Hu Lang's Law, also known as Hu's Law, was put forward by financial expert Hu. That is, without considering the time value and bad debts, the guaranteed sales volume of goods is equal to the purchase volume of this batch of goods multiplied by the cost rate (note: cost rate = 1- gross profit rate). Assuming that the gross profit margin of a batch of goods is 20% and the cost rate is 80%, then:

Purchase quantity * purchase unit price = purchase quantity *80%* purchase unit price/(1-20%);

Where: purchase unit price /( 1-20%)= sales unit price.

Purchase quantity *80%= guaranteed sales volume = purchase quantity *( 1-20%)= purchase quantity * cost rate.

Gross profit margin = (sales unit price-unit cost)/sales unit price =20%

Hu's law tells us that if we want to be competitive, we must make our products marketable. If you can increase the marketability by 1%, then you can open the price advantage of 1% with others. With this 1% advantage, you have the foundation to win the competition.