We were talking about how the whole sale business can survive under the environment where the direct sales has been prevailing.
This time, Mr. Inamori talks about the essence of the wholesale business.
Case
Company A (A corp) created an agricultural corporation. A corp buys products directly from farmers and sells them to various retailers such as supermarkets for restaurants. For retailers if the price is decided in advance, it will lead to stable management. However, when the weather is unseasonable, the supply from farmers decreases, and A corp can’t secure sufficient quantity from the market. However, retailers push A corp to deliver the contracted quantity at the agreed price. Thus, A corp buys and delivers agricultural products that are expensive in the market. This does not increase the profits of A corp. What should they do?
Mr. Inamori advised to revise contracts with the farmers and the retailers after carefully reviewing the terms and conditions.
At that time, the points to consider are as follows.
1 Considering the “reason to be “of the wholesale.
2 Putting yourself in other parties’ shoes
3 Bringing altruistic minds
4 Relying on experts
5 Conducting with courage
6 Analyzing numbers
4-6 will be explained in this Blog.
４ Relying on experts
Inamori said, “You have to discuss terms and conditions under the bad weather together with a lawyer and revise contracts with a farmer as well as with retailers. It’s not just to protect your margin, but for other parties’ benefit. You should find a lawyer who can understand the fairness and significance of altruism. “
Some business owners are very reluctant to rely on such specialists. If they ask an expert, he will charge an expensive fee. So it’s better to do everything in house. Many presidents think like that. Here, too, the subconscious mind affects top leaders’ decisions. Getting rid of such a mindset, leaders need to find a good and competent lawyer to develop a sensible contract.
5 Conducting with courage
Your customers may give you pressure and force you to keep the condition. But you should convince them: “We can’t accept the condition under such contingency. Please understand our business model. To maintain the long-term stability in your business, we have been working as a buffer between farmers and you, retailers. We have absorbed a sort of great damage on your behalf. If you don’t have an intermediate function like us, you’ll always have to buy the products at the market price, which looks quite volatile depending on the weather.”
Mr. Inamori said that presidents have to convince retailers by addressing the benefit of having intermediate brokers.
6 Analyzing numbers
A corp had a very low profit of 1% to 2%. After all, the result had come from the subliminal mindset of the management. If you think that you cannot make a profit by any means, you would never get out of that negative spiral. In other words, the business leader considers himself as “a person who is supposed to be treated badly”. As he allows himself to be treated in such a negative way, he would keep having misfortune, and he would never have good profit, say above ten percent.
This may sound too exaggerated however this kind of mindset has nowadays been seen in many people.
“I feel unbearable lightness of my existence. No matter how hard I work, I can’t make any profit”: this can be interpreted as “no meaning of my existence”. He has been making his own position as low as possible, while creating this negative spiral. If the top leader has such a trauma of self-denial, only people who can share such feelings with that leader come to the company A. Staff with a positive mind would leave that company as it was an uncomfortable working environment for them.
By analyzing numbers, we can find a lot from the company, as Mr. Inamori pointed out. I think only top leaders with courage and responsibility can objectively analyze the numbers of their own companies.
So, again, the six tips for the wholesale business to survive are as follows.
1 Considering the “reason to be “of the wholesale.
2 Putting yourself in other parties’ shoes
3 Bringing altruistic minds
4 Relying on experts
5 Conducting with courage
6 Analyzing numbers
Among them the number one, Considering the “reason to be “of the business is quite important. This is relating to our subliminal mindset. Those who have some trauma in their mind can’t find those reasons to be by viewing their business through a straightforward approach. Therefore, maintenance of top leaders’ minds is always quite important.
Further queries or doubts, please email to ytomizuka@abrilsjp.com
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- e commerce, Inamori, Kazuo, Kyocera, logistics, Whole sales
