Supply and demand, What’s it mean for your business?

By Oleg Mikhailenko
Published in Solutions
April 13, 2022
2 min read
Supply and demand, What’s it mean for your business?

Many of us learn about supply and demand in our 5th grade social studies class, but for those of us who didn’t, or those of us who could use a reminder (seriously, who remembers what they were doing in 5th grade anyway?), it never hurts to read it all again. First off, what is supply and demand, and how does it apply to your business? A definition of supply and demand that’s more simple is that it’s the balance between the amount of goods and services available (the “supply” part) and how many people want to purchase them (the “demand” part). The dance between these two says a lot about the health of your business and where you could stand to pay a bit of extra attention.

For instance, if you have a lot of inventory but few people to purchase your products, you’re left paying for the storage of all those goods and losing money (a lot of money, in the long run) over time. You might consider tweaking your marketing strategy or even transitioning to a dropshipping model until your customer base grows larger to avoid financial issues later on down the line.

On the other hand, if a ton of people are clamoring for your products but you barely have anything in terms of supply, that’s no good either. Customers might become frustrated and lose interest in the time it takes you to source additional merchandise, and all the demand in the world means nothing to your bottom line if you don’t have the products to sell.

As a rule, it’s ideal to have a relative balance between supply and demand, although you definitely have the option to skew more on the inventory side if you want to have a bit of a backlog or a bit towards the exclusivity side if you want your products to feel special and if you’d like to make a bit more profit. It’s possible to do all these calculations by hand, but in this day and age there’s no need for anyone but economists to put themselves through such trouble.

You might be wondering how you would even get accurate information about your inventory levels and how many customers would like your product. Luckily, P2Pseller has your back. We offer a number of key integrations and built-in software tools to let you measure and track stock levels, customer demand, and more, so you’re able to sell more and grow your business over time. Make a free account with P2Pseller today in order to browse our offerings and see how we can benefit you.


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