As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

Click to email CW8888 or Email ID : jacobng1@gmail.com



Welcome to Ministry of Wealth!

This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

Think Investing as Tug of War - Read more? Click and scroll down



Important Notice and Attention: If you are looking for such ideas; here is the wrong blog to visit.

Value Investing
Dividend/Income Investing
Technical Analysis and Charting
Stock Tips

Monday, 22 February 2010

Low Net Profit Margin - Avoid Them? - Part 2

Low Net Profit Margin - Avoid Them?

Bummy's comment


hum chim peng


Many years ago at the former Maxwell market, there was a hawker stall selling "hum chim peng" at 10 cents per piece (small version) while other stalls elsewhere were selling at 20 or 30 cents per piece (larger version).

It was quite obvious that the profit margin from selling "hum chim peng" at 10 cents per piece was much thinner.

Guess what happened to the customers' buying pattern of "hum chim peng" at this stall?

When the price of "hum chim peng" was only 10 cents per piece, customers didn't buy a few pieces; but they bought in units of 10, 15 and 20 pieces.

I usually bought 10 pieces and ate a few pieces myself and the rest passed around to colleagues as treat. May be psychologically I didn't want to be seen as cheapskate so I bought more.

If the "hum chim peng" was 30 cents per piece, I would just buy enough for myself.

This hawker was able to move massive volume of his product to make up for the razor thin margin. The only difference was that he got to work harder.

No comments:

Post a Comment

Related Posts with Thumbnails