Chapter 228: Hype
Ves remained in a jubilant mood throughout the night. Despite the shaky start, his customers finally bit the bullet and submitted an order for his mechs. While they merely represented a reservation of sorts that could be cancelled at any time, Ves didn’t worry too much as long as he delivered the mechs quickly.
The most astonishing event that happened that day was when the Marcus Aurelius sold for 110 million credits at an auction. In the Bright Republic, any mech that sold for over 100 million credits had to possess something special. Usually, only expert pilots and other elites piloted such mechs.
What made this case special was that the Marcus Aurelius reached this standard by virtue of its rarity and its so-called ‘intangible value’. That was a polite way of saying that many people thought the winner of the auction grossly overspent on a mech that should ordinarily be worth 60 million credits at most.
One local news portal published a critical article about the auction.
“Through theatrics and guile, Mr. Larkinson succeeded in pulling the wool over the eyes of his audience. With the Vintage Festival’s hall manager complicit in his scams, this money-grubbing mech designer manipulated his buyers into spending twice the amount of money that they ought to. We are dearly concerned with the Vintage Festival’s integrity for hosting Mr. Larkinson and granting him additional favors that honest mech designers could only dream about.”
On the other hand, many other news portal put a positive spin on the events.
“Have you heard of the Living Mech Corporation? If you’re shaking your head, you’re not alone! Founded by the scion of the Larkinsons, a military dynasty, the company made a splash in Ansel yesterday by selling and auctioning their limited edition mechs at sky high prices. Our resident mech analyst predicts that Mr. Larkinson has achieved a profit margin of a hundred percent, which sits at the top range for mech designers at his level!”
“It is a mystery why the Marcus Aurelius reached a value of 110 million credits. Mr Brandstein, CEO and chairman of the Brandstein Asset Management, is known as a shrewd investor and has never made any catastrophic bets. What did Mr. Brandstein see in the mysterious Marcus Aurelius that made him want this exclusive model at all costs? No matter his intentions, his august patronage has lent some sorely needed credibility to Mr. Larkinson’s mech startup.”
Ves shook his head as he browsed the articles the next morning. The reporters spun grand tales out of very little facts. Their articles mainly contained speculation and opinions that served to accommodate the existing biases of their target audience.
“Any publicity is good publicity.” Antje told him as she ate her breakfast at the hotel they stayed at. “While these news portals don’t reach very far, they are strongly rooted in Bentheim. They key to building up a brand in Bentheim is to lay down a distinctive track record. Stand out. Make a splash. Whatever you do, don’t settle for mediocrity.”
In other words, even if Ves screwed up, as long as he did so in a spectacular manner, he’d still be able to increase his name recognition. The amount of competitors in the Bentheim market reached such a ridiculous level that many average mech designers who designed normal, practical mechs never achieved success because nobody had heard of them and their boring designs.
It was easy to get lost in the crowd.
Once they arrived at his booth, they faced a difficult situation. Numerous buyers congregated around his sales representatives asking to purchase the Mark II and the Caesar Augustus. Normally, that would make Ves happy, but this time the number of buyers exceeded his daily quota.
“It’s very important to handle this situation with care.” Antje warned as she read through the waiting list of customers. “There are a lot of influential people on this list. How do you wish to proceed?”
Even though the situation looked great, the wrong decision could tip over the favorable balance that they managed to create.
Ves considered his options. “We could institute a first come first serve policy. Those who spent the effort on getting here the earliest have priority over those who come later. If we want to be really fair, we could also do a random draw of all the people who expressed interest in buying my products. We could even spread them out over the day so that no one will feel we’ve left them out.”
“Those are fair options, but they’re not the most optimal ones.” His sales manager responded. “Right now, you’re in the enviable position of being able to set your prices. Even at your current price levels, there is still room for growth.”
That sounded logical, and in an ordinary situation he’d go for it. In economics, demand usually matched supply.
If demand exceeded supply, then the most appropriate response was to raise his prices until the cheapskates stopped demanding his products. Meanwhile, those with thicker wallets eagerly spent more for essentially the same products.
Still, Ves thought he had a good thing going on now. Pushing his buyers to the limit might cause a backlash that could see the momentum that had grown around his products fade.
“Let’s keep the prices as they are.” Ves decided. “My profit margins are hovering around a hundred percent already. That’s extremely good for a newcomer in the mech industry. It’s more important to consolidate our gains than to overreach our current market standing.”
Antje looked disappointed, but she accepted his decision. As a marketer, she thought that Ves had lost an easy opportunity to earn some extra money. If they played their cards right, they could have earned twenty to thirty percent more.
To accommodate their potential customers, they decided to go for a random draw. Each hour, they held a lottery for the opportunity to purchase a single Mark II or Caesar Augustus. The announcement momentarily befuddled the crowd of buyers, but they stuck around anyway.
If they failed to win the first draw, they still had a chance in the second one, and so on. The arrangement slightly favored those who persisted the longest, though eventually luck formed the decisive factor.
“Another advantage of resorting to a random draw is that the winners will cherish their lucky opportunities.” Antje noted as she saw the first lucky bastard jump into the air with joy. “That means the chance that they’ll turn back on the transaction and demand a refund is a lot lower than if you raised your prices.”
