Summary:
This article is about how well the 2010 Commonwealth Games merchandise is selling in New Delhi, India. Merchandise such as vuvuzelas , t-shirts, Shera(the mascot) plush toys, and more are selling at a fast pase. Many of these merchandise are imported. One example of this is the vuvuzelas, which is imported from China. The merchandise can be bought at places such as the four official stores, four mobile vans, and sixty-three different venues in the eleven stadiums hosting the Games. Like all merchandising businesses, these people invested money into the products in hope of making a profit. Even though the merchandise sold well, it ended up being a loss of money for Premier Brands, the merchandising partner of the 2010 Commonwealth Games, because of delay in sales.
Connections:
There are connections in this article to the merchandising business in chapter 11. Merchandising businesses buy and sell products to make a profit. Premier Brands is an example of a merchandising business. They invest in(basically they buy them) their product, the 2010 Commonwealth Games merchandise, and sell them to retailers for a profit. They also have “official stores” in which they sell their products directly to the customers. The products that were sold to the retailers are then sold to the consumers(customers) for a price that will profit the retailer. Another way it is connected is the shipping of their products. Their merchandise is shipped to them from different places. That being said, there must be shipping costs(freight-in) which we also learned about in chapter 11. Thus, those are the two connections to the chapter.
Reflection:
Ultimately, the article shows that not only sales are important, but also the time in which you sell them. Every merchandising business takes a risk when they buy a product to sell. It could sell right away or not at all. Even when the ending gross profit is high, the expenses of running the business can greatly affect the ending net profit; bad cases end in a net loss. This is one case where it ended in a loss for the business. Still, I think this is the best of the worst outcomes possible for Premier Brands because at least the sales are up and they are getting back some of the money they lost.
Reading this article had made me learn that trying to succeed in a business is a very difficult thing. Businesses have to worry about a lot of high expenses and setting the right price for consumers to be satisfied with. I agree with you that Premier Brands is lucky to get some of the money they lost, but I don't think it would be be the best of the worst because they could have had an equal net profit and expenses, thus earning no money. Thanks for putting this article up as it helped me gain a further insight on how businesses operate.
ReplyDeleteThis article demonstrates how competitive the business market is. Once a popular product comes out many businesses try to make as much profit as possible. But in order to do this they still have to set their prices within their competitors range to maximize profits. It's hard to believe that the merchandising partner would lose money despite sales being high. I also agree with you that merchandising businesses have to take risks and this article clearly demonstrates it. Even though Premier Brands lost money I fully agree with you that they are lucky enough to have gained some of their money back. Overall, this article was a great read and has proven to me that businesses need to take risks. It has also made me think about what business was like during the 2010 Vancouver Olympics.
ReplyDelete-Jason Chang
This article has given me insight on the merchandising business. I never knew that you could lose money while selling a product in a merchandising business. High expenses can easily unbalance the equilibrium of your net income, resulting in a lost of net income. I also understand how timing of which a product is sold is also very important, a slight delay can be drastic to the future of the business. I have learned that many decisions are taken when you start up a merchandising business, each decision is risky.
ReplyDeleteThank you for posting this and keep up with the good work Kevin.
- Michael H.