Friday, January 04, 2008

Learnings from the sale

The Christmas sale that we had in the church is over and although we did not make any money after 10 days of hard toil there is a lot that we learnt from it. In this post I will try and put down all the things that we learnt from the sale. I would like to thank all those that came to the sale and also for all the encouragement and support.

The following are the phases of execution that we went through and I think anyone that is planning to do anything in retail should go through these phases
  • Conceptualization
  • Planning
  • Procurement
  • Marketing
  • Setting up
  • Sales
  • Closure


This is the dreamy phase where everything looks so wonderful. In this phase it is important to put down all your thoughts and ideas. You need to develop a mental picture of what you want to do and where you want to be. It is very easy to drift away into Neverland here but it is important to keep a balance between being too careful and being too crazy. If you are too careful in this phase then there is nothing different in your store and you also may not get off the ground because doing anything from the start requires you to take a risk. If you are too crazy then you will either dream of something so big you cannot execute (due to lack of resources or experience) or may be just impossible to do. So you need to come up with something that is a balance between the two and makes you feel comfortable. Some of the things that need to be decided in this phase are

  • What are you going to sell?
  • Where is your store going to be located?
  • Who are your customers going to be?

One need not get into the details of each one as the details will come in the subsequent phases but in this phase it is important to have an idea so that you can gather the details in the next phases.


In this phase one needs to get into some details that you conceptualized in the previous phase and this has mainly to do with money. Some of the details that need to be planned are

  • Investment - this will go into cost of goods that are to be sold + Expenses.
  • Projected profit - this will be based on what you think would be the quantity that will get sold - always remember that you can never sell all you have. So if you think you have to make double the money you invested when you sell half your stock then you need to price your items more than 4 times from what you bought them at - hmmmm will your customers buy it at this price is completely another issue.
  • Location of the store - this is very critical so that you get the customers you are targeting. This can also be a big expense in terms of rental.
  • Number of people who will work in the store - more the number of people more the expenses and more the management, lesser the number of people and more work it is for you.
  • Advertising - More the advertising more the expense.
  • Competition - Need to understand who is the competition and what is the price they are selling the items at
  • Suppliers - who are the suppliers that can supply you the goods - the closer it is to the manufacturer the cheaper will the product come to you - but there are other issues in getting it from the manufacturer.


Now that you finish planning it is important to start finding out from where and at what price you can source your product. Every product will start from a manufacturer and will go through multiple hands before it is sold to a customer. In every hand the price of the product increases. Now when you are selling a product you will lie somewhere on this chain so the higher you are on the chain the cheaper the items get. The catch here is that the higher you are on the chain higher is the minimum order quantity per item.

At the level of the manufacturer the minimum order quantity may be a 100 boxes each box containing 25 items where as at the level of the final retailer that sells it to a customer it is at 1 single item. So if you are planning to buy it from the manufacturer and sell it directly to a retail customer remember you will have to then find 2500 customers to dispose off all your stock which may not be possible.

On the other hand if you are at the other end of the chain then the price may be so high that it does not become viable for you to sell it because your competition may be cheaper than you and if you go cheaper than your competition you make no money. So finding this balance and procuring your product can be quite a challenging exercise in itself.

Another thing to keep in mind is that when you order higher in the chain the time to supply the product increases so you will have to place your orders earlier.


Once you you have a clear idea of what you are going to sell it is important to decide how to make the customers aware of what is being sold. Since we did not have a very big budget some of the things that we tried out are

  • Making fliers and distributing them as follows - putting them in newspapers, distributing them in other churches, handing them out to customers that came to give it to their friends, sticking them wherever possible, putting it in vehicles in office buildings
  • Hanging out banners - we made 4 banners - we hung two at the location of the sale and we hung 2 outside other churches
  • Made a website and wrote about the website in forums and classifieds - we actually went to the top of Google search results if you typed "Christmas decorations Hyderabad"
  • Mail all your friends and family about the sale
  • Put in messages in various orkut communities that can have potential customers - so we targeted all the Hyderabad communities and christian communities
  • Send SMSs to some of the customers that came the previous year
  • Go through websites like job sites (provided you have an id) and farm from email ids of potential customers and email them about the sale.

Some of the things that we toyed with are

  • Using mginger to send out SMS to the christian target group - but this was proving to be beyond the budget and we did not feel that we will get kind of returns to justify the expense.

Setting up

At this stage you have all the items and have identified the customers to target its time to setup the store (provided you have bought or rented the space already).

  • It is important to plan the layout of the store in such a way that there should be a clean entrance and exit without the customers bumping into each other or any items.
  • The display area should be uncluttered so that the customers can browse the items easily and also see the selection that is available.
  • All the items in the display area should be priced so that the customers can see the prices.
  • The items should be displayed in such a manner that the customer should get an idea of how to use the item.
  • Stock should be easily accessible and organized so that you can service the customer quickly.
  • It should be easy to take out and put the stock back from its display easily.
  • Do not display any stock that is damaged.
  • Items should be easily viewable


In this phase, you have the items on display, the customers have come in to buy - now the challenge is to give them what they came in for. If you are planning to use sales staff then you need to keep this in mind

  • Does your staff know about your product - many a time people come in having no idea of how to use the product so the staff should be knowledgeable enough to explain it to them and how they can use it.
  • The staff needs to have patience and should devote their complete attention to the customer. One needs to understand what is important to the customer by observing the subtle hints that the customer gives you while looking at the product or by what they say - for some customers price is important for others the type of product is important and they really don't care about the price. So for the customers that price is important keep showing them things that are cheaper and cheaper by starting at the most expensive. It is important to keep their interest. For the customers that the type of item is important you need to keep showing them different quality products and keep their attention. The key is to keep the attention of the customer.
  • How dedicated is the staff in making the sale happen - if you do not tie in the payment to the staff to the quantity that is sold then the staff may just not care.

How many staff do you keep ? Too many - and you will just have them hanging around. Too few and you may be doing all the work yourself and having customers leave since no one attended to them. If you can determine the pattern of the customers coming into your store then you can determine the quantity of staff that you need.


Once you finish with all your sales it is important to bring closure to everything - pay off all your suppliers, clean up the place and hand it back to the owners, remove the banners and any other public advertising that was done and analyse all your expenses and your sales and determine how much money you made.


Anonymous said...

And you made it look so simple. We thought you were making millions on your sales.

Sudeep Dsouza said...

It all looks so easy from the outside. I wish I made millions too :)

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