Recovery basically means the proper flow of business and services. Proper flow can generate revenue and profits. But if the forecast says that it will take time to recover the economic situation than How can we recover the business….????
In a period of Recession or Economic crises, the first department who gets affected is Sales & Marketing Department. Sales graph goes down and Marketing activities fails to attract customers. Because in recession or economic crises people don’t have enough money or they want to spend their money only on essential commodities or services. Due to the poor performance of sales & marketing, the next department who gets affected is Stores. Storage of finish goods gets overloaded. And after this, it effects on Production department. Management usually decides to stop production, downsize the sales team, downsize the administration staff and production staff.
RECESSION COMES WITHOUT ANY PRIOR INTIMETION. AND IT LONGS FOR UNCERTAIN TIME.
What is happening in current scenario of Recession due to Demonetization??
- No Buyers or Few buyers for goods.
- Money is there in the pockets of customers but they tend to buy only essentials.
- Customers are waiting for a better thing to happen, a better price to be announce.
- Purchases tend to get postponed.
- Break even points are set very high (for manufacturers)
- Manufacturers likely to be giving price offs, discounts, special offers.
- People holds enough bank balance but they don’t want to spend money by other modes of payment like e-payment, ecommerce, cheques, using e-wallets, etc.
- Inventory build-up. Fire back reactions.
- Pressure build-up and cash flow required.
- Intermediate Agents, Traders, C&F Agents, Transporters etc. gets disturbed.
Stainless Steel Utensils is the product which is being purchased by end users on various occasions like…. While setting-up a new house, Shifting to the different locations for longer time, Marriage of Son or Daughter or any family member, for Gifts, for donations etc. But the main occasion of buying Stainless Steel utensils is during Marriage Season. Currently the marriage season is on. But due to the demonetization people are unable to make purchase of utensils because of lack of cash in hand. The Sale of the SS Utensils has been decreased by 60% to 70%. Retailers are unable to achieve required sales turnover. Traders are unable to confirm repeat orders from Retailers. Manufacturers are unable to supply stock to Traders. So, Manufacturers have stopped production.
In India, Late November, December & January is a period of Marriages. And people make huge buying of many things including SS utensils. But due to the lack of cash in hand, the current sales of SS utensils in the retail market is approximately 30%. It means the retailer who was selling 100 units per day previously, is now selling only 30 units per day. And even from the 30 units, majority customers may be asking for low price product.
We would like to ask few questions to the Manufacturers of SS utensils.
- Your trader buys stock only from you or also buying from other manufacturers for same products….??
- If your trader is buying from you but also buying from other manufacturers than why??
- You are not enough capable to fulfil your traders whole demand for a single product…??
- If you are capable but still your trader is buying from others manufacturers than why…???
- In a current scenario, a retailer is selling only 30% stock as compared to the expectation. Out of that 30% sale, how many customers are choosing your product to buy….??
- Even in this current scenario of only 30% sales, if maximum number of customer choose your product for purchase than can you expect small but new sales orders from your trader…??
- And if your trader identifies small but continuous movement of your products as compare to others even in the period of recession, then can you expect that your trader may buy major stock from you in coming future….???
- If your product moves positively in recession, then can you expect maximum market coverage in next season and for long future…??
- Would you like to know how your product moves fast even in recession period….???
We would like to disclose few facts of Market from which you can get your answers of the previous questions.
Your trader is buying stock from you as well as from many other manufacturers. Because you are making the same product with same quality and of same price range like all other manufacturers are making in their factories. So, the trader tends to buy stock from those manufacturers who offers better discounts or credit terms etc.
What factors does traders consider while buying stock from manufacturers….???
- Better Price.
- Better Quality.
- Payment Terms.
- Delivery Cycle.
- Reputation of Manufacturer.
- Capacity of production and supply.
What factors does retailers consider while buying stock from traders…??
- Better Prices.
- Better quality.
- Payment terms.
- Delivery cycle.
- Schemes and Offers.
- Design.
What factors does customer consider while buying a utensil from retailers…??
- Price.
- Quality.
- Size.
- Market reputation of a retailer
- Type of Material.
- Looks and finishing of a product.
- Design.
- References.
Are you facing the same problems of recession due to Demonetization…???