Tuesday, March 31, 2015


So we saw how the AC companies used the Service shops as a platform to increase their
volumes. After a period of a few years they found that these "small" (but profitable) shops were
not the right people to invest several lakhs of rupees as working capital to buy air-conditioners in
volumes of 50 and 100 and sell them in the market for lesser margin. Nor did they have the reach
in terms of storage and delivery logistics.

Therefore they were left with no other option but to approach the appliances wholesalers and retailers
to buy in bulk and distribute them to sub-dealers and technicians who had/have dedicated customers.

This being so there was another development. The BEE brought in the rating system of 1 to 5 stars.
The companies had to increase the models to have different star categories in each model and capacity.
SSDs with limited stocks found that to cater to the customer they had to carry  a fairly large stock, much beyond their means or capacity.

As the volumes to the companies soared providing service was becoming difficult. Thus the "Service Franchisee" model with toll-free number was brought up. While the retailers were happy to sell volumes
and make money the could not be expected to take up the burden of service and installation. This works well.

The AC&R repair shops became sophisticated SSDs selling more of air-conditioners and doing little of
repair and servicing work. The goose that layed golden eggs was transformed to goose that lay just ordinary eggs. (No fault of anybody - just the way the market dragged).

Now that goose is finding it difficult to even lay ordinary eggs!!

It is high time that a majority of the SSDs de-link the selling activity and release locked up capital and also lessen the burden of interest and storage. They have to go back to their roots. Servicing and repairng activity.

But is it possible?

to be continued....    Inputs are invited from experienced friends in this group...

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