My First Sales Lesson

I decided to try out my first sales stunt after I read this quote by Naval Ravikant that said:

Learn to build or sell. If you know both, you are unstoppable.

And, I failed miserably to sell!

Context

• A 22-year-old introvert with no previous experience in selling.
• Decided to sell organically farmed "Lemons" that grew in my backyard.
• Harvested around 150 lemons (approximately 5 kilograms).
• Demand for lemons during winter is not so good.
• Prices for lemons range from "3 lemons @ INR 10" to "5 lemons @ INR 10"
• Sold to end consumers via a retail grocery shop with a cut in the profit.

What did I do?

Removed all the bad/spoiled ones, since they cannot be sold.

Sorted the lemons according to their sizes & quality (small, big, and spoiled), assuming that, the larger the fruit, the greater the price it can sell.

Took 2 bags (small and big-sized fruits of each 60) of lemons to a retail grocery shop at a nearby market.

I was told to come back the next day to cash them out since all the goods for the day had already been purchased, hence my lemons will not be used for the day's sale.

The next day I was handed over INR 150 and was told that no sale of my lemons was made yet and was told that the demand for lemons was not so good, hence they were sold at a lower price.

In the market, lemons are sold at an average price of "4 @ INR 10". While I sold them for "8 @ INR 10" with almost 50% loss on the sale. I should have been paid at least INR 300 (got paid only 150) for 120 lemons.

I didn't realize that until I got back home. Wasn't quick with my math!

Where did I go wrong?

Validate the assumptions

Assumed that bigger lemons would fetch me more profits. But, I did not validate the idea by talking to other vendors in the market.

While some small vendors sold fruits solely based on the count of fruits (considering quality and size), others simply weighed them and decided the price.

Understand the existing sale process and reach out to as many people to understand the product.

Be quick with math

Had I compared the rates with the markets immediately, I could have negotiated for more profit (at least matching the market rates).

There's no re-negotiation once the sale is done.

Equip with math skills to negotiate.

Make room to negotiate

I shouldn't have accepted INR 150. I should have questioned the existing lemon prices in the market, talked about the quality of the lemon that I'm selling, and created enough pointers that would lead me to negotiate for an even better price.

Even if you are satisfied with the deal, just negotiate.

Bad timing

Approaching the retail grocery shop on a Monday morning during the peak hour of their sale is the wrong time to sell something. Having purchased the necessary goods for the day, they wouldn't be willing to purchase more, unless the sale puts more money in their pocket.

Understanding the supply and demand of the product would help us get an upper hand in deciding the prices.

Sales doesn't work 24 x 7. The sale of a product works only on timing the market.

Avoid middlemen

Had I sold the lemons directly to the end consumers, I could have saved all the middlemen's commission and increased my profits.

Cost of a product inflates before it reaches the end consumer from the manufacturer due to the middlemen. Avoiding them can lead to an increase in profit margins.

(January 10, 2023)

• Sold 120 lemons @ 1.25 rupees each - Made 150 rupees

P.S: (January 19, 2023)

• Sold 20 lemons @ 1.5 rupees each - Made 30 rupees
• Sold them to a fast-food restaurant

P.P.S: (January 24, 2023)

• Sold 30 lemons @ 1.67 rupees each - Made 50 rupees
• Sold them to a grocery shop at the supermarket