Buying a big pack and selling it loose

Work out what a kilo actually costs you after the sack has lost weight, spilled a little, and swallowed a pouch and ten minutes of somebody's day. That number, not the sack price divided by fifty, is what your loose rate stands on. Then price the small pack dearer per kilo, on purpose.

The sack costs Rs 9,000. A kilo does not cost Rs 180

Ten past eight in the morning, before the school rush. You cut the corner off a new rice sack and Bilal, your helper, tips the first pan onto the scale. The market bill says Rs 9,000 for 50 kg, so the sum everybody does in their head is Rs 180 a kilo, sell at Rs 210, keep Rs 30. Fifty kilos, Rs 1,500 in the box.

That sum is wrong before the first customer walks in, and wrong in the same direction every time: kind to you on paper, quiet about what the box will hold. Here is the honest version, line by line. Follow it with a pencil.

Say you buy a 50 kg rice sack for Rs 9,000 and sell it by the kilo

One 50 kg sack, straight off the market billRs 9,000

Cost per kilo on paper: 9,000 divided by 50Rs 180 a kilo

Your own scale reads 49.4 kg, not 50600 g short

Dust and spill left at the bottom of the sack300 g short

The generous hand: a small extra on about 70 sales500 g short

What is actually left to sell48.6 kg

Pouches, tape and labels for the whole sackRs 150

One hour of packing, at Rs 100 an hourRs 100

True cost of the sack, packed and on the shelfRs 9,250

True cost per sellable kilo: 9,250 divided by 48.6Rs 190 a kilo

Your shelf rateRs 210 a kilo

Honest margin: 210 less 190Rs 20 a kilo

The whole sack sold: 48.6 kg at Rs 210Rs 10,206

What the sack really put in your hand, against the Rs 1,500 the paper sum promisedRs 956

Made-up figures, chosen to show the shape of the sum. Weigh your own sack, count your own pouches, and the lines will be the same even when the amounts are not.

Rs 956 on a sack you believed was paying Rs 1,500. Nothing was stolen and nobody cheated you. The difference happened between the market and the shelf, in grams and pouches and minutes, and none of it was written down.

That is why this trade gets priced by guesswork. The buy rate lives on a sack and the sell rate on a kilo, and the two never sit on the same page, so the shopkeeper charges what the man across the road charges, who is copying somebody else.

The four leaks between the sack and the shelf

Four things eat the gap between Rs 180 and Rs 190. Each is small enough to wave away, which is why together they cost real money.

The first is weight. A 50 kg sack is a label, not a measurement. Put the bag on your own scale the day it lands and write what it really says, in pencil, on the sack. Dry goods also give up moisture in a warm shop, so a bag reading 49.4 kg is not going to grow. Six hundred grams at your Rs 210 rate is Rs 126 of sales that were never there.

The second is what stays behind: grain that jumps off the pan, dust at the bottom, powder clinging inside the tin. Call it 300 g on rice, more on anything ground. Another Rs 63 you will never ring up.

The third is packing material, and nobody counts it because a pouch costs almost nothing. Seventy pouches, a roll of tape and a strip of labels came to Rs 150 on this sack. Not nothing, when it was only going to earn Rs 1,500.

The fourth is the generous hand, and nobody admits this one. The needle settles on one kilo and you tip in one more scoop, because the customer is watching and a mean-looking pan loses a regular. Eight grams a sale sounds like air. Seventy sales later it is half a kilo, Rs 105 gone.

Add them: Rs 126, Rs 63, Rs 150 and Rs 105 is Rs 444. Same arithmetic as stock going missing when nobody knows how, except nothing has gone missing. It left in grams.

The hour nobody pays for

Weighing, scooping, tying, taping and writing a label is work, and work is somebody's time. Bilal starts at nine and shuts down at seven. Ten hours for Rs 1,000 makes his hour worth Rs 100.

Now put a clock on the sack. Seventy pouches filled, sealed and stacked is an hour of a morning, near enough. That Rs 100 belongs on the sack, and it is the last line of the true cost.

