Well It Looks Like Raindrops, So Many Raindrops
Topic: "Rainy Day in Georgia(2)"
The composition of the soil is such that once the presence of moisture is minimized, then the texture is that of concrete. Add water, and the chemical reaction that results is best described as clay. In any event, no matter what stage it assumes, it is almost impossible to farm or garden when it is either too wet or too dry. One has to wait for the right time and circumstance. The fact that anything grows is a tribute to "Yankee ingenuity."
Frodo has been thinking about that ingenuity a great deal lately. As a businessman, Frodo believes in capitalism and the opportunity it affords to the adventurous risk-taker with a better idea. He differs from most of his associates in that he readily accepts that with success comes societal obligation. Warren Buffet, Bill Gates, and Ted Turner are three men whom Frodo regards as models for that in which he believes. Many of those with whom Frodo does business are more concerned with minimizing their obligations, moral or economic.
Frodo once met a young man who had been in Lithuania when the Soviet Union collapsed. The young man told him the following story which Frodo repeats here as a reminder that success does not necessarily correspond to advantage over the less fortunate. Sometimes, it just is.
The young man had completed an assignment for his employer in Germany, and was on his way home to the United States. He passed through Lithuania on the way home, and there he happened to meet several businessmen who were discussing the changes in their country that were sure to follow. At an outdoor cafe he asked the men what they felt was the one thing that the consumers in this former Soviet-bloc nation would most like to obtain from the West.
"Oh, that's easy," said one of the businessmen, "beer, in cans." The others began to nod and quickly voiced their assent.
The young American was aghast. "You've got to be kidding me," he said. "You and your European neighbors brew the greatest beers in the world, and even the best American product is almost tasteless in comparison."
"Oh, that we know, but you have to consider that the Lithuanian people have been watching American TV for years, and with that, we get your commercials," he responded. "That means we have been watching blonde-haired girls in bikinis riding horses on the beach, and drinking beer out of cans. Beer is not in cans in Europe, it is poured into a glass, or served in a bottle."
As they talked, the young American asked a simple question. "How much American beer could you distribute, and how much could you pay for it?" The men looked at one another, and a discussion of possibility began. Remember dear reader, this was a time when the Internet did not yet exist, and something called "TeleFax" was as high-tech as international communication stood.
"We feel that we could sell 5 Million cans of beer, and that we can afford to pay something in the neighborhood of $1,250,000 in US dollars." The young American began to do some mental calculations, and he remembered that his college roomie used to drink some cheap beer that he got for about $1.50 per six-pack. If he could get a wholesale price for the beer, then he just might be able to make enough money to make the effort profitable.
He placed telephone calls to several breweries in the US, finally finding a potential with the Heilemann Brewing Company. They, at the time, had a product called "Red, White, and Blue" which did retail in the US for $1.50 per six-pack. They told the young American they could meet an order for 5 Million cans of beer, (translating to 833,335 six-packs, or 208,335 cases roughly) at a wholesale rate of $.20 per can. Mental calculations quickly translated that 5 cents per can into a potential gross profit of $250,000.
From this discussion he learned that the price included delivery FOB (Free on Board) to any American port of departure.
Three more long distance telephone calls provided him with a shipping contact in New York who could deliver the beer to Hamburg, Germany, for 3 cents per can. Gross profit now reduced to $100,000.
He was able to arrange train transportation from Hamburg to Lithuania for an additional 1 cent per can. Then came the bad news. He learned that Germany had a protective tariff against the importation of foreign beer into that country. It amounted to 1 cent per can.
Defeat snatched from the jaws of victory is something that does not deter a good businessman. The young American, with no more than two additional calls to the US, learned tht if he had the beer delivered to the Port of Baltimore that there was a shipper there who could deliver the beer directly to Lithuania. The cost would be 4 cents per can.
When all was said and done, the young American had spent less than 12 hours, and incurred total expenses of less than $100 in long-distance telephone calls, to achieve a profit of 1 cent per can, or $50,000. The story ends with delivery of 5 Million cans of "Red, White, and Blue" to Lithuania. The supply was sold out in no time, and all of the investors made money.
Since the beer tasted like crap, it should be noted that no further orders were received at the Heilemann Brewing Company. The good people of Lithuania learned that not everything you see on television is as it appears.
When last Frodo heard of that young man, he had returned to Germany, and was looking for opportunity. Frodo believes he must be working on something to prevent soil from becoming either too wet or too dry. At least he wouldn't be at all surprised to find it so.
Posted by loveysdaddyga
at 9:02 PM EDT