Throughout the second day, his booth became more of a exhibition than a store. Even more visitors arrived at Ansel today, causing the halls to be packed with people. Through word of mouth, his show models became one of the must-see attractions of the Vintage Festival.
The space in front of his booth became jam-packed with visitors. The hall manager sent additional security to his area to maintain order.
Ves found it amusing that people started to speculate on what made his designs so valuable. They entered a peculiar state where they sought for possible answers while staring at his show models. This made them more sensitive to the X-Factor the models radiated, causing them to come up with all sorts of wild reasons.
In any case, everyone pretty much agreed that his models possessed a certain gravitas that drew the eye. This was most obvious with the Caesar Augustus Eternal Edition, but the Marcus Aurelius formed an especially puzzling mech.
People ascribed more value to the mystical mech because someone else already paid a fortune for it. Even if they couldn’t sense its X-Factor, its mere perceived value had transformed it into a hot commodity that brought a lot of value to whoever got to own a copy.
That perception strengthened when the professional mech aficionados gave out favorable reviews of the Marcus Aurelius. Experiencing its X-Factor at close proximity and trying out its virtual version allowed them go get a taste of its special qualities.
They all used their own terms to describe their sensations.
“Larger than life.”
“A mech with stature.”
“A living legacy.”
These authoritative statements fueled the anticipation surrounding the Marcus Aurelius. By the time they held the second auction, a famed collector finally managed to secure his bid at 120 million credits!
More and more people began to believe the Marcus Aurelius possessed a unique strength, especially if they tried it out in a simulation. The crowd started to demand he released the virtual model to the general public, but Ves refused to give in to the demand.
He wanted to maintain the aura of mystique around his most valuable model and maintain its exclusivity. The less people became exposed to the mech, the more they wanted to possess it. The limited amount of time allotted to simulations barely satisfied their cravings. In fact, it spurred them to an even greater frenzy.
On the third day, besides selling out his regular models, the third Marcus Aurelius had been won by an anonymous bidder for a modest sum of 115 million credits.
The lower sum compared to the day before represented that his model had reached its apex in terms of hype and perceived value. Even though demand for the Marcus Aurelius remained high, it reached a hard limit in terms of how far Ves could stretch out its value.
His suspicions born out when they held the final auction at the last day of the festival. With most of the guests attending the closing ceremony at the main hall, the buzz around his show models had clearly reached a low point. The final bid given by another CEO only reached 113 million credits.
While this still represented an unimaginable sum of money, Ves had secretly hoped for more. He shook his head at his greed. “I’ve already won big at this event. There’s no need to complain about missing out.”
The daily sales chart proved his success. His booth had topped the sales chart in Hall 2. Surprisingly, a few mech designers over at Hall 1 did even better. They mostly consisted of AUMD alumni who catered to their home market. While their profit margins were drastically lower, they managed to sell hundreds of mechs, all of which added up to a frightening sum.
Antje tried to console Ves. “They’re already players in the Bentheim market, and their mechs are much more reasonably priced. These are natural results from your diverging product strategies. You’ve been targeting the high-end consumers while they’ve been focusing on the middle segment of the market.”
“I see. You’re right. It’s stupid to fuss about this issue. We haven’t been competing directly against each other.”
He always envisioned the LMC to take the high-end route. Instead of investing in production capacity, Ves would rather develop his skills and his products and develop a reputation for excellence.
After a wonderful period of doing business, they began to pack up their props and dismantle their booth. Ves sent the show models back to Marcella’s storage yard to be inspected and brushed up. Even if they served their duty as show models, they were destined to fall into the hands of his first clients.
“Goodbye, my sweet mechs. I hope you enjoy your new homes.”
At the end of the ride, Ves wasted a lot of time on paperwork. Technically, he hadn’t sold any mech yet. He only received a number of orders that he had to fulfill before the customer transferred the promised sum.
Despite these technicalities, Ves still made out with a fortune. First, he sold forty Marc Antony Mark II Eternal Editions. With 40 million credits a pop, the total sum reached 1.6 billion credits.
Second, he twelve copies of the Caesar Augustus Eternal Edition for 80 million credits for a total of 960 million credits.
Finally, he auctioned out four exclusive copies of the Marcus Aurelius for a total of 458 million credits! Just four mechs earned him almost a billion credits alone!
Still, Ves had to throw in a lot of caveats that diminished his final earnings. First, Ves promised Marcella a ten percent cut out of his gross profits. That was ten percent less than their contract which Ves insisted on due to all the work he had put into this event. Even then, Ves would dearly miss that money.
Second, increased resource costs raised the production costs to a higher level than ever. Right now, the fabrication cost for a Mark II Eternal Edition evened out at 24 million credits, mostly due to the added premium materials included in its design.
The Caesar Augustus and Marcus Aurelius both cost around the same to produce at around 50 million credits, though the actual price fluctuated significantly from day to day. That meant that Ves might be able to pay only 49 million credits tomorrow, but 51 million credits the day after that.
Still, the general trend made it clear that Ves had to spend big in order to earn big.