Selling direct

The distinct advantage of marginal costing is that it helps the farmer to realise the absolute minimum he has to earn on his products. This is of special value when the farmer is selling directly at the farm gate. 

It is possible to sell directly to the consumer (via farm shops, farmers markets, mail order and internet), or to restaurants and institutional buyers, or to brokers, distributors, wholesalers, processors, food manufacturers, millers, abattoirs, butchers, farm shops, co-operatives, local retail stores, speciality stores and large supermarket chains. If one outlet does not work, it is possible to switch to another. Some farmers use multiple outlets, selling directly to consumers as well as commercially to middlemen. In this way, the farmer is not reliant on just one outlet. Some farmers also take the decision to have their own processing facility, such as milk processing or cheese-making. 

The farmer needs to consider the cost of delivery to each eating establishment. By selling directly to restaurants, the farmer may achieve a higher wholesale price but there will also be a need for high-level service to each customer and there will be stiff competition from wholesalers who have a year-round product line and sales staff. 

The first involves an attempt to replace a competitive plastic in an established application. Market research and market development had reported that a nylon material was being used to make tubing for such items as automotive brake cables. The market was estimated to be several million pounds and concentrated in only a few companies who were making the cables and selling directly to the end user. 

Some of the chemicals can be obtained from photo suppliers. Less common chemicals, such as amidol and pyrogallol, can be obtained from various chemical suppliers. A few suppliers even specialize in photographic chemicals. Not all chemical suppliers will sell directly to the public. Some that do are listed in Resources. 

Not all chemical suppliers will sell directly to photographers. 

The art of selling revolves around converting the interested (potential) customer into a purchaser. It is helpful if you as the producer (seller) can put yourself into the situation (role) of the purchaser. Even if you do not sell direct to the consumer but only deliver to a bulk buyer, you should still have a clear picture of the buying process and be able to judge sales successes and failures according to the inherent laws of the buying process. 

All my books will retail at 22.00 each and with 50% off to dealers, you would make 100% clear profit, since you would sell direct. The students who bought every book would be those most aware of the state of the world. These would be the most likely candidates for a oommunity defense group. These would also be the most likely to go from Jiu-Jitsu to the more lethal aspects of American Martial Arts, including im.provised weaponry. (You would have to let your students learn improvised weaponry on their own, as that subject would put you on very shaky legal ground). 

I believe the computer and computerized techniques will come into prominence as a sales aid in the 70 s—with its proper application being, for example, to advise when to and when not to sell direct and which areas to emphasize. Utilization of computer-generated data by competition will prove a strong challenge to the domestic plastics sales organization in the 70,s. Skilled programming of computers can provide in short time periods your complete costs of solicitation in one area vs. another, which are the most profitable areas, which are the least profitable, and what variable can influence each of these. 

Such a transformation is already taking place in the world gas market (Jensen, 2003). More international oil companies are investing in major natural gas infrastructure projects without the security of fully finalized sales for total output volumes. Instead, companies are counting on their own ability to identify end-use markets at some future time, closer in line to the investment pattern that characterizes development of multi-billion dollar oil fields. Expectations of a premium, liquid US market are a key factor encouraging this change as was liberalization of certain European markets which allowed gas sellers to bypass European state gas monopolies and sell directly to large gas customers and power generators (see Shepherd and Ball, 2006). 

Pricing How much should your product cost What is the appropriate price point Sales channels Should you sell direct or via distributors How your products/ services reach the market is based upon your business model and the nature of your product. 

One response has been the emergence of alternative supply chains that focus on the extended product. Dell sells direct over the telephone or through its Internet site. Dell has also lowered overhead and improved cash flow by using supplier capital to finance its business. In the recent downturn, Dell fine-tuned its pricing to match the markets it serves. So, a laptop for the small business user, healthcare customers, and state and local governments had three different prices — 2307, 2228, and 2072, respectively. Also, these prices change frequently based on overall demand and changes in supplier prices for components. 

To demonstrate the presence of waste in the supply chain, Mentzer and Moon describe a four-echelon supply chain retailer, wholesaler, manufacturer, and supplier. They assume that the retailer that sells directly to an end-user provides a sales forecast of 1000 units to its immediate partner, the wholesaler. The authors note that supply chain trading partners, including the retailer, often hedge their forecasts with safety stock. If each uses a 10 percent safety stock hedge, then the extra inventory that will accumulate over the supply chain is over 100 percent of the needed supply. So, to support final sales of 1000 units, there would be 1105 units in supply chain safety stock distributed along the chain. 

Secondly, Puratos is a business-to-business company we are not selling directly to the final consumers, but to customers producing bakery, patisserie or chocolate end-products. In this context, we are confronted with a diversity of stakeholders and communication channels (Fig. 15.1). In addition, the development time of a product is very short in our business (on average one to two years). We thus need to be able to react very quickly to a sensory request, especially if it comes directly from one of our customers. 

In Chiang et al. (2003), a manufacturer is considering whether to sell direct over the Internet, exclusively through a retailer, or through a hybrid of both approaches. 

Hendershott and Zhang (2001) take a distinctive approach to modeling the hybrid channel arrangement in which a manufacturer can sell directly or through intermediaries. In contrast to the other models discussed in this section, the number of firms in their intermediary echelon is not discrete. 

Companies licensed by the Competent Authority to manufacture are also licensed to supply those items for which they have been granted a Marketing Authorisation. They can sell directly to pharmacies and elsewhere in the medicines supply chain e.g. to licensed wholesalers and registered pharmacies. A number of bulk items such as intravenous fluids are often supplied directly to pharmacies. 

The spot prices shown in Figure 10.2 apply to marginal trading from day to day and usually represent 10%-20% of supply. Most trade is 3-10-year term contracts with producers selling direct to utilities, but with the price often related to the spot price. 

Hair-care products (Madam C. J. Walker) Walker trains a successful sales force to go door-to-door and sell directly to women. Her saleswomen, beautifully dressed and coiffed, are instructed to pamper their clients. 

We have undertaken to sell our products by essentially all the means known to us. In Canada we sell directly. In the United States we sell directly and through non-exclusive agents for particular products and in some cases in restricted locations. Off continent, we sell mostly through agents, by which means we are represented in some 75 countries. We have sought and received help from Canadian Trade Commissioners. We have sold for cash and we have sold for credit. In two countries in Europe, because of customs duties and local competition, we have licensed manufacture of our therapy machines. Every two weeks, on average, our people travel a distance equal to Yuri Gj arins trip around the world. ... 

Consider 10 manufacturers each supplying one item to 100 retailers. If each manufacturer sells directly to the retailers, there would be 1,000 transactions. 

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