Supply Driven Economy - Securing Supply Will Now Drive Your Business Profits

Securing Supply Will Now Drive Your Business Profits

Entering into the third year of a pandemic, Covid-19 has undoubtedly turned basic economics on its head.  For the first time in 60 years, supply is determining economic growth, rather than demand. The difficulty in getting supply is a problem; but finding ways to get good supply can create great opportunities - if you have the product you will make the sale. 

As a business manager, you have rightly needed to focus on sales. 90% of your time was spent on sales, and 10% on supply.  This now needs a big shift.  Securing regular and well priced supplies must now take 50% of your time; it is that important. 

Demand has been so strong coming out of Covid, with no overseas travel and low interest rates having been a big driver of this. The challenge for business is how to supply this. 

It is expected this high demand will last for all of next year. As supply shortages and slow shipping times are expected to continue for all of 2022, you cannot ignore what is happening.  If you are not proactive with securing good supply,  your business will not only miss out on this opportunity, but your business will go backwards. 

Building up stock will need you to manage cash flow well.  Keeping a cash buffer, or loan funds available, is important during these uncertain Covid times. Securing good credit on your supply will also help with cash flow. 

Another challenge with short supply is that the price of many goods are rising; for example, steel. The problem with this, is that it can erode your margins.  If you quote a price, then when you get the stock it costs you more, you have lost profit on the sale; thus, having the product in stock could mean the opposite.  The stock is now worth more than you paid for it, so you can make even higher margins than normal. 

Are you ready to turn the supply problem into an opportunity for your business?