Most of you know that I have started a new business and things have been going very well. I have been working on this for months now and thought a brainwave would increase the sales having a ripple effect to my pocket. Sometimes things don't quite pan out how you see them as you have overlooked certain things.
One of the biggest accounts I have is a wholesaler that covers the Johannesburg region and beyond. My brainwave or brain fart was to put them on consignment stock. This would enable them to grow at a faster rate as they wouldn't be cash strapped and would have stock on hand. They would pay for what they sold and it would just roll over to the following month. It has worked as their growth is showing 15 % already.
The reason why the ripple to the pocket hasn't happened as yet is that they are holding around 25% extra stock. Our margins are tight and all the ripples for the pocket are now sitting in stock in their warehouse. This is one reason why we are opening a new warehouse in Johannesburg so we will have their stock on hand as they need it. Having stock available on hand will just make more sense and will get us all paid how we were before I changed things.
The good thing is that the account has grown quite a bit so there has been some positives and the money owed is like a savings account now. Just shows that not every idea is a good idea.
Image source breitbart.com
