In one of the last blogs, I dedicated some words for persons who are just starting up. I am of the opinion that unless you are too sure of the potential of market, you should not start manufacturing. Instead you should think about supplying same type of product from another source & do the marketing. This has its own advantages. For one, your capital cost is very low. You just need to invest in office & buying of stock. You can then repack it or just distribute it to customers by setting your distribution network.
If you feel that there is good response to product, then just expand the market. When you are confident that you now have market and can save margins by backward integration I.e. manufacturing, then you can go ahead.
Second advantage is that you start some product & if you do not get great feedback, then you can actually sell the whole stock at discount to other buyer & start other product. In this way you save time & money.
Third, starting manufacturing takes its own time, to set up factory, to bring machines, to recruit, to tie up for raw material, etc. In fact one of our vendor had commented that if you want to take revenge on somebody, guide him to put a SSI unit. He will never come out of the circle.
I hope you are getting my point of view. Of course these are general cases and yours might be different.
No comments:
Post a Comment