Trading – Faith Over Knowledge

Previously in this section, the blog mentioned on the Family Database which is a great tool for our family unity. It is now fully utilized for businesses. The database is fundamental in our capital accumulation and business growth. We don’t borrow money from the banks. As far as bankers are concerned, we consider them as the devils among the highest level.

In so many ways, wars and trading have a lot in common. Acehnese had fought against Raja-Raja of Beneres (India), the pirates particularly of India and China, Srivijaya, Singhasari, Langkasuka, Ayuddiya, Majapahit, the Portuguese, the Dutch, the Japanese and Indonesia. Acehnese had built kingdoms like Perlak, Rokan, Pasai, Kedah, Inderapuri and two empires Malacca and Aceh. Historically, these kingdoms and empires were built and had lot to do with wars and trading.

So what makes us Acehnese have the willingness to fight (in wars) and to compete (in trading) which led to kingdoms and empires built?

Wars and trading have a lot in common BUT the MOST IMPORTANT COMMON us Acehnese have between the two is OUR HEARTS.

Fundamentally, Acehnese are very concern about their hearts. Between the hearts and the minds, Acehnese give more priority to the hearts because the hearts are a lot more alive. The hearts are where FAITH is. When the faith demands us to fight, the hearts don’t calculate how big or how strong our enemies are so we fight nevertheless. When the faith demands us to compete, the hearts don’t calculate how big or how strong our competitors are so we compete nevertheless.

Many years ago, people advised us not to open shops in places like Penang Road, Macallister Road, Campbell Street, Burmah Road, Chow Kit Road etc because these are Chinese dominated areas. They said to open shops in these areas will be business suicides. Unfortunately, our hearts never bother because the hearts have faith. We run our shops in these places nevertheless. Guess what? The Chinese in those areas are indeed very cooperative and helpful and we are doing okay.

With Faith, our hearts are brave. That’s why historically Acehnese have never done research finding rational reasons not to go to wars and not to trade. Our hearts never tell us something like … oh we might get killed or we might lose money so we better stay behind or find stable jobs with fixed salaries so we can live longer or accomplish more things with less risk.

Months ago, I sent some selected shop keepers to be upgraded as supervisors for training. They were trained by this government agency. At the end of the training session, I was shocked that the trainers told the keepers that running sundry shops are not prospective.

I was like … WHAT??? Back in January 2005 we started with 15 shops and today we have more than 800 and these trainers told my people running sundry shops are not prospective? So I contacted my friend who is actually their boss and complaint and funnily I found out that those trainers are sure paper qualified … they can talk marketing, branding, financing etc but none of them ever run own businesses their entire lives. What a bunch of jokers.
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Sangkar Duka

I’ll be off blogging for a week or two starting Wednesday night. I’m taking my family for vacation and later traveling for business trips.

I have posted this song before and lately I had no time to write a new song. So I converted this song into music video featuring Inderawangsa.

‘Sangkar Duka’ means Cage of Sadness.

Song and Music by Azer Mantessa

Trading – One-Month Credit

All calculations are only for demo purposes. They do not reflect true business transactions.

Previously, this section mentioned on Centralized Purchasing which paved the way to a very good trading opportunity – One-Month Credit.

One-Month Credit is a trading facility given by suppliers. Generally, this is a very rare opportunity given to sundry shop owners but acehnese traders as a whole are seen to be prompt in credit payments. When we promise to pay in one month time, it means, we will pay in one month time.

There are three major reasons why we are given this facility:
a) Since we have moved upstream and becoming wholesalers and to certain products as sole-distributors, we give ourselves the facility.
b) We are so known as good sellers that suppliers really don’t mind given us the facility.
c) That we control certain brands, suppliers of other brands have no choice but to offer us the facility so that their products are accepted in our shops.

At least, 30% of our inventories are built by this facility which means we have the advantage of having 30% extra cash allocated for purchasing for the whole month. Historically, once the extra cash of 5 to 6 shop owners combined, it is enough to start a new shop. On the following months, the new shops will contribute to the growth.

Inderawangsa

This blog has a new entry which is on Music Theory.

Elitism Exposed: Part 2 – Iblis a.k.a. Lucifer, The Existence of Evil
Please do read the Disclosure Statement before proceed.

Song and Music by Azer Mantessa

Trading – Centralized Purchasing

All calculations are for demonstration only. They are not based on real business transactions.

Previously on our family trading activities, this blog has mentioned on capital acquisition which are Pooled Capital and Family Borrowings. Starting Year 2005, the business went parabolic in numbers of shops due to many other business strategies.

Centralized Purchasing

Basically, us acehnese traders are individualistic type in a sense that we don’t like to work under other people or we prefer to be our own bosses.

Acehnese farmers however have been applying collectivism where they work collectively for good yield which benefits them as a whole. Acehnese traders however do not apply collectivism but we do apply what is known as Corporative Individualism. This is a strategy where shop owners work collectively for the benefit of every shop owner.

To demonstrate what Centralized Purchasing means is as follows:

1) Say an average shop sells 10 tanks of cooking gas a day.

2) In a month, the shop sells 300 tanks of cooking gas which means the owner have to buy 300 tanks for the sales.

