Depression Not A Reason To Be Depressed - Papermart
Industry Watch

Depression Not A Reason To Be Depressed

There is no reason to be depressed in the depressed market conditions. “Trade is for us, we are not for the trade.”

Mr. Abhay Jain, B.N Paper Co.
Mr. Abhay Jain, B.N Paper Co.

Period of depression / slow down is like an Annual Maintenance taken by industry or like servicing and polishing of our cars. These activities are undertaken so that Factory or Car runs smoothly and efficiently in times to come.
This maintenance, service and polishing of our business means clearing of backlog like accounts, old stocks, getting rid of unnecessary overheads, reselection of customers, reassessment of our strengths and weaknesses etc.
Therefore this period should be taken in a very positive way so that our business remains progressive and profitable. Now the question is how we do servicing and polishing of our business in this period of depression. We should observe the following critically and act accordingly:-

Concentrate on profit margin than turnover
No doubt achieving a certain turnover figure indicates the health and satisfaction of our business. But, during depression, we must ensure a certain minimum Gross Profit Rate in all transactions. Increase in turnover is not welcome at loss. Under normal conditions, we at times do not insist for a fixed margin for increasing the turnover.

Keep stocks at manageable levels
Since MOP (Market Operating Price) is not in our control, we must ensure that we are not affected adversely by sudden fluctuations in the market. We are traders and our selling prices are determined by our cost of purchase. Hence stocks should be kept at manageable level.
Manage Credit intelligently
It is the time when we should be very selective of customers before extending any credit to them. We should be extremely cautious of the customers, who are in the habit of diverting capital from business for investment and speculative activities, or who do not follow sound business policies. Our business is to facilitate the business activity and not that of a money lender. Therefore, a strict credit rating must be made and acted upon for each customer.

Avoid speculative trading & long term commitments
Speculative selling and buying deals or long term commitments will invite avoidable disputes, loss of mental peace and financial setbacks.

Interaction within traders, customers, suppliers
It is very important and necessary to have a trade forum, where traders can meet regularly and discuss among themselves on various issues relating to our trade. Its benefits are huge as many times we come across some very useful confidential information and experiences among the traders themselves. We must take advantage of the collective wisdom available at hand and beneficial to all. This is not at all the time of being afraid or worrying about everything. This is the time to be alert, analytical and work hard to enjoy the fruits of life. These times also bring with it a lot of new opportunities, which we must identify and en-cash.
Success = Long Term Planning + Positive Approach + Dedication.