The New Economy – Understanding the mechanics of the marketplace

Lets take the example of a nasi lemak seller;

He sells to a shop where there is a coverage of 10 blocks, each block with a household of 80 flats. Each packet cost $1 and the profit is 50% for every packet he sells. On an average weekdays, he sells 50 packets and weekends, Sat & Sunday, he sells 100 packets each day. How many packets he will sell in a week? 50×5=250 + 100 + 100= 450 packets weekly. How much will he make weekly? $225 dollars weekly. How much will he make in a month? $225 x 4 = $900
What then will be his investment? He spends an average 6 hours daily going to market and cooking. What will be the potential of his earnings? $225 divide by 6 hrs x 7 days = $5.35 an hour. Will he be better off working at Macdonald’s?
Let’s say there are other reasons, and his work as a nasi lemak seller helps him spent more hours with his family. Is there a method or ways to increase his income without spending more hours? Yes and No. Let’s say he speaks to another shop keeper in another estate with another potential pool of 100 blocks, and he therefore can double his earnings, but what is the cost of producting an additional 450 packets weekly? Let’s say he needs another 2 hours daily, what will be his real earnings per hour? Let’s say what he is selling is breakfast only, and he has a potential to sell malay cakes in the evening with similar profit margins. Are you able to calculate his new earning potential? If you understand these basics, you will not have to worry in the New Economy, you will have the knowledge and the mechanics to survive in any markets.
And I have the ability to see the potential of any given scenerio. This is just a very narrow view. Let’s zoom out, and say if you want to find out the % of people at the national level consuming nasi lemak for breakfast? What about the breakdown in different towns in Singapore? What about the potential of other Asian cities? The whole world? Today finding the answers is not an impossible task. Nasi Lemak has a lifespan of 12 hours before the coconut milk in the rice goes bad. Do I then have a global market? If I want to sell nasi lemak nationally, how to penetrate the market in different towns? Can I as a single person distribute? Who are my competitors? What is my market share? How to have the best profit/cost scenerio. I don’t think a single nasi lemak seller is as crazy as me, but that is how I am able to tame any markets.


Author: Gilbert Tan TS

IT expert with more than 20 years experience in Apple, Andriod and Windows PC. Interests include hardware and software, Internet and multimedia. An experienced Real Estate agent, Insurance agent, and a Futures trader.

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