Wednesday - May 23rd 2012
Whole Sale Shop In Mahabaliburam
Shop NAME: New Novelty Big Bazaar
I was strolling through the road towards the Mahabs bus stand, checking for something unique to capture my attention.Well most shops were the usual stuff, until I noticed this place.This shop was well inside the road and I was under the impression that this place should be some junk yard for storing inventory.But to my surprise, I entered to find a large room full of items (more than 150 different items). The owner was right there at the cash counter and I headed straight to him. I started interacting with him, and this conversation lasted close to 45 min. Listed below are my observations.
Shop Background:
The Shop mainly started as whole sale saree shop targeting mid to low income families. It sourced the sarees from Thirupur ( the textile hub of TAMIL NADU) and it has been there for more than 7 years.Post two years of operation,the shop completely changed its business.The owner recalls that many foreigners come and stay at Mahabalipuram for a month or two. They would rent some rooms, but the rooms were mostly basic in nature and did not provide many amenities.The foreigners wanted to buy household items that could be of use for 2-3 months and dispose them off. But most of the household items in the market were costly and the visitors were apprehensive of spending so much for things, that they would use only for a couple of months.The owner understood this need and fore seeing potential growth opportunities, converted his existing shop to a whole sale retail shop that sells household items.The unique selling point of this shop is "ANY ITEM YOU PICK - YOU PAY Rs 45". I draw parallel to the one dollar shops in US or one Euro shops in Germany.
Business Plan/Implementation:
The underlying motive of conversion to retail shop was to provide household items at affordable price.But he was not clear with what should be "THE PRICE". He started collecting information by vising PARRYS in Chennai. PARRYS is the place where you get A-Z of products at cheapest price .He observed that buying household items whole sale from PARRYS would cost him an average of around Rs 25-30.To this he added another 7-10 Rs for Transport/Maintenance cost. He marked up his price by another 5 Rs and has been selling the house hold items at Rs 45 each.The shop follows a strict policy of "NO EXCHANGE/NO RETURN". The shop floor has just 3 feet of walking space and rest of the space is used for stacking the items.
Sourcing Information:
He initially started with a product line of around 50-60 items which he mainly sourced from PARRYS. But for the past few years he has been expanding his product range.His current product range is close to 150-160 different items.His inventory is worth 15 lakhs and purchases 70% percent of his Inventory from PARRYS and the rest from Bangalore.
Customer Base/Sales:
The Shop's primary customers are the tourists .Germans contribute the major share in the month of November while the French account for the month of December.Peak sales are in these two months, while for the rest of the year, it would be normal/average sales mainly targeted at locals and people from Chennai and other Indian cities.The shop opens at 9 in the morning and closes at 10:30 in the night. On a weekly basis, the shop records maximum sales in weekends. Generally, any foreigner buys close to 30-35 items on his first visit.
My view: The idea of establishing such a shop is unique and refreshing but the trade off here is the Quality/Durability for such a cheap price. But for product which is expected to last for 1 to 2 months,this price will be the ideal one that gives the best value for money.
VIGNESH VARADARAJAN
FT 13188
Whole Sale Shop In Mahabaliburam
Shop NAME: New Novelty Big Bazaar
I was strolling through the road towards the Mahabs bus stand, checking for something unique to capture my attention.Well most shops were the usual stuff, until I noticed this place.This shop was well inside the road and I was under the impression that this place should be some junk yard for storing inventory.But to my surprise, I entered to find a large room full of items (more than 150 different items). The owner was right there at the cash counter and I headed straight to him. I started interacting with him, and this conversation lasted close to 45 min. Listed below are my observations.
Shop Background:The Shop mainly started as whole sale saree shop targeting mid to low income families. It sourced the sarees from Thirupur ( the textile hub of TAMIL NADU) and it has been there for more than 7 years.Post two years of operation,the shop completely changed its business.The owner recalls that many foreigners come and stay at Mahabalipuram for a month or two. They would rent some rooms, but the rooms were mostly basic in nature and did not provide many amenities.The foreigners wanted to buy household items that could be of use for 2-3 months and dispose them off. But most of the household items in the market were costly and the visitors were apprehensive of spending so much for things, that they would use only for a couple of months.The owner understood this need and fore seeing potential growth opportunities, converted his existing shop to a whole sale retail shop that sells household items.The unique selling point of this shop is "ANY ITEM YOU PICK - YOU PAY Rs 45". I draw parallel to the one dollar shops in US or one Euro shops in Germany.
Business Plan/Implementation:
The underlying motive of conversion to retail shop was to provide household items at affordable price.But he was not clear with what should be "THE PRICE". He started collecting information by vising PARRYS in Chennai. PARRYS is the place where you get A-Z of products at cheapest price .He observed that buying household items whole sale from PARRYS would cost him an average of around Rs 25-30.To this he added another 7-10 Rs for Transport/Maintenance cost. He marked up his price by another 5 Rs and has been selling the house hold items at Rs 45 each.The shop follows a strict policy of "NO EXCHANGE/NO RETURN". The shop floor has just 3 feet of walking space and rest of the space is used for stacking the items.
Sourcing Information:
He initially started with a product line of around 50-60 items which he mainly sourced from PARRYS. But for the past few years he has been expanding his product range.His current product range is close to 150-160 different items.His inventory is worth 15 lakhs and purchases 70% percent of his Inventory from PARRYS and the rest from Bangalore.
Customer Base/Sales:
The Shop's primary customers are the tourists .Germans contribute the major share in the month of November while the French account for the month of December.Peak sales are in these two months, while for the rest of the year, it would be normal/average sales mainly targeted at locals and people from Chennai and other Indian cities.The shop opens at 9 in the morning and closes at 10:30 in the night. On a weekly basis, the shop records maximum sales in weekends. Generally, any foreigner buys close to 30-35 items on his first visit.
My view: The idea of establishing such a shop is unique and refreshing but the trade off here is the Quality/Durability for such a cheap price. But for product which is expected to last for 1 to 2 months,this price will be the ideal one that gives the best value for money.
VIGNESH VARADARAJAN
FT 13188
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