I have to pay the vendors somehow. I have to sell products anyhow so that I can get the money and pay that money to the vendors. I can't focus on selling only one product. If I decide to sell perfume bottles only and use the money from selling these bottles to pay the vendors, then I would have to close down my shop. No vendor will wait for me to sell the products and then pay them. If I do that, my relationship with the vendors will turn sour. So, I have to sell the products somehow in order to pay the vendors and maintain a good relationship with them.
With the introduction of these payment apps, making payments has become much safer and more secure. Now people don't have to carry cash with them; they can make payments through apps like GPay or PhonePe. When it comes to the vendors and salesmen who come to my shop, they make payments to me through GPay if they don't have any cash. So, I do use these payment apps frequently for business purposes.
Online payment is also there with my vendor but I don’t take credit from them. Everything is to be bought after payment only.
No, the payment to the wholesalers is always done later. Wholesalers who have fixed rates cannot be bargained with. They have a fixed rate for everything. They give the same rate to all their customers.
Wholesalers provide a bill for the total amount. We conduct business for a month and then pay them in cash or by cheque, depending on the date. We have a 30-day timeframe. If I go to the village, the payment will be delayed as there is no one to make the payment in my absence. I have to make adjustments once I return. I mostly give cheques and do not use Google Pay or PhonePe as I am not familiar with them and there is a risk of the payment going to the wrong people. I have been cheated once before when a customer claimed to have paid 1180 but I did not receive the money. It turned out that the customer did not have enough balance, and I received a message regarding the same. Therefore, I do not use it. I had a negative experience with it in the past. Now, I know how to check the payments from customers. I confirm whether the money has been credited to my account before delivering the items.
Yes, I note down daily sales and the amount that I need to pay at the place where I purchase items. I buy items on credit from vendors. Yes, I need to maintain an account of payments with vendors. Otherwise, I would not get to know the transactions. Customer sales are noted on paper, whether it's the sale of a day. Then I make payment to the vendor. I have a single notebook for both.
I have many vendors. I have around 6-7 vendors. One vendor is for 'chandan' (sandalwood), one is for ghee. There is a separate vendor for 'maala' and another separate vendor for utensils, God's bowls, 'ghanti', and 'deepak'. For Diwali and Dussehra, those vendors come from Delhi. I found the vendors in Delhi while traveling. I go by train. A vendor asked me to go to Delhi, saying that I would get a better rate there. How did you come to Allahabad, Prayagraj, from Bangalore? I got to know about the Delhi vendors through other vendors. Sometimes I get to know through apps like Google, but it does not refer to the proper vendor. I need to find him personally. Some items are available in Gandhinagar. It will be for us. If I get the same rates in Delhi and here, I purchase the material from here. I do not run here and there. I buy everything from Prayagraj. I have a small-scale business. I go to Delhi just during Diwali. Everything is available in Prayagraj itself. Yes, God's idols made from clay are delivered here, so I sell them. I pay the purchase rate and divide the profit I get. The supplier comes here. I tell the supplier 1 month prior that I want these many god's idol pieces. He asks me if I need 20-50 pieces. I ordered 30 pieces and all these pieces got sold. Then I would order again. I would make payment for the 30 pieces that got sold.
I build trust with vendors by making timely transactions. If I have purchased something, I make its payment immediately. The vendor asks to pay cash in 3 installments. If you make the payment properly, the vendor asks you to make the payment next time. Then the vendor gets to know that your shop is located there. They get to know based on your quality, whether you are suitable. All vendors cooperate, so they say that better rates, quality, and better materials will be available at their shop.
I make immediate payment to vendors. I purchase materials based on the amount I have. I neither pay in advance nor accept advance payment. If I have Rs.2,000, I purchase materials of the same amount. I create the list accordingly. I know that I only want to buy these specific items because I only have this much money. I don't want to buy anything extra or give anything extra. Yes, it is a quick decision to pay the vendor right then and there. If we have had a long-standing relationship, I will take the materials without making the payment, but the following week the payment will be cleared.
There has been a positive change when I started using UPI. If I have to pay any vendor, I can do it using my mobile. If someone asks for help with money, we can tell them that we don't have it, as everything is being done through mobile. Technology has helped me.