3)Say for every 100 tanks purchased, a shop owner received a tank for free. This means, for 300 tanks purchased, a shop owner received 3 tanks for free.

4) Say there are 100 shop owners. Therefore 30,000 tanks are purchased monthly. Also, 300 tanks are received for free.

5) That free 300 tanks then means the family as a whole has grown 1% in inventory which are sold to a new shop owner with handsome profits.

Note: Shop owners lose the free tanks but gain profits from the sales to the new shop owner.

Centralized Purchasing however does not directly involve in the family business growth … however …

There are two major advantages in Centralized Purchasing:
1) Having the power for business merger or acquisition being the distributor of a product.

2) Having the business benefit called One-Month Credit.

Having the ability to purchase 30,000 tanks monthly is huge. Once we are a big buyer, we can force the distributor to accept us as business partner or face the consequence of losing us as buyers. This allows us to move upstream from running sundry shops and become distributors/wholesalers. We do this all the time to many products.

This blog will mention The One-Month Credit which is major to our business growth. Some other time … God’s willing.

Faith
…….Knowledge
…………………Trades
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Ringtones by Azer Mantessa

Okay, five more ringtones for everyone to choose from:

Ringtone: Azer Reggae

Ringtone: Azer Blues 2

Ringtone: Azer Rock

Ringtone: Azer Blues

Ringtone: Azer Pop 2

Trading – Capital Investments and Family Borrowings

Previously, this blog mentioned Pooled Capital which is major in developing our 15 sundry shops on January 2005 to more than 800 shops today. Besides Pooled Capital, my family applies two other methodologies in order to acquire capital: (1) Capital Investments and (2) Family Borrowings. One thing for sure, we will never allow anyone to go to the banks for business loans. This is traditionally a no-no and we intend to keep it that way.

Capital Investments is a method where an individual with enough money is encouraged to run business. I am included in this category. I invest but having other people to manage the shops. In some cases, a shop is set up through partnerships. In some cases too, individuals who have the money are forced to have own shops. Usually, these are highly educated people with money who hesitate to run own businesses. Ironically, they are in the corporate sectors holding high positions. They can talk marketing, human capital development or corporate management and all but in reality, they have no guts running own businesses. So we have no choice but to force them to do what they are preaching. Of course they hire people to manage their shops while they keep being the corporate guys.

Family Borrowings is a method applied by individuals with not much money but ambitious enough to run own businesses. Usually they are young, inexperience and not from the ‘rich enough families’. What we do is to gather enough family members who are willing to give the loans collectively. The trick is when you give loans for someone to run own shop, you will be respected for life and keep the clan intact as one.

I think for the first year, all shops are established through these methodologies - pooled capital, capital investments and family borrowings. However, the growth turned parabolic in year 2006 through two other trading methodologies hopefully to be mentioned in future entries.

Faith
.........Knowledge
............................Trades

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Elitism Exposed: Part 1 – Ancient Civilizations ... Ancient Egypt

Song and Music by Azer Mantessa

Please read The Disclosure Statement before you proceed.

Trading - Pooled Capital

Last November, Dewan Perdagangan dan Perindustrian Aceh (The Acehnese Commercial and Industrial Chamber) was incorporated in Kuala Lumpur. Memberships are opened to acehnese traders all over the world. Friends asked me questions on ‘Acehnese Trading Traits’ …

My family has been in business since the establishment of Kingdom of Kedah (now Kedah). When Sultan Iskandar Muda established the acehnese regime during the height of Aceh Empire, we were allowed to control ‘Pekan Rabu’ or trading places which contributed to our economic supreme for hundreds of years. The fell of Aceh Empire however was a major turning point to our deterioration in trading.

When Tsunami 2004 hit Aceh, it ended the war. Suddenly, acehnese all over the world found ourselves saving money at tremendous rates we have never experienced before. We took advantage to start focusing on one thing we were so good at – running businesses.

Pooled Capital

On January 2005, my family (2,385 family members locally) started with 15 sundry shops. Today, we have more than 800 shops located from Muar, Johor down south to Lumut, Perak up north. Combining all acehnese trading families, today, there are more than 7,000 acehnese sundry shops all over the peninsular including two new untraditional areas – Kelantan and Terengganu.

Pooled Capital (also known as Kuutu) is a trading strategy. It has a 2,000 years history. Some say it originated from India but some say from China. It is quite major to the development of those 15 shops to more than 800 shops. Never mind the historical part, this is what it is all about …

Step 1 – Have a collective members … say 100 members.
Step 2 - Every member contributes a monthly amount … say RM 100 for the next 100 months.
Step 3 – Total monthly amount = Pooled Capital = RM 10,000.
Step 4 – Every month, the amount is given to a member as a starting capital to start running a business.
Step 5 – In 100 months, there shall be 100 businesses run by 100 members.

There are many advantages in applying Pooled Capital: Usury free, Family unity, A major motivating factor in running businesses etc etc etc.

Faith
…… Knowledge
…………..…… Trades

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Celestial of Love

Song and Music by Azer Mantessa

Dedicated to Celestine.