Let’s assume you are a shop owner and you are running a store may be grocery or medical store or something similar. Now one day a customer comes to your shop and ask you for a hair oil of a particular brand, for example, ABC company hair oil which you had never heard of earlier so you inform the customer that this product is not available with you. However, you try to suggest some substitute to the customer but customer refuse and insist only for the ABC hair oil brand so you deny the customer and he/she returns back.
After few days another customer comes and ask for same ABC hair oil, you refer other brands, but customer insisting for ABC hair oil and returns back.
Now, in a month this happened quite a few times and it irritates you to the core and while you inquire about this product suddenly like an angel a sales person comes with an ABC hair oil brand and ask you if you are interested in keeping the stock of this hair oil brand. The sales person fakes the story of how successful his product is in your nearby cities and in other states. Also sale men show a good margin of profit as well. Now, due to your last few week’s incidents of returning customers for this product makes you stop thinking about anything and you without giving a second thought orders the stock.
After taking down the order now the sale person up sells and says this product is directly coming from the factory and due to the effectiveness of the product it is every much in demand therefore, the production is less than the demand so why don’t you stock more right now because not sure whether, you may get the next stock in a month or two. So you agree with him and order more stocks in advance.
Now, you are loaded with the ABC hair oil stocks and wait for the customers to come and ask for the hair oil. But to your surprise week passes two weeks passes not a single customer has come suddenly you realize that something is fishy because no one has turn up to buy this hair oil. Over, a month this product became a dead stock and now you starts up selling this hair oil to get rid of the dead stock.
If you are capable or lucky enough, then you can get rid of the stock other wise you have to bear the loss.
So what’s the ABC hair oil company trick:
- Sending their own people as a customer to the shops asking for ABC hair oil only. And creating a fake curiosity and a need in the market for ABC hair oil in different shops in different localities.
- All of sudden the ABC hair oil sales men appears like an angel since there was already a fake curiosity was created it became easy for the salesman to take the orders without much effort. Since it is manufactured locally they give a good margin to the retailers which attracts the retailers.
- The salesman makes sure to put the maximum stock as possible because he knew that their marketing strategies is fake and he won’t be able to come and put more stock again so he tries to take orders as much as possible in one time.
- Whether you have paid fully or partially for the stock no business men or store owners like to have a dead stock so he starts up selling the hair oil himself to get rid of the dead stock which ultimately benefits the ABC hair oil company.