VELOCITY     Accelerating Your Supply Chain Success
The leader in global supply chain solutions

Shift Happens: Thoughts on Industry Change

NO RATINGS
View comments: newest first | oldest first | threaded
Page 1 of 2   Next >   Last >>
Jacob
User Rank
Supply Network Guru
Re: Market growth rate vs the reduced margin
Jacob   2/4/2014 10:34:29 PM
NO RATINGS
1 saves

"As I once observed at a former employer, we lost a buck on every part we shipped, but we made up for it in volume."

Elderg, the effort for selling one piece and thousand pieces are same. So they can offer a better price for volume sales.

Eldredge
User Rank
Supply Network Guru
Re: Market growth rate vs the reduced margin
Eldredge   2/4/2014 9:28:30 PM
NO RATINGS

As I once observed at a former employer, we lost a buck on every part we shipped, but we made up for it in volume.

Jacob
User Rank
Supply Network Guru
Re: Margine and volume sales
Jacob   2/2/2014 11:06:56 PM
NO RATINGS
1 saves

"Yes as long the market is not a monopoly one there will be many options for many buyers. It's the competition for the sellers not the buyers."

You are right Nimantah. Due to competition, customer can have a better price too.

nimantha.d
User Rank
Supply Network Guru
Re: Margine and volume sales
nimantha.d   1/31/2014 10:57:50 AM
NO RATINGS

@Jacob: Yes as long the market is not a monopoly one there will be many options for many buyers. It’s the competition for the sellers not the buyers.

Jacob
User Rank
Supply Network Guru
Re: Margine and volume sales
Jacob   1/30/2014 11:23:52 PM
NO RATINGS
1 saves

"i agree with you...i was talking about the other directions. prices going up are what put customer's on edge. :)"

Hailey, customers always have 'n' options to get the products at a better price. Negotiations, sourcing from alternate sources etc are some of the feasible methods.

Hailey Lynne McKeefry
User Rank
Blogger
Re: Margine and volume sales
Hailey Lynne McKeefry   1/29/2014 1:31:36 AM
NO RATINGS

@Jacob, i agree with you...i was talking about the other directions. prices going up are what put customer's on edge. :)

Jacob
User Rank
Supply Network Guru
Re: Market growth rate vs the reduced margin
Jacob   1/26/2014 11:01:18 PM
NO RATINGS
1 saves

"In my opinion, the reduction in margin can be countered by having increased sales so that the net profit remains same."

Prabhakar, that's one option. Certain vendors are fixing margins in lot. I mean first lot certain percentage, second lot less margin than the next etc. so volume sales are beneficial for both customers and vendors.

Jacob
User Rank
Supply Network Guru
Re: Margine and volume sales
Jacob   1/26/2014 10:58:50 PM
NO RATINGS
1 saves

"Distributors are quite sensitive to margins and margin changes--and sometimes margin decrease can't be passed on readily to price-sensitive customers. I bet this is one of those "easier said than done" moments."

Hailey, most of the distributors are using dynamic pricing method so they can always keep a certain margin on all the sales. When price decrease, they can pass such benefits to customers and vice versa.

Hailey Lynne McKeefry
User Rank
Blogger
Re: Margine and volume sales
Hailey Lynne McKeefry   1/24/2014 7:46:15 PM
NO RATINGS

@Jacob: you said:
suzanne, the effect of such changes in margin can be nullify by volume sales. Normally for large volume sales distributors or vendors used to offer further discount by reducing the margin. For them, they can sell the second product without much effort.


Distributors are quite sensitive to margins and margin changes--and sometimes margin decrease can't be passed on readily to price-sensitive customers. I bet this is one of those "easier said than done" moments.

prabhakar_deosthali
User Rank
Supply Network Guru
Market growth rate vs the reduced margin
prabhakar_deosthali   1/17/2014 6:32:12 AM
NO RATINGS

In my opinion, the reduction in margin can be countered by having increased sales so that the net profit remains same.

So to get the correct forecast of the coming year we need to know what is the growth rate of the component industry. If the growth rate is more then the distributor makes more profit in net terms though not in percentage terms.

Page 1 of 2   Next >   Last >>


More Blogs from Suzanne Deffree
John Beimfohr, Avnet's senior director of integration operations, shares his expertise on what it takes to be an environmentally conscious organization and the green, financial, and social benefits of doing so.
EBN showcases its most-read 15 pieces of content as we review 2013.
Open-source designers have a love affair with 3D printers. That's going to translate to 3D printing going mainstream next year.
In leveraging delivery and logistics practices, Amazon.com hopes to make every Friday a Black Friday this holiday season.
Latest Poll
EBN Newswire
Twitter Feed
EBN Online Twitter Feed