Welcome to Sridhar’s newsletter number # 38 & Podcast (Click Play button for Audio version of the Post). Appreciate you being here, so we can connect weekly on interesting topics. Add your email id here to get this directly to your inbox.
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This weekly newsletter is mostly about the article, books, videos etc. I read or watch or my views on different topics which revolves around my head during the week. Now, let us dive into this week’s reads.
1. Retail giants vs Suppliers - Impact to End Consumer
Retail giants are taking a hard line with suppliers, pushing back on price raises that have become commonplace in the industry. Walmart is leading the way; last month its CEO told Sam's Club suppliers he would fight attempts to pass price hikes onto retailers, The Wall Street Journal reports, citing anonymous sources. Walmart has previously issued tough edicts to suppliers, threatening not to stock their products over price hikes. Chains like Target and Amazon have made similar moves, asking suppliers for discounts — as a tight labor market, high inflation and an inventory glut weigh on suppliers and retailers.
That is really a conundrum when the buyer has so much power/clout. Seller’s wallet share of Walmart purchase is in low single digit to very best mid double digit. So in my view its more of walmart’s buying power vs. supplier’s ability to price appropriately. This is just an observation but how do we counter such a push from walmart is altogether a different question and conundrum to me - Accept it as market structure/market constraints or plan taking the above push from Walmart as given variable in business planning.
Consumers are 70% of the US economy. Consumer goods channels are now seeing: the “fastest boomerang (power) back to customers ever seen”. Most of the remaining B2B economy will follow. Retail is always a tough business but it's especially tough in an economic downturn. Walmart, Amazon and Target are all working to push more of the downward margin pressure back on their suppliers.
"Large retailers are canceling orders, resisting price increases and in some cases asking suppliers to provide discounts. This puts pressure on product makers that are struggling to adapt to shifting consumer demand."
While it wasn't a macro economic event we saw that same thing happening during the initial phases of the trade war with China. Manufacturers got squeezed by their retail customers and were able to muddle through by pushing back on their suppliers in turn, and in some cases cutting into what little product margin they had.
So far this has felt similar, but with the added pressure of an anticipated slowdown in consumer demand. I expect this Q4 and next year to be tough, and for manufacturer's to have to work especially hard to maintain a profitable and sustainable business.
2. Be Resilient for your New Year Resolution
Few Notes from the book “ The Difference ”, Specially the topic of increasing your Resilience Quotient hit a note, which I thought of sharing with the group, specially near year resolutions on the way. This short list is going to help you increase your resilience quotient to keep your new year goal and meet.
Ask yourself one question, Do i have to change or does someone else have to change for me to succeed at my goal ?
Do Something. It may be wrong thing, but it is okay, you will do something else latter. Take small actionable steps towards your goal
Take a Break. This is opposite of #2. If you are working on something which is not going anywhere, Take a break. Rest to get your focus back.
Find a Cheerleader. When you share your goal with others, their is 50% chance of success. You are not looking for someone who can push the same mountain as you are pushing. You are looking for someone who can believe in you and keep a check on you every few months about your journey.
Emphasize the Positive. Be Optimistic. Recognize the good stuff that happens to you each day.
Be Realistic toward your goal.
Silence your Internal Critics. This is our own harsh internal radio that keeps on playing in our head about negativity over and over again and makes it difficult to reach our goals. Don’t let it push you, rather listen to it, listen to all the Questions its raising. From your last one week of work, Look for one good achievement or work which you have done toward your goal. Come up with one good reason , a solid reason which can allow your brain to overcome those internal critics off, so which can remind your #1, why you are doing this.
Get Rid of Distractions. This is E-Mail, TV watching, Chatting, Social media mindless browsing, Internet. Get rid of distractions so you have your focus towards your goal.
Be Resilient.
That is all for this week. See you again.
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