Calculation of different discounts for different manufacturers seems not to be very profitable for the store. Hue has adopted a spreadsheet to keep track of sales performance. The purpose of this report is to get most use of the spreadsheet to analyses the business performance, to look at the market of the same area and to provide some recommendations that might help boost sales and increase profitability of the business. Findings: 1 . Analysis of popularity by manufacturers and type of products As can be seen from
Figure 1, Chef manufacturer was the most popular in July since the total number of sales of Chef was 18 which accounts for 31% of the total sales. Wasting house was ranked the second most popular manufacturer after Chef with 25% of the total sales. The least popular manufacturer was both Seem and Mille, only three products be sold, accounting for 5% of sales in July. The reason for high level of popularity of Chef and Westinghouse products is because the store offered high discount rate for them, at 31% and 25% off the recommended retail price, respectively. Customers are more likely to choose products that save them the most.
In terms of type of product, ovens were at the top of popularity because ovens had the highest number of sales, accounting for 42% of all types of products sold (see Figure 2). Ovens are followed right after by fridges with 13 items out of 59 products of all types, which accounts for 23% of the total sales. Ten ovens out of 16 ovens sold are from Chef. It is understandable because Chefs products offered the most discount price. 2. Analysis of profitability 2. 1 Analysis of profitability by manufacturers Figure 3 shows that Fisher & Payees products generated the most revenue in July with over $13,500.
The argental of Fisher & Payees revenue is 31% of all. At the same time, Fisher & Pale also made the most profit (39. 09%) from its total revenue (see Figure 3). As most of Fisher & Pale recommended retail prices are quite high compared to other appliances. The price mostly ranges from $1000 to $1500. High recommended retail price coupled with low discount rate (15%) made Fisher and Pale the most profitable of the business. Or another way to explain this is that Fisher & Payees sold more effective than others to gain profit. Chef is ranked the second in the most revenue generated by sales after Fisher and Pale.
Revenue generated by Chefs products was over $9,100. However, Chef’s sale does not 1 | Page Business Analysis Report – Kitchens R US. Com create profit ($960. 4 or 10. 50% of sales revenue) as much as it could be in July. Meanwhile, Whirlpool ,which has the lowest sales in the rank, creates nearly 28% profit of sales. Obviously,Whirlpool works better than Chef. In addition, both Whirlpool and Chefs products offered the customer a very high discount rate at 25% their recommended retail price is high. So, even when Whirlpool discount price is high, the business are profitable thanks to low cost price. . Analysis of profitability by product types Ovens are not only ranked the first in popularity but also generated the most revenue in July (over $18,500), followed by fridges ($10,030). Ovens, however, contributes profit to its sale (24%) not as well as fridge’s profit (28%) does . As mention in section 1, because most of ovens are from Chef manufacturer with high discount rate (30%) and rather high cost price, ovens were not making much profit for the business. Meanwhile, range hoods generated the least revenue but brought the store the most profit (35%).
It can be seen that the discount rate for range hoods 20-30%) overall is lower than that of ovens. In addition, the recommended retail price is almost double the cost price, which leads to high profit. 3. Other issues to be taken into consideration 3. 1 Vietnamese appliances market Electrocute, Panasonic, Sandy and Snaky are among the most popular brands in Vietnamese appliances market. The reason for their popularity is that the products from these brands are durable and highly affordable. For instance, Electrocute, Panasonic and Sandy offer fridges which are very affordable.
The price of a fridge ranges from $119 to $954 (Choc Loon 2013), it s cheaper than most of the fridges that Kitchen US is selling (over $1000). According to data from Lazed (2013), Snaky, Electrocute and Panasonic also provide a wide range of ovens with competitive prices ($42-$238) compared to ovens on sales on Kitchen US. Com ($479-$3299). Demonically. Van and Lazed. Van are two big e- retailers as well as strong competitors of Kitchen US. Com. They offer the market with famous and popular appliances brands as mentioned above. Meanwhile, Kitchen R Us. Com does not sell those popular brands, this is a disadvantage for them.
Both big -retailers provide free delivery for all orders. Demonically. Van also offers weekly discount. Return policy within 14 days of purchase is applied in Lazed. Van. In comparison, these two competitors creates more value for customers, which Kitchen Us. Com has not adopted yet. According to Feeds (201 1), 75% of consumers in a survey respond that they would abandon retailers that do not provide freethinking and they also prefer to switch to another retailer with free delivery service. Furthermore, free shipping promotes sales as customers tend to spend more on goods with this service (Feeds 2011).
The new policy of delivery seems to hold back the Kitchen Us. Com business. 21 Page 3. 2 Benefits of using social networking in business Social networking sites allow businesses to access valuable information about their current and potential customers. For example, they can use that information to target the market for particular advertising(Murmur’s, Brisling & Decker, 2004). It is also easier for businesses to keep in touch with customers to get customers’ feedbacks. This might help to maintain and create profitable relationships with customers to capture the value in return of customers’ patronage.
Social networking sites are a great tool for advertising to reach thousands of potential customers on the Internet, which may save he business a lot of advertising cost. Take Backbone as an example of a social any follow their news, the number of subscribers grow along with the customers’ awareness of the store. That will probably open opportunities for the business. The business can make new business contacts with other suppliers to have the best deal on goods. Amazon. Com is a e-retailer giant which practices this method.
After three months of launching, their sales revenue increased by 150% than before, customers darted to purchase goods that they wood not have intended to buy in the past (Tuttle 2013). In conclusion, Kitchen US. Com business is not very profitable due to many reasons. The discount rates are set without careful consideration, which results in high volume of sales, high revenue but low profit (Chefs ovens). Some products are less popular but make the most profit such as range hoods thanks to low cost price. However, the business performance in Fisher and Payees products is quite good with the highest revenue and profit of all.
