Opportunities In Uncertain Times
IS IT SAFER IN THE BANK?
I dont know, trying to understand what is happening in the financial markets is like backing the winner of a "bum kicking contest" where both contestants have only one leg! I am not making light of the situation. Uncontrolled greed has caused millions of hard working people see their "nest eggs" shrink to a pittance.
However, I am sure that you have all heard the saying "every cloud has a silver lining". In today's uncertain economic climate there are still opportunities where the "astute business person" can maximise their returns from their business.
Expect increased product costs in the immediate and mid term because:
- Overseas suppliers are selling less and getting less for their products due to the world financial crisis and will be forced to increase prices.
- Raw materials such as plastics, toners and oil based ink and toner substrates have already seen increased prices and there is more to come.
- Local wholesalers will have to pay substantially more for imported product.
- Transport charges have increased due to the US$, oil prices and levies.
- World trade has shrunk therefore transport options have decreased due to providers like the shipping companies reduced sailings which means fewer ships which results in higher charges for preferential treatment.
Q. What does it all mean?
A. Substantial increases in landed costs for all products.
Q. Where's the "silver lining"?
A1. GOOD NEWS. OEM's will be forced to increase their prices which is great news for remanufacturers of inkjet and laser cartridges. Customers will certainly start looking for viable alternative options. There is a case for the remanufacturer/retailer to increase prices. Even though the prices for remanufacturers raw materials will increase the case for local remanufacturing has never been stronger. The price differential between locally remanufactured cartridges and imported OEM should be substantial as the A$ (if the pundits are to be believed) is not expected to go over $0.70 in 2009. If the RBA reduces the money rate by a further 200 points the A$ will trade even lower than it is today which means even further price hikes on imported goods.
A2. GOOD NEWS. Astute operators will be buying as much stock as they can afford to from their suppliers right now because they know that as soon as a supplier's inventory runs out, his next overseas shipment's landed costs could be substantially increased by as much as 20-30%! From a trading perspective the "astute operator" that takes action now stands to gain as much as 20-30% increases to his future bottom line! Beats hiding it under the mattress or betting on a bum kicking contest!
In these uncertain times there are not too many opportunities to make sound investments (in a business that you know and control) that give such substantial additional returns.
AUSJET SAVING YOU TIME-SAVING YOU MONEY-PUTTING YOU FIRST.