In both cases, I will keep both. But if I keep it, it's Vendor. I will keep it on the third. Because the vendor is also important. It is also important to maintain a relationship with the vendor. A relationship with the vendor means assuming that I am continuously dealing with them for a particular product. The major vendor for me is a regular vendor, almost daily or 2-3 times a week, continuously. So, how much do I have to deal with the amount of payment I have to pay? For example, if they ask for a payment of 30 days or 60 days, then it doesn't mean that I always have to pay in 30 days. If I have a trial, there is a plus or minus. So, I have to deal with that. So, I am talking about that relationship. Yes, it's a trust-based relationship. With new vendors, there is some advance payment in the beginning. Or we tell them that if there is any specific guarantor or if we feel so. Rest, we deal with new vendors in cash. We get orders on a mass basis.
There is a huge difference when it comes to making manual bills and using technology. One is you are saving on time. You get real data immediately about your stock. If you do manual entries, you would not know about inventory in the godowns. But here on Tally with one click I would have real time data. I would know what products I need to order. It also has payment option, I have linked it directly with my bank. Customers can also make payments online. It has many benefits. It saves time. If you do manual entry and turn on so many pages, it’s a hassle. However, in Tally, I would immediately know which product sold the most or which is not selling or which product is getting old and not sold or fast moving products. It will show your entire business activity.
Vendors... The company representatives come to us voluntarily. They come and request the order, and I provide them with the order. After that, they deliver the supplies to our shop. They offer doorstep service. This is similar to how other branded companies operate. They have salespeople who visit us on specific days. For example, someone from Havells comes on Mondays, and someone from RR comes on Tuesdays. They all come and inform us about their offers, and if I like it, they take the order and leave. The order is delivered the next day. If there is a local product, the local vendor also comes to deliver it. All the vendors come to our shop; I don't have to go anywhere. All the vendors are reliable. If there is an emergency, I call them, and they come. I don't have to go anywhere. Generally, I deal with branded companies. All of them have their own employees who take the orders and deliver them to our doorstep. They also send someone to collect the payment, so I don't have to go or come anywhere.
Yes. All of the options I use. After payment is done I share it with sales person. Sales person will share it with the office ….with the party. Share option is there if you have see…
Yes, I return it and the company people deduct it from my account. I make payments via cheque or cash.
I already told you, we don't get any credit period. We just get a site. For example, if I bring the material today, then I can give them a cheque and it will be cleared in 8 to 15 days. Only that much. Some vendors ask for eight days, and some ask for a cheque or cash. Now everyone is asking for cash.
One day the business is good, the other day it's not. The major challenge is the managing cash. If there is a shortage in cash collection, “rotation” will stop. We aim to give an certain amount to a number of people every day. Some days if there is not much sales, we cannot give them. When we buy things from a vendor, we get 15 days time. We have to pay them twice a week. When we purchase some items, we make payment. They come on that day and we have to pay them.
Online payment is very rare. Some vendors are giving the facility now but for the most part, it is cash and carry. If we have cash, we have the courage to buy. They don’t prefer online payment and I don’t either. I'll go and give the cash and finish the transactions. I will go and pick myself. One or two boxes only, because if we arrange for transportation, it will be costly.
Wherever I go, particularly in Chennai, we could buy things only after paying the cash upfront. There is no credit in Chennai. They will give us the collection and we will take whatever we want. If they show 1000 items we are going to choose 10. We will take whatever we need and which is not there. When we purchased it for the first time, we purchased everything. There was a lot of waste and also sales. It took me 2-3 years to understand this.
I send my kid to the bank to deposit the money and then I make the payment to the parties.
I simply select the items I want and leave them at the store. Then, I pay the amount on Google Pay or in cash. That's all. Yes, the people at the market know me by name. We have been in contact for many years, so they give me their phone number. I have to personally pick out the jewelry and toys. It can be costly. I own many bangles. At least 250,000 rupees worth.
Transaction with vendors is in cash. We can even do it online.
Vendors give us monthly stock of 20-25,000/- and write in the diary and take payment from us. It becomes easy for everybody as everything is written down properly here.
Yes I have swipe machine. It is of HDFC, of Canara and of ICICI.
I call and inform them on WhatsApp that these goods are required. They send the sample. They create a bill and send us the bill on WhatsApp. I send them the payment amount on PhonePe. Sometimes I also make purchases on credit. Later, I pay off the credit and they send me the goods by transport. This process continues in this manner. Now, if I order any unique product, then I have to go there. If they call me to see some new and unique items, in that case, I also visit their place and choose the color and items. Both my wife and I like to see and touch the product before ordering because if I like it, the customer will also like it. I think in that way. That's why I handle everything on my own.
Vendors give me products on credit. Suppose I purchase goods worth 50K. I will pay him 40K or 45K. 5K is on credit. I send that credit amount to him on PhonePe after 7 days.
