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Easter Gate Scientific - Essay Example

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During the period 2004 to 2005 when Easter Gate Scientific Supplies Inc. was not selling its goods directly to its customers its sales increased only by 30.01% while for the period of 2005 to 2006, when it used the Internet to sell and send the goods directly to its customers rather than deal through retailers or wholesalers on a commission basis, its sales increased by an astounding 72.36%…
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Period: 2004 to 2005 Period: 2005 to 2006 $Million $Million Net sales 867-1436 = 431 30.01% increase 3,218-1867 = 1351 72.36% increase Costof sales
1,364-1049 = 315
30.02% increase
2,350-1364= 986
72.29% increase
Selling, distribution and administration
410 - 305= 105
34.43% increase
706 - 410 = 296
72.20% increase
Gross Profit
503 -387 = 116
29% increase
868 - 503 = 365
72.56% increase
During the period 2004 to 2005 when Easter Gate Scientific Supplies Inc. was not selling its goods directly to its customers its sales increased only by 30.01% while for the period of 2005 to 2006, when it used the Internet to sell and send the goods directly to its customers rather than deal through retailers or wholesalers on a commission basis, its sales increased by an astounding 72.36%. This the net sales more than doubled within one year from 30.01% to 72.36%. This is also due to the fact that now, because of the Internet, Easter Gate could target customers which it was previously unable to reach.
Due to the fact that Easter Gate operates operates on a high volume of turnover and low profit margin the increase of sales translated into an increase of 72.56%, in one year!
We already know that, direct suppliers (via the internet and/or catalogues) control 45% of the market. Thus one of the main advantages of having goods sent directly to the customers is the increase in the market share of Easter Gate.
Easter Gate, being a well-established and financed company could easily capture the 45% of the market share currently held by miscellaneous traders.
Also, Easter Gates gross profit has increased from 29% for the period of 2004 to 2005 to 72.56% for the period of 2005 to 2006, these are the various examples of dealing directly with the customers. Read More
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