This Large Company gains a supply, better stock turnover ratio and they reduce the risk of one new product for their country. It is very easy, Buyer2buyers is one global platform where can you cooperate from other companies and other countries. A new competitive advantage for your company called Buyer2buyers.com it’s fast, easy and secure!

A large company has certain inherent advantages over smaller companies.It is usually more established and has greater amounts of funds and resources. It also has more established customers.
Another advantage of a large enterprise is economy of scale. Suppliers (manufacturers) often provide price breaks for retailers who can buy products in higher quantities.

D. K, a retail chain specialising in fashion and accessories, is a living example that there is always a margin for improvement.D.K found a way to gain better prices and also reduce its purchase quantity at the same time. The company started to implement its new strategy by adding a sport jacket to its product portfolio. Manufacturer’s minimum order quantity for the specific product was 20.000 at the price of 10€/unit. D. K’s desired purchase quantity was 10.000 jackets.

In order to locate other Buyers within a reasonable time, D. K became a buyer2buyers member and uploaded this product on the online platform at the price of 12€/unit. D.K managed to attract ten Buyers from other countries and each Buyer bought 1000 jackets.Manufacturer’s quoted price for the quantity of 1.000 units was 15€/unit.

Before & After becoming buyer2buyers member:

Before

  • Cost for small companies: 1.000 x 15€ =15.000€.
  • Cost for large enterprises: 20.000 x 10€ = 200.000€
  • Large company’s average stock after selling 5.000 pcs:
  • Average stock: (20.000+15.000)/2= 17.500
  • Stock Turnover Ratio: 50.000/17.500 = 2,86
  • Days Sales of Inventory: 365 × 2,86 = 127,62 days

After

  • Cost for small companies: 1.000 x 12€ =12.000€.
  • Cost for large enterprises: 10.000 x 10€= 100.000€
  • Large company’s profit from small companies: 2€x10.000 = 20.000€
  • Average stock after selling 5.000 pcs:
    (10.000+5.000)/2= 7.500
  • Stock Turnover Ratio: 50.000/7.500 = 6,66
  • Days Sales of Inventory: 365/6,66 = 54,8 days.

D.K company improved its Stock Turnover Ratio and reduced the risks of new product development. The company also gained a commission of 2€ per unit and by sharing the excess quantity, D.K gave the opportunity to small enterprises to participate in the production.