“Lingam General Store”

The shop owner, Mr. A.K.Natarajan, established the shop in early 70’s with an initial investment of Rs.5000. For this venture, he was also supported by his brothers of the monetary help, who had established many businesses around Mahabalipuram on their own.

The key points noted are:

·         The store is open every day, barring the national holidays. Store Timings are from 8:30 AM – 9:30 PM with a considerable 2 hr lunch break from 2 – 4 PM.

·         Whole of the inventory management is done manually; Mr. Natarajan was successfully able to keep a tap on the workings of his store with the help of a single helper alone.

·         He reported that the footfall was more on the weekends as compared to weekdays, where the majority comprised of tourists and sometimes the locals.

·         Despite having a considerable sized store there was just one helper in the shop, to which Mr.Natarajan blamed that it was a tough task to get faithful workers. And also it was very difficult to keep an eye on too many helpers at the same time.

·         Replenishment techniques:

o   Milk was delivered by the vendor in the evenings, which was to be distributed the next day.

o   Snacks and eatables in 3-4 days.

o   Shampoos/soaps in 3-4 weeks.

o   Stationeries, in approximately 1 month.

·         The income is deposited in the Indian overseas bank, located nearby, on the regular basis.

·         Every six months the shop is monitored and cleaned to check for damaged, expired and spoilt goods, which are then returned to their respective vendors. The corresponding amount is adjusted in the future orders, but no money exchanged hands.

·         He also mentioned that whenever a new product is launched by a company, the shop is never provided with any free trial samples. So keeping the risk factor in mind, the shop owner bought only a handful of items and monitored the customers response before ordering the same items, the next time.

·       There was no specific process of reporting/recording the profits incurred in the business.

·         In the early years, when he could trust his customers, he would give credit sometimes, but since the last few years he had to deal with many defaulters. As a result he has stopped giving credit.

·         It was also noted that a customer when purchasing a durable good(like a pair of scissors) for the first time, enquired about the product from the shopkeeper first and then after being sure of making the necessary checks and parameters , he had in mind(price, smoothness, sharpness) would actually buy it. Customers were taking less time to buy a product which they had already used or decided to buy before arriving at the shop.

·         He also reported that the replenishment was done for different goods based on the funds he had, and according to the 4 basic principles of demand and supply.

·         The goods were arranged in such a way that each shelf was occupied with similar goods (i.e. oils, shampoos, body spray of different brands clubbed together). This would reduce the time required to deliver the product to the customer as well as giving a wider choice to the customer.

·         I also noted that if the owner felt that a offer was going on a product which the customer was there to purchase and was unaware of the offer, he would apprise the customer of the same. This would help to benefit both the customer satisfaction as well as the sales of the store.

Suggested changes to reduce the manual effort put into the running of the store

·         The Inventory records can be fed into a computer system, which would keep a track of quantity of different goods, amount of sales, which would in turn reduce the time required to flip through the pages to check the records.

·         The profits can also be calculated in the computer system, and the shop owner can take decisions on the further enhancements of the shop facilities and hence take the business further and take proper replenishment decisions, instead of relying on the gut feeling.

·         Also as in urban areas, it is common to get free samples of FMCG goods for consumer trails. This can also be introduced in the rural areas, if the cost associated with it is justified.

Last but not the least i would like to thank Mr. Natarajan for allowing me to have an experience of how his shop is run.