You have a sole-proprietorship merchandizingbusiness dealing with photography eq

Question

You have a sole-proprietorship merchandizingbusiness dealing with photography equipments. The business wasestablished 3 years back and had an average annual turnover of $50,000. However, over the last 6 months the monthly sales havefallen considerably. To reverse this downward slide you areconsidering selling the products on a credit basis of 15 days toall your regular customers. There are approximately 25-30 suchcustomers. In turn, you also plan to ask your vendors to increasethe credit period from 15 days to 25 days for all payments. Isbuying or selling the products on credit basis a good decision ornot? Explain.

Explanation / Answer

Buying and selling on credit is not the only means to increasesales.

Sales can also be increased by :

Giving quantity discounts on bulk purchases .

Advertising

Cutting down on unnecessary costs .

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