Chapter 97: Withdrawing from the Partnership

Seventy computers, and not the basic models either, but the upgraded versions with better hardware, each priced at around two thousand one hundred dollars.

Boss Charlie planned to make fifty dollars on each one. The profit was not especially high, but the appeal lay in how easy it was: thirty-five hundred dollars could be earned in one clean transaction, and with a few extra accessories thrown in, the margin might be even better.

Lately, major manufacturers such as IBM had been luring inexperienced customers with low-priced machines.

The entry price of the 5160 PC/XT had been driven down to a little over six hundred dollars. On the surface, it looked cheaper than Apple’s offerings, but in truth its configuration was painfully bare. IBM was using inexpensive computers to expand market share, and the profit on that segment was not much at all; the real money came from inflating the price of accessories.

Leon asked, “If I, say if I, bought the parts myself and had someone else install them, would that lower the cost? Roughly how much could it save?”

“Sorry, I’m not too clear on that. Someone probably knows, though. Like the guy who repairs computers at the corner of this street—he’s always helping people boost performance.”

Boss Charlie was reluctant to lose the deal and went on, “But if you do it that way, there’s no guarantee of quality. If a machine you bought from me has a problem, I can help repair it anytime. As long as the customer didn’t break it himself, repairs are basically free. But if you tamper with the computer on your own, the company won’t cover the repair costs.”

“Yes, after-sales service is important.”

Leon faintly sensed an opportunity here. The principal, Batistuta, had already pressed him twice in these past two days, so he needed to get the products to the school quickly. He continued, “You only expect to make fifty dollars per computer, and I’d be giving you all the profit. Then wouldn’t I be working for nothing? How about twenty-five dollars each?”

“That profit is really too low. I’d have to stay busy for a long time, and I’d still have to cover shipping and labor. It simply isn’t worth it. If it’s only twenty-five dollars, I’d rather not do this deal.”

Boss Charlie was clearly not willing to agree. On a product worth more than two thousand dollars, a mere twenty-five dollars in profit was laughably small. Even if seventy units were bought at once, after costs he still would not make much. The effort and the return did not add up.

“Sir, what if we handle the shipping? In that case, we can only pay you twenty dollars. We transport this batch of computers, and you only need to sit in your shop and make the order by phone. That would still earn you fourteen hundred dollars.”

During the visit he had made the previous week, Leon had already gotten a rough handle on the cost breakdown. He had even called the customer service departments of several companies under the pretense of being a distributor and asked for the lowest wholesale price, so he was not afraid of being fooled by Boss Charlie.

Fourteen hundred dollars was nothing to a large seller, but it was tempting enough for Boss Charlie. Just as he was hesitating, Leon went on, “If this deal goes through, we can keep working together in the future. We could buy hundreds, even thousands of computers from you. By then, when you source through a distributor, your cost will be much lower. You can’t only think about the profit right in front of you, can you?”

“...I want at least fifteen hundred dollars in profit. If that works, I’ll place the order now. Fifty thousand dollars as a deposit. Okay?”

Boss Charlie said.

Leon smiled and extended his hand. “Deal. But I can only give you ten thousand dollars as a deposit, a full ten thousand. You don’t have to worry about me backing out—if I do, that ten thousand is yours.”

It did not take Charlie long to answer. “All right. It’s settled.”

The ten thousand dollars was advanced by Leon, and Boss Charlie agreed to have the products ready within three days.

Leon’s first deal in the computer sales business could be called fairly smooth. More and more computer dealers had been appearing in Silicon Valley lately. Even the smallest profit was still profit, and he was not worried about finding someone willing to work with him.

If nothing went wrong, Leon should be able to make around three thousand dollars from this transaction. He had told Charlie fifty dollars, but in fact he intended to keep the margin at about seventy dollars each, which was already the lowest price in the market. If Monroe Park Private High School bought the machines on its own, the price would never be this low.

The computer industry had a vast future, and the profits were much greater than Leon had originally imagined.

That evening, after Boss Charlie delivered three computers to the front of the villa, Leon rode out to buy four boxes of pizza to celebrate, and he bought some for James, George, and Lee Chieh-kai as well.

Just as the few of them were eating pizza and chatting, Daniel Brown suddenly came by. His expression was very dark. After greeting his cousin, he said to Leon, “Leon, can I talk to you alone?”

Since he had disappeared from noon until now, Leon naturally would not refuse. Their relationship used to be quite good when they met, but today something was different. A crack had formed between them, and their already fragile friendship could no longer withstand the strain.

Out in the garden by the villa entrance, Leon said with a smile, “I’ve already gone to see Principal Batistuta. He said he’d help us sort it out, so you don’t need to worry about it anymore, man.”

Daniel gave a strained smile, as if he did not quite believe the principal’s involvement would put an end to the rumors at school.

Then he changed the subject. “I’m going to transfer schools. My mother is being reassigned to work in New York, and I’ll be going there with her.”

“So... sorry, but the business may have to stop here for a while. The students at our school never liked me anyway. I’ve caused you trouble this time, and it’s all my fault.”

“Hey, this isn’t your fault...”

Leon was momentarily at a loss for words.

He did not know how to comfort him, and he could not help thinking that maybe transferring schools was a good idea—a chance to change places and start a new life.

Neither of them said anything.

After a few quiet seconds, Leon asked, “Do you know those seventy computers were donated to our school by your father? I’ve already contacted the supplier. We make sixty to seventy dollars on each one, and that’s the lowest margin in the market. If you leave, what happens to the company? What about your five percent stake?”

“I only found out today. You’re making too little anyway. Besides, my dad already donated them to the school, so that’s school money.”

Thinking of the business, Daniel’s expression finally relaxed a little. Then he said, “I can’t help you much. If you’re starting a company, I won’t be able to rush back here either. Let’s just leave it at that. The company hasn’t even been founded yet, has it?”

Leon was taking this very seriously, treating computer sales as a real business, while Daniel regarded it more like a pastime, something not worth taking too seriously. He did not even want his shares anymore.

“Leon, my mother is still waiting for me in the car. I have to go for a therapy session in a bit. So... see you later?”

When he said the words therapy session, Daniel deliberately stressed them, as though he were very resistant to seeing a counselor.

Leon tossed out, “Wait here a moment,” then ran upstairs to his own room. Soon he returned.

He pressed the money into Daniel’s hand. “This is your share of the profit, plus the return for giving up your stake. A thousand dollars in total. Your father paid for the computers, and that already made me feel awkward. Take the money. I insist...”