely, you will be addicted to that credits (Really not very different from credit card companies). Once you show signs of not paying, these very same suppliers will stop their supplies and services. You would be left high and dry, and unless you pay up, you will not get your next supplies for continuance of business. They even will threaten legal action if no payment is received by a certain date.

So stay clear of taking any credits.

But, I love that machine or that ERP software that will help me to minimize effort and maximize profit. Banks are willing to lend me the money to own it straight away. No such thing! You can still make money from existing machines which you have paid cash for. Your customer services are still tip-top with personal touch and no bull-shit like ERP software. These softwares are meant only as a show-off to others. It will help no one. I have friends who have installed ERP systems and took them more than 2 years to configure. Later, EVERY ONE threw their softwares away and started yaking on their phones to try to win back their customers. These ERP softwares almost killed their sales systems.

If you can't pay cash for it, it simply means you are not yet ready for that man-toy nor are you ready to expand.

Stay cash terms.

The Squeeze

Once the supplier starts to offer credit terms, it is time to apply that squeeze. It means that your cash payments have proven your credit-worthiness. You are an important account to them. They need your business volume and your monthly business volume is a percentage to their turn-over.

Get your secretary to look for another supplier for the same goods and services. Quote the new one the business volume you are doing with this current supplier and the cash term. Since it is a percentage of sale for the current supplier, it will also be more or less a percentage of sale for the next supplier. Ask the new supplier to better that number (about 5%-10% lower). If the new supplier agrees, cut over 80% of the sale volume. You should be more than welcomed for the new supplier as your cash terms are too valuable for the new supplier. Most clients of theirs are now on credit and not paying well when times are bad (most times are bad for businesses).

The old supplier will ask after a few months why is your business volume so low? Your answer should be: The price quoted by them are no longer competitive and you are in a bad shape. You can't hack the high supply cost. Further you have a partner and he has found a friend to help in this. He has helped by lowering our total supply costs.

The old supplier will ask for a return of business as he is now addicted to your cash terms. It is like an ATM to their business, as they need immediate cash to pay for their installments, employees and rentals. You ask for a further 10%-15% discount from his rates. he will most likely comply as you have proven to be able to walk away.

Transfer back the 80% of sale to him and give the remaining 20% to the new supplier.

Learn to hunger them. Alternate your purchases with them.

Wait for a while and repeat the process. If necessary, find a third supplier.

When do you stop? 

You should stop at 10%-20% above raw material costs. How do you know? Well, that's what big businesses like Macdonalds, Apple and Samsung are paying their OEM contractors.

The raw material prices can be gotten from simple phone calls and internet researches or simply ask friends.

For every squeeze, try to return some of these savings to the consumers. They are your ultimate food providers. They will assist you to protect your market share by accepting that you are indeed the best value for money. 

Conclusion

Business games are not about being fair. There is no fairness. The big boys will always eat the small ones for food and to stay alive. This is the exacting law of the jungle. Please show no mercy. The others will not show you any either, but to constantly plot your demise.

Should you therefore show mercy to your suppliers? NO. They too are accepting gifts from your enemies to see your demise.

As one wise man said, "There are no permanent enemies, only permanent interest."

CASH is your only weapon in winning these cut-throat business wars.

If you deal in cash only, you will be the only one that can effectively play the field.