The products offered for sale are genuine as these big stores purchase directly from the producers. In smaller store, one can never be sure if the product is genuine. It is estimated that nearly 40% of the product sold in the market are fake. In case of vegetables selling by these big players, they are totally failure. You may get fresh vegetables sometimes but not always hence the buyer again move to local market. Even if big players are allowed, they can not wipe the small traders. However, it would ensure genuine products at local store at reasonble price.
The more the number of intermediates, the more will be the cost of the product to the end user. Now the chain goes like this: Manufacturer-> Wholesaler->Distributor->Area Stockist->Retailer->Customer. It varies from product to product. From 3 to 5 intermediates will be there.Each takes at least 5 to 10% profit margin if not more. That means the product is approximately 15% to 50% costlier than the manufacturer's price. In case of Big retailers like Reliance or Big Bazaar, the product comes straight to them from the manufacturer. They take their margin and sell to the customer. By opposing the big retailers, the customers are being denied their opportunity to get the products cheaper. Moreover the huge employment opportunities that lie also cannot be ignored.
RE:Cheaper products to customers - their right
by poonam mandhana on Oct 03, 2007 11:25 AM
Hi NV,
I just differ with you on this matter. You have given a correct supply chain. But all the margin is earned by Big Retailer because you end up paying the same amount as you were paying earlier. It only eats up the bread of the middleman like wholesaler->Distributer->Area Stockist etc. The same pack of Real Juice costs the same in the market as well as in these Big Retail Outlets. Its only the packs which are near the expiry date which are sold cheaper. So, its actually a win win situation for these BIG RETAIL chains and not the customers. If they start giving the same thing which is in the market for 15-20% cheaper then you can say that the customer is winning out of this. I hope you got me.
In the old supply chain the farmer gets only 30 to 40% of the price that the final buyer pays for the same product. they who takes the 60 to 70%??? The intermediary, whole sale merchants and agents and brokers etc.,
For example price of a sun mica sheet of 1 mm (8*4 size) ranges from 700 to 850 per sheet. Do any one know at what price the manufacturers sell to the shops? Local shop fellows have 80 to 100% margin. Same is the case of ply wood and other articles. If you ask for VAT bill, the shop fellows will suggest you that he will prepare a under invoice so that you save on tax. Not really these guys will do 60% invoicing and show 10% profit and balance 40% will be to their black money kitty.
But a corporate retail outlet will not do such things, so the guys will loose their business and more over ther black money generation, which means that the Sales tax dept and Income tax dept fellows also will not get their quota of share in the kitty.
At the same time dont mistake that these corporate retail is good, now they retain the 60-70% margin but only thing is that they pay tax on profit.
Still the realisation to farmer is same and cost to final buyer is same. Instead of profit shared in cash form between various intermediaries it is getting pooled into one or few corporate giants.
RE:Quit retail
by RamGopalVarmaKi DAG on Oct 03, 2007 11:04 AM
What about the lively hood of Farmers/middlemen/small vendors??? will reliance pay monthly Bhatta/pension to them??
RE:Quit retail
by ashish on Oct 03, 2007 12:03 PM
u r s-t-u-p-i-d bunch of As-s-ho-le. Why farmers need bhtta and pension? They can sell their items directly to these retails. Also, these retails can not fulfil the 100% demands of all Indians. Considering the size of Indian market there is enough space to accomodate retail players as well as farmers. Use ur mind "A-S-S-H-O-L-E"
NMRD is a politically backed party and not a NGO These people are also financed by the baniyas, and middlemen to suck blood of the common man. The poor Indian gets better price and better commodities from big retail houses,these guys pass on the benefits they get from the suppliers to consumers to some extent and the consumer saves some of his hard earned income. These so called NGOs are not good for the masses they are good for the Baniyas,middlemen,agents and Politicians.
RE:Big Retails a MUST.
by Suman Dasgupta on Oct 03, 2007 11:20 AM
I completely agree to this. Baniyas have fleeced the common man till now and if there are thrown out of business they have nowhere to go. They have no other expertise bu to count margins!
However will also remind that Reliance is also another side of the same coin. They are going to gain a monopoly in the retail business and ultimately it will spell doom for the common man though initially the commodity prices will come down marginally!
Lastly it's all politically motivated...parties will look at taking sides which carry maximum voters...so NMRD might get the indulgence!!
RE:What about the Jobs?
by Pooja V on Oct 03, 2007 10:46 AM
Unemployment, which is so much in prevelance in our country and issue to be discussed that the politicians and the protesters would loose the topic to discuss in the parliament and else where. Hence, this is something which they will ignore and protest. They are so much used to unemployment they cannot bear to see so many people employed at one stretch.
RE:What about the Jobs?
by Tomahawk Missile on Oct 03, 2007 10:46 AM
Actually american experience shows that for every 2 jobs wal - mart creates it destroys 3 jobs in the local economy. So if you have 2 million new jobs in the organised retail it will destroy 3 million jobs in un-organised retail.
RE:What about the Jobs?
by raj jay patil on Oct 03, 2007 11:03 AM
Lets look at these facts below. Take for example, 1pc Gerbera flower is sold in the market at Rs.7-8/- in a normal season (exclude the peak period when the rates shoot upto even 17/- per flower).
1. The farmer sells to the middleman at approx 3/- per flower. This is the mean of rates prevailing in the year. 2. The middleman may pay any rate for the produce, he deems fit. The farmer has no option but to trust the middleman. 3. The farmer pays for the transport, handling charges(at both his and the middleman's end), the middleman's commission, correspondance charges!! etc. Ridiculous!!!!! 4. The net rate at which the farmer gets his produce is Rs.2.60/- per flower.
The middleman sells these flowers at Rs. 5/- to the retailer.
I hope you all have got the point.
Retailers like reliance, walmarts are procuring produce from farmers directly. The farmers are paid advance, which a middleman woud never do.
RE:What about the Jobs?
by Be Serious on Oct 03, 2007 11:17 AM
Dear Raj, The middleman is also a part of this society. I guess the walmart is not. Why you are so worried that the middleman should not earn money which the walmart can? I am sure that the product cost will be marginally more that that of small retail shops. But the effective management option on the food grains produced will have a positive consequential results on the society and will give benifits. A much larger debate is required to know the effects of farmers, small retailers including the middleman before govt implements anything.
RE:What about the Jobs?
by Sanjay Pandharipande on Oct 03, 2007 11:26 AM
three jobs lost in unorgaized sector to two created in organized sector is quite healthy. Jobs in organized sector will have assurances of the income while in unorganized sector the there is no assurance of fixed income.
RE:quit retail
by Phaltu Uloo on Oct 03, 2007 10:46 AM
Of course, shrewd scheming is apparent. And why would farmers' associations join up? After all they may get a better deal through corporate commerce than with traditional brokers. The whole protest stinks of politics!
RE:quit retail
by suman khan on Oct 03, 2007 10:45 AM
There are middleman who wants to have a major share, its not the farmers/producers its the middleman who are agitating, Reliance Fresh / Subhiksha / Bharti / Spencers all have to depend on the farmers to collect commodities, I believe farmers will be benefited by this. But middleman and the collection authorites will bear the dent, to whom we pay for nothing.
