Sell 4 Summer

Spring marks the beginning of the year’s most important selling season. By December 31, you will need to have already booked at least 60% of your budget profit. But with the uncertainty surrounding interest rates, along with oil and housing prices , how can you make sure of a brilliant profit result?

In Australia and New Zealand, summer holidays and public holidays, followed by the Easter and Anzac breaks, all take a heavy toll on trading in the first half of the calendar year. For businesses with little seasonal change, this calendar means 60% of profit opportunities for Australians have passed by the end of December.

If the business is exceptionally seasonal, like a (southern hemisphere) summer leisure business, July, August, May and June are likely to make an operating loss. You may have to generate 80% of the year’s profit between now and December 31.

So in Australia and New Zealand, the heat is on, and it’s on now! Come January 1, how can you be sure you’ve won the race? Recent Australian economic news shows "two Australias". The wise operator would plan to make the most of both.

Western Australia is in the midst of a mining boom, as is Queensland. New South Wales is nearing stagnation with almost zero growth. Victoria and South Australia are both slowing. House prices in Perth rose 12% in the June quarter, while in Western Sydney, house prices fell by a massive 40% in the same period. Some of Australia has high pressure growth, other parts are grinding to a halt. If these "two Australias" were separate, life would be much easier. Fact is, these "two Australias" are intermingled.

In Sydney, Melbourne and Adelaide, there are highly affluent customers who are caught in a career updraft with excellent spending potential, even though many customers will be less willing to spend. Similarly Perth and Brisbane have struggling customers faced with difficult spending decisions, even though general spending is rising.

Maximizing profit means appealing to both, whether you are a manufacturer or a trader.

Products appealing to struggling or hesitant customers will generally be:

Focussed on their main function
Carry few options
Offer good value for money, and
Be competitively priced.

By way of contrast, products appealing to highly affluent customers will generally be:

Superior at performing their main function
Offer additional and complementary functions
Present superior style and design, and
Offer best value for money.

Characteristically, these two classes of product straddle the middle ground. One is below "mainstream", and the other is somewhat upscale. Moving into these product areas means taking a risk - but consider this:

A few years ago we did a job in a country town. Middle of a drought. Things were tough. There were seven feminine fashion boutiques in the town when we started, but three months later when we finished the job, only three were still trading. The three that were doing something special - something off the mainstream!!

So, whether you are offering a range of manufactured goods to a wholesaler, or selling at retail to the general public, or offering products with installation and commissioning, this applies to you! Look to make and stock items conforming to these parameters in the coming months. Forget the temptation to stay in the middle ground - you’ll completely miss both these markets. Promoting and pricing your special product mix will require special thought, but that is the subject for the next "Management Memos"!