Section 14 Stability of Demand

February 7th, 2013 Leave a comment Go to comments
WINNERS = Products which will be in demand day in, day out, year in, year out.

The ideal product is one which is always in demand.  Unfortunately many products have high demand periods followed by minimal or no demand periods.  The length of the peak selling period and slump periods vary with each product.

Some products are manufactured all year long to supply a large one-time seasonal demand or Christmas need, such as Christmas tree lights, tree stands, etc.  Other products may be manufactured for only two or three months of the year, prior to the peak sales period, to supply a smaller one-time seasonal demand.  An example might be snow shovels, where there is a fairly predictable annual need for a relatively small quantity of product.

The trick here is to avoid having your peak periods and your slump periods look like a line of “W”s on your revenue graph.(WWWWWWWWWWW).

The Individual or small investor, would be wise to look at what kinds of “line extensions” can be manufactured in a facility, or bought from other suppliers, and sold to fill the gaps between peak sales and slumps.  The wise developer or seller of snow shovels might well think about taking on a line of gardening equipment to sell in the warm months.  This is an important factor and your path should be mapped out before developing or investing in such a product.

Products which are considered to be stable are generally a much better risk.  If the product is targeted to mothers of newborn infants, the “Statistical Abstract of the United States” will give you a good idea of how many births are predicted for the next two years.  The baby product would be considered to have a stable stability of demand.

Remember that all market variations and fluctuations (in orders) will cost you either inventory or capital, or both.  Sales patterns must be foreseen with reasonable accuracy, to enable you to make the maximum sales possible without excess inventory.  Believe me, this is no easy trick.

In the case of a fad item, you must be able to predict when the stability of demand is slackening, to enable you to run out of product minutes after the last order has been filled, but not one minute before.  A classic example is a friend of mine, George Coakley, who masterminded the marketing plan for the world famous “Pet Rock”.  They co-ordinated their manufacturing and sales so closely that when the orders stopped, they had only a handful left, and were not stuck with excess inventory. You can reach George at:

The saddest situation of all is having orders and no product because your forecast was incorrect and your manufacturing cannot “ramp-up” in time to fill them between your normal ordering cycles.  It’s horrible to watch a sale drift away!  It’s like a fisherman who has the “GREAT WHITE” trout swim right up to the boat, and then discovers he left his net at home.



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