Sunday, March 13, 2011

The Dairy Budget!

Finally i got the interview of the shopkeeper. The article based on his interview follows:-

How much do you think would be a shopkeeper having a milk dairy, earning? We know that the prices of milk are continuously rising. So it can be a profitable business! Or is it not? The answers to these questions are not as simple as we think. I got to learn this from the shopkeeper named Mr. Milind Mangesh Parulekar. He has a dairy shop in Dombivli named Swastik Dairy. It was started by his father in 1988. When started, it was just a dairy where they used to sell only milk and curd. But now, bread, butter, biscuits, chocolates are available as Swastik  Dairy and it has become a general store too. He even has mobile recharge of every available service provider.
What made Mr. Parulekar increase no.of items in the shop? Yes, the increasing demand is the right answer. As the area around the store started flourishing, Parulekar father-son recognized the need of the people and started providing them with basic eateries.
As the items increased, business increased, income also increased but along with that inflation increased too. So apart from demand it became a need of the family to earn more. Earlier, the milk used to come from Chalisgaon. There were no private companies. The government used to supply milk. Also he used to buy milk from 'Arey'. Then as private companies entered the market, he started buying milk from private companies. Now he gets the milk from Vashi and Bhiwandi.
When talking about the income from milk, he said, milk business is very much risky. Today he buys 150 litres of milk everyday. Out of 150, 70 litres is delivered to households directly. And remaining 80 litres of milk is kept in the store. He says everyday the dealer comes at about 7-8pm to take money. Everyday he has to pay Rs. 4500. He has a delivery boy who delivers 30 litres of milk. Remaining 40 litres is delivered by himself before coming to the store. The people who get the home delivery, pay him the complete amount once in a month and he has to pay the dealer everyday, so he says for about 30-40 days he has pay all the money from his pockets. Then between 1st and 10th of every month he gets the money back from the households. The other 80 litres that he keeps at store should also get sold. If they don't the dealer don't replace them or take them back. Mr. Milind has to pay for the left out and also take all the milk home or just throw it away if it gets spoiled. So there is a loss if the milk doesn't get sold. Also he has to pay to the delivery boy. He says that if the boy keeps the milk outside some-one's house and rings the bell and goes away and if nobody in the house hears the bell, then there is a possibility that some outsider might pickup the milk and go away. Then the customer comes to Mr. Milind complaining that we didnt get the milk, the boy says he put and rang the bell, so this is again the loss. When asked about his margin in milk business, he says, we get Rs.1.50 behind every litre. It is very less.
The prices of milk are continuously rising. When asked about its effect, he said, when prices rise, for 2-3 days  the customers are less but then again their number increases because even though the prices rise people need milk. But even if the prices rise we don't get much profit.
He narrated an incident. He was delivering the milk when he came to know that his uncle expired, still he had to complete his round, make someone sit at the store and then leave. He says, its a daily business and he cannot give any excuse. But he doesn't want to quit it because its going on since 22 years. He says, its not all that bad. There are many other items that he sells and gains good profit out of it. Other items are replaceable. The mobile recharge is a profitable business where he gets Rs.25 on recharge of Rs.1000.
Overall his GDP remains steady. There is no fiscal deficit but fiscal 'profit'! Hence he lives a nice life and though he shuts the shop every-night at 10pm, in the morning it gets closed before 12noon everyday when others start theirs'!

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