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Jacob
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Re: Market growth rate vs the reduced margin
Jacob   2/4/2014 10:34:29 PM
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"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
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Re: Market growth rate vs the reduced margin
Eldredge   2/4/2014 9:28:30 PM
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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
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Re: Margine and volume sales
Jacob   2/2/2014 11:06:56 PM
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"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
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Re: Margine and volume sales
nimantha.d   1/31/2014 10:57:50 AM
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@Jacob: Yes as long the market is not a monopoly one there will be many options for many buyers. Itís the competition for the sellers not the buyers.

Jacob
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Re: Margine and volume sales
Jacob   1/30/2014 11:23:52 PM
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"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
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Re: Margine and volume sales
Hailey Lynne McKeefry   1/29/2014 1:31:36 AM
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@Jacob, i agree with you...i was talking about the other directions. prices going up are what put customer's on edge. :)

Jacob
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Re: Market growth rate vs the reduced margin
Jacob   1/26/2014 11:01:18 PM
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"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
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Re: Margine and volume sales
Jacob   1/26/2014 10:58:50 PM
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"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
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Re: Margine and volume sales
Hailey Lynne McKeefry   1/24/2014 7:46:15 PM
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@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
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Market growth rate vs the reduced margin
prabhakar_deosthali   1/17/2014 6:32:12 AM
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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.

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