Introduction of credit worthiness model to increase sales by Yakub Khan

Existing Sales for Developing / Developed Companies

     The measurement to define the success of company lies in the numbers of SALES. Sales are like a life for a company which runs the whole operations. Under the developed or developing companies sales happen in the scenario of direct sales factor,  point of sales, retail sales, wholesale sales and so on.

Introduction of creditworthiness to increase sales

     This is one of the major factors that will boost the sales by introducing credit sales to individuals or customers. Though the company via having credit sales to intercompany or the high network individuals as they are sure to get returns on credit sales. But does it means the limitation and the definition of credit are limited with in these borders. Whereas there is much more scope in it.

When to introduce creditworthiness sales

Discount Factor

     Giving discounts is the present mechanism of the companies in order to sell the stock with the above conditions. Whereas even beside introduction of discount factor, sometimes companies don’t reach to their target or end up with the stock in warehouse.

Credit Sales Process & Impacts

Measurement of Creditworthiness on Customer Basis

       In order to measure creditworthiness of the customer it should follow a mechanism of the credit plan risk in order to avoid losses instead of calling it as “BAD DEBTS” in future.

Conditions to apply credit sales

1. A customer who is membership holder via voucher’s or membership card should have more than so and so points under his card to avail the credit sales as a privileged customer.
2. A credit sale is not for all, it is for privileged customers who are the membership card holder with highest buying power based upon the history of their buying power.

 Advantages of the model

1. An esteem customer during his hard times somehow unexpectedly running short of buying cash power, he can use the credit facility of the buying power.
2. Customer happy and avail the facility
3. With this model the stock moves into market and hands into hands
4. Credit sales increases the movement of stock lying under warehouse
5. Credit sales increase the product movement in the market and people will know more about the products and its features.
6. A movement of underperforming stock will not make that much difference for the company.

 Disadvantage of the model

1. If there is no mechanism of the credit limit and it will create bad debts in future.
2. The credit sales have to be limited only to the underperforming or underlying stocks only.
3. Model applies only to the limitations