Yes. I use this notebook roughly. I write down what people buy so that I can maintain the stock. Then we note how much we have to spend daily. I write the credit of customers in another notebook. I also write the names of customers. For example, if anyone takes a product worth 500 on credit, I write it in that notebook. I write everything here. If I get someone's phone number, I write it here. I write how much I could sell daily. I write what I told to whom. Some company people provide products here, so I have to make their payment weekly. I keep daily calculations on it. I save the numbers on my mobile. On the due copy, I write "due" and on the sale copy, I write "sale."
I keep an account of the dues. They are simply slips of paper and we try to pay them back as quickly as possible. We don't really write down small amounts that often.
Distributors prefer cash, and they told me that they have accepted UPI payments in the past. However, they don't know how to confirm that with the distributor. If they receive cash, they can directly hand over the money to the distributor. The boys who come to us from the distributor cannot inspect the money that is with the distributor himself, so they prefer taking the payment in cash from us. This is why I prefer taking cash, even if it is only 4000 or 5000. If I receive UPI payments in large numbers, I will have part of the money in cash and part of it in online transactions, which will divide my total available amount. I will not have the entire amount in one format. For example, if I have only 200 in cash and 400 in online transactions, I will not be able to make a purchase of 600 if I want to. However, if I have the entire amount in cash, then I can!
I don't want to go and source products from anywhere else because I have been doing business with that distributor for a long time. I would like to continue working with them. Although I tried switching to online, I realized that my business wasn't performing as well. I want to return to the distributor who supported me when I had no money. The other distributor will not provide me with that benefit because they only understand the language of money. They will only provide me with products if I pay, and if I don't, they won't! Why should I go back to them? I will work with the person who helps me, and that's why I prefer cash transactions. I want to go back to the person I have benefited from in the past. I have been running my shop for 12 years, and online transactions only started 4 years ago. But I was doing business with someone before that, and how can I leave them and switch to another style of doing business just because of online transactions! Everybody does not have the same kind of thinking and I would like to follow my own instinct and do business with the person with whom I am more comfortable and whom I find more reliable.
There are few distributors, of course, who do online transactions. If I am doing business with somebody and he does not do online business, I might have to change to another distributor, which I don't want to do. I want to buy the products from a particular distributor because it's a business understanding. If I go somewhere else, I will be at a loss, and there is no specific reason for that. This is the manner in which we transact. The basic reason is that there is an issue with the Google pay the distributors, and we cannot pay them in any other way but cash because they refused to take online payments. I would like to take products from him, and even if I have money in the bank, I will not be able to take it on this. I have cash.
I only use Paytm. That was the first payment method I started using, and after that, there are many others like Google Pay. Of course, there are also many other UPI payment methods, but I don't want to use anything else. I tell my customers that I will not be accepting any other payment methods. It's a small city where cash transactions are more common, and in larger cities, it is possible to use other methods. Even distributors prefer cash in their hands and do not accept online payments. They don't take online payments, and small distributors prefer cash because they also have to make payments. So, we prefer to work with cash, whether it's 50 or 200 rupees or whatever amount - we want it in cash. If I have to buy something, then I will have to pay in cash, and not everyone here accepts UPI.
I manage credit with vendors like I told you that they write it down and then pay it off via small microfinance loans. I pay off the loans one by one. I have to pay off the vendors before I take the next batch of goods. I get a certain credit period from them, so I make my purchases there. They provide the goods even if I don't have cash with me. I get the goods on credit and give them cash when I receive it. I might make a partial payment. for example, I take goods for 50k and give them only 10k. They provide me credit for about 40k. Then I take a microfinance loan and clear their funds. That way, I might get more goods. perhaps 1 lakh more. I write my inventory down in a book. I write down how much I owe, the goods I have and so on and so forth.
Not all of the vendors offer credit. Only saris are available on credit. The rest are for cash. I may record the cash amount given. If it is 30k, I may pay 20k in cash and the remaining amount through PhonePe. I may make a note of that. PhonePe and Google Pay. I use them both.
Vendors call on WhatsApp and send reminders about the payments. If I am at the market for any purchases, I pay them at that time.
There are certain items for which, if they supply the products now, we have to pay them in a week's time. For some, we have to make spot payments. Masala items may require spot payment. However, for items like oil, we can pay by the next week.
If it's a Tuesday, we know that this particular supplier will be there for the collection. So, if there is Rs 5000/- to be collected and I have not had that much of sales, then I would just pay 1/4th of the amount and tell them that I will pay the remaining next week. For the next person, I will divide the money accordingly and keep.
If the vendor gives 5% discount means, the payment will have to be made within a week. I will pay in GPay or pay in account. He will send his account number. I go to the bank and transfer money in his account.