Thursday, April 2, 2015

SSD Model is no longer sustainable - Part XI

Advertising will no longer work!

When the internet reach was limited, when the wholesalers and retailers had not entered the market in
a big way and when the brands were limited AND there was good demand for air-conditioners,

the Sun was shining for the SSDs.

(a) They got very good leads from their Principal's to sell air-conditioners without much effort
or real salesmanship at play,
(b) They advertised in Yellow Pages and got very good leads,
(c) Companies and institutions encouraged dedicated suppliers for air-conditioners (SSDs),
(d) Small advertisements released periodically in local newspapers and national newspapers
(e) Road shows and melas held in vantage places were productive.
(f) Banners put up in important places drew the attention of many.
(g) 10 to 15% sales occurred due to co-dealers sourcing machines (though at a minimum
or nil margin this helped in the number game).

Good. But unfortunately today none of the above (a) to (g) is going to help in even selling
a few machines!!

It is time SSDs give up the number game and sell machines only to those who do not mind
giving Rs.1500 for installation (splits) and a reasonable margin of around Rs.2,000 on the
cost of the air-conditioner and stabilizer which after providing for transportation and VAT and
Service tax will give a gross margin of around Rs.1000 per machine.

Some years back when margins from AMC, repairs etc was quite good, I used to say that
that I will sell at times an air-conditioner even with a margin of Re.1/=.

I will never ever advocate this to a SSD today!! Times have changed.

Now we have to change ourselves? How?

to be continued...

No comments:

Post a Comment