Supply and Demand Crunch

Over at my previous post here, I mentioned that I am facing a supply and demand problem which I could not yet solved. Over the past few days had been the usual of trying to advertise elsewhere to increase demand, or actually to start a new side business to boost demand.

There were also a few times I was irritated at potential suppliers. Prices are determined by the market, a price agreed by most to be the acceptable price at the stated point in time. But nobody specified what would be the standard for market value of a certain product. Sometimes, there are multiple trading platforms which people referenced on. These platforms operate on different standards.

Suppliers would look across the different platforms and select one which is advantageous to them. For example, when the suppliers choose platform A to determine the market price, they would also look at platform B. From their point of view, should platform A is better than B, they would of course insist to use platform A, as they have been doing that all these while. However, if platform B offers a better pricing, suppliers would simply say they have no stock or just simply delay in their reply. They would not outright reject using platform A because it would undermine their credibility. However there are all sorts of cheap tactics which they employ.

Take note that a buyer and seller’s hold 2 opposite views. If platform A is good for the seller, it means it is bad for the buyer.

At a few points in time I was so irritated that I wanted to block off the suppliers and find others. But truth is market is bad and there are limited suppliers. My old time regular suppliers had abandoned me, as stated in the link in the first paragraph. I am still trying to build a common understanding with these ad-hoc suppliers.

As of today, I have found 2 potential suppliers, though one irritates me a lot. They insisted on using platform A as the benchmark, which contradicts me as I have been using platform B all these while when quoting my customers. The result is that I have to constantly monitor these 2 platforms and make a dash for it when the prices are the same across 2 platforms, or when the prices are in my favor. Of course this requires me to increase my reserve stock, which cost money.

Now that the supply issue has been temporarily resolved, the next issue will be to resolve the demand problem. Demand has dropped to 20% of its former volume and I am still at a loss on what to do.

Posted by pencil-leads

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