Balancing Supply and Demand for Your Business
Supply and demand is a microeconomics classification of customers and producers. We as customers are interested in goods and services provided by producers. Relying on many factors, supply is driven by the cost of goods. This is one of the driving factors behind Black Friday. How do we balance supply and demand? If businesses increase their pricing, causing their inventory, or supply, to increase, consumers may not be able to afford all the goods they need. How can we implement a comparable balance? Jonathan Osler might suggest an increase in the sale of goods. This could allow for more of a particular item, such as dry goods, to be bought, and other nonperishables. Some markets sell more cost-effective goods to consumers, the Dollar Store. As a result of supply chain woes, prices will increase at the Dollar Store, too. Supply and demand have four basic laws. First, consumers want quantity, and they will pay for it. Producers will make more supplies because they want to continue to make a profit. Second, when there is a decrease in demand, causing no movement in supply, prices come down. So, this will completely stop the production of new goods and services. Third, as the change continues to shift, and there becomes more supply, hence decreasing demand, giving consumers buying options prices come down. We have now come to our fourth law of supply and demand, when demand outweighs supply, price increases. Customers will and have paid higher prices to get the supplies they need. An example of supply and demand when costs rise is putting gas. A full tank will rarely cost the same from one fill-up to the next. When there is a gas station at every corner, station owners will price gauge to help their bottom line. If an exclusive apparel line will purposely sew a certain number of pieces to maintain demand for their product line. While increasing their profit line. Businesses know how to manipulate supply and demand oftentimes to work in their favor. Jonathan Osler teaches in Berkeley California and knows the importance and correlation of economics and other topics in working to solve matters that volley off another. Economics is a subject with value and importance that everyone should learn the basics if anything in school. Alongside history, economics has a huge part to play with the financial history of the United States, whereas something as basic as supply and demand should be taught. Because supply and demand are interdependent of one another when consumers want goods and services (supply) consumers will go to buy these goods and services. If you as the producer want to keep your clientele, then you have a little extra work to do. Make sure you have excellent customer service. Lenient return policy. If you have a small amount of stock, advertise it as “limited supply”, and “while supplies last.” This will appeal to buyers eager to get ahold of hard-to-find items, and they will pay for it too. Use advertising to market your sales, and upcoming items, even if you do not actually have them in stock yet.