Question

Vedantika Industries produces a wide variety of beauty products. Their range of skin polishing scrubs, shampoos, face washes and acne masks, and health drinks aids in promoting natural beauty is very promising and impressive. Since they were new in the market, they decided to sell their products through wholesalers. They appointed one wholesaler in each district and promised them that they will remain the exclusive dealers in that area. After few years, during one of the general meeting Sophia , newly appointed sales manager suggested that if they sell the product directly to retailers they will be able to offer competitive prices which will increase the sales turnover and eventually the profits. Sophia was directly supporting the elimination of whole sales.Do you agree with Sophia's suggestions? Give reasons in support of your answer.

Answer 1

Sophia suggests Vedantika Industries should sell products directly to retailers, and I agree because it can offer competitive prices, increase profits, and provide more control.

Step-by-step explanation:

Sophia suggests that Vedantika Industries should sell their products directly to retailers instead of using wholesalers. I agree with Sophia's suggestion for a few reasons:

1. Competitive prices: By selling directly to retailers, Vedantika Industries can offer competitive prices. This can attract more retailers to carry their products and increase sales turnover.
2. Increased profits: Selling directly to retailers eliminates the cost of intermediaries like wholesalers. This can result in higher profit margins for Vedantika Industries.
3. More control: By having direct contact with retailers, Vedantika Industries can have better control over product placement, marketing, and customer feedback. This allows them to tailor their strategies according to specific retailers and target customers.

Answer 2

Currently, most companies are not only trying to eliminate wholesalers, they are also trying to eliminate retailers. Every level of the supply chain increases a product's price, and online retailing is making it more difficult to charge customers higher prices just because you are a local retailer. E.g. I even bought Coke online because they offered a great promotion that included free Christmas glasses.

If Vedantika wants to survive, they will need to first eliminate wholesalers and then eventually try to eliminate retailers (or at least minimize their number). The world has changed, for more than 50 years, Sears was king of retail. Now, they are barely surviving by selling real estate. It is just a matter of time before the vast majority of brick and mortar retailers close, they are dinosaurs trying to outlive extinction. The question should be, "How fast should Vedantika eliminate intermediaries?", not if they should eliminate them.

The key to successful online retailing is offering a low price, and the only way to do it is by selling directly to your customers. It is reasonable to expect that groceries will still be sold at supermarkets or grocery stores, but makeup and other beauty products? Companies must adapt, and that is not something new. How many typewriters are sold nowadays? Soon, we might wonder how many PCs are sold.