Let's say we have three products: high margin and low volume, low margin and high volume, and low margin and fast selling. Which product do you want to sell as an entrepreneur? Generally, the most common answer is that we should sell the highest margin product. But, from an Return on Investment (ROI) or Return …
Continue reading High margin, High volume, High velocity – Which do you prefer?
In retail, one of the most common negotiations between a buyer and a seller would be something like: If you want the price to be lower by x%, you need to pick up y% more stock right now. Where is this coming from? What does this even mean at a deeper level? We have seen …
It is the festive time of the year again in India and like every October we are going to see a huge e-commerce sales season in the form of Flipkart Big Billion Days and Amazon Great India Sale. In this post, we will talk specifically about Flipkart Big Billion Days and the expected offers that …
In retail, getting the selection or assortment right is a continuous pursuit in response to the changes in the market and is driven by both a quantitative and qualitative understanding of the category and, therefore, there is no clear science to it. A category should maintain a constant selection pipeline to drive customer value – driven …
Retail management is all about the rotation of capital. To emphasize the importance of rotations, let us take an example: Let's say I have Rs.10,000 to invest in my business and I am reasonably good at making sofas. So, I invest my Rs.10,000 in raw-material and labor and make a sofa costing me Rs.10,000 (exhausted …
Continue reading Head & Tail Categories – Selection, Turnover (GMS), Margin and Rotations
Retail excites me a lot because it is a simple business of buying and selling goods and yet it covers almost every complexity under the sun. It has a complex supply chain from raw material to finished goods, yet seeming so simple and convenient when we add items to our shopping cart in offline and …
I spent time on Friday helping a client update spreadsheets and Excel reports that used an incorrect formula to calculate the margin on bids for construction jobs. While this particular client was looking for a margin of 25%, he was actually getting one closer to 20%. On a $100,000.00 bid, that can be the difference …
Continue reading Are You Losing Money By Calculating Margins Wrong?
For a retailer such as Amazon or Wal-Mart: Sell-in: how many units of a product is a manufacturer selling into the retailer Sell-out: how many units of a product is selling out to the customer (from the retailer) Sell-through is the same as sell out. They just invented it to confuse you. For a manufacturer: …
This is a post that is written on gyaanokplease.blogspot.com and the link to the original article is here. I just cannot emphasize enough about how well this article has been written and hence I've included even some of the comments. Thanks to gyaanokplease for this post. So probably the first thing that your distributor/dealer/stockist is …
Channel design is a crucial element in any product's marketing plan. It is sometimes the most crucial factor for success. A channel designed properly will bring in customers and increases your market share. Most of the times a channel is designed by the marketing teams and the structure and the maintenance is done by the …
Continue reading Service Output Demands and Sales Channel Design
If you speak to any Territory Sales In-charge or Manager (TSM) of a large FMCG company, they are going to mention one huge problem called price undercutting that affects their daily work. In an earlier post, I have written about how the wholesale trade leads to price undercutting. In this post, I am going to write about …
Continue reading How the visibility budgets are used for price undercutting in FMCG?
Wikipedia defines price undercutting as: 'Price cutting, or undercutting, is a sales technique that reduces the retail prices to a level low enough to eliminate competition'. It is obvious that price under-cutting happens mostly to boost volume sales. This article is about how undercutting works in the context of Indian FMCG. Brief Overview of the …
Continue reading How Price Undercutting happens via Wholesale Trade?
As per IAMAI, the current number of Internet users in India is around 150 million users (~50 million in Rural) growing at a CAGR (2010-12) of 40%. This number is expected to grow to around 300-350 million by 2015. This means 30% of India is online covering most of the Urban India, which is where …
With increased exposure to global brands, latest internet communications, and desire for better lifestyle, the consumers today are looking to use the global, trendy, life-style oriented products and are demanding more in terms of the shopping experience, simplicity, quality products, and value. The evolution of Modern Trade is just meeting the demands of these consumers …
Earlier, 100% FDI is allowed only in the wholesale (cash & carry) market 51% FDI is allowed in Single brand retailing like Adidas, Tommy Hilfiger, etc. FDI is not allowed in the Multi-brand retailing like TESCO, Carrefour, and WalMart Now, 100% FDI is allowed in Single …
Continue reading India opens its FDI gates in multi-brand retail
India's branded apparel market is estimated to be around Rs 15,000 crores. Madura Fashion & Lifestyle, an Aditya Birla group firm, plans to expand the retail presence of its apparel brand Van Heusen across India. At present there are 135 Van Heusen stores across 30 cities of India. The company aims to add 60 retail stores …
The typical chain for a grocer store FMCG product will be: Manufacturing plant -> Company Ware House -> Regional Ware House -> Regional Stockist or Depot -> Super Stockist or Depot -> Stockist/Depot -> Distributor -> Retailer Main Godown -> C&F Agents/Super Stockists -> Distributors as per the territories -> Wholesalers/Retailers So, the retailers either …
The Indian Automobile market has been majorly seen catering to the needs of the Tier 1 and Tier 2 consumers. Tata has been one of the brands that cater to the Bottom of the Pyramid markets. Tata Motors launched The Magic, developed on the platform of the stupendously successful Ace for urban and rural areas, …
The planogram is a visual diagram, or drawing, that provides in detail where every product in a retail store should be placed. These schematics not only present a flow chart for the particular merchandise departments within a store layout but also show on which aisle and on what shelf an item is located. A planogram …
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