You may not pay yourself for that hour, and that is fine. Count it anyway. An hour a day is thirty hours a month, Rs 3,000 poured into pouches. Once you see the figure you ask the right question: is that hour better spent at the front of the shop or the back? The answer decides whether you pack in the morning or weigh when he asks.

Pre-packed pouches or weigh it when he asks

Twenty to seven in the evening, the hour when everybody buys at once. Three people are waiting. Nasreen wants Rs 50 of red chilli powder, so you fetch the tin, scoop, watch the needle, tip a little back, tie the pouch, tape it. Ninety seconds. Behind her a man holding a basket worth Rs 900 sets it on the sugar sacks and walks out, because he is not queuing for a pouch of chilli.

Those ninety seconds cost Rs 900, and will cost it again.

Pack it in the morning, or weigh it when he asks

Pre-packed pouchesWeighed on demand

Time at the counterPre-packed pouchesTen seconds: he picks it up and paysWeighed on demandA minute or more, with a queue building behind him

Weight you give awayPre-packed pouchesGiven once, at packing time, and then fixedWeighed on demandA small extra on every single sale, all day

Pouches and tapePre-packed pouchesPaid for before it sells, even on stock that sitsWeighed on demandPaid for only when something actually sells

A slow linePre-packed pouchesPouches go stale or damp and get opened againWeighed on demandNothing spoils just because it waited

What the customer seesPre-packed pouchesA neat sealed pouch, but he takes your weight on trustWeighed on demandThe needle in front of him, which ends every argument

Sales you did not expectPre-packed pouchesHe picks up a Rs 50 pouch he never came forWeighed on demandHe asks only for what he walked in to buy

Odd amountsPre-packed pouchesOnly the sizes you decided to packWeighed on demandAnything he asks for, down to Rs 30

Counting at closing timePre-packed pouchesEasy: count the pouches on the rackWeighed on demandHarder: an open sack and an estimate

Both ways are right, on different lines. Pre-packing wins on speed at the rush, and on the generous hand: fill fifty pouches on a quiet morning and your hand is generous once, at the scale, not fifty times at the counter. It also sells things nobody came for. A Rs 50 pouch by the till gets picked up; a weighed order has to be asked for out loud.

Weighing on demand wins everywhere else. Nothing goes stale in a pouch packed for a customer who never came. No pouch is bought for stock that has not sold. Any odd amount is possible, and the man who watches the needle never argues about the weight.

So split it. Pre-pack the fast lines, in the sizes people ask for, and only enough for the rush you know is coming. Weigh the slow ones. If a pouch has to be cut open and tipped back, you packed the wrong line.

Why the small pack costs more a kilo, and why that is fair

A quarter kilo at Rs 60 works out at Rs 240 a kilo when the kilo on the same shelf is Rs 210. Some shopkeepers feel shifty about that, shave the small pack, and lose the earnings the whole sack was meant to make. There is nothing to feel shifty about.

You carried the sack: somebody paid Rs 9,000 in one go and hauled fifty kilos from the market, and that somebody was you. You took the risk of the whole sack, so if it turns damp, or the rate falls, or the last eight kilos go stale, the loss is yours alone and the quarter-kilo buyer carries none of it. You packed it, and the pouch, the tape and the minute fall harder on the small pack than on the kilo.

And you let a man buy a quarter kilo when he has Rs 60 in his pocket. That is the whole point of breaking a sack. Without you his choice was a kilo he cannot afford or going home empty. The small pack rate is what makes that possible. It is a service, not a trick.

The rate ladder: kilo, quarter kilo, Rs 50 pouch

Once you know the true cost you can build the ladder, and it has one law: the smaller the pack, the dearer the kilo.

Say the true cost is Rs 190 a kilo. What each pack size has to fetch

One kilo, weighed at the counterRs 210, so Rs 210 a kilo

One kilo, already packed in a pouchRs 215, so Rs 215 a kilo

A quarter-kilo pouchRs 60, so Rs 240 a kilo

A 200 g pouch at a round priceRs 50, so Rs 250 a kilo

Margin on a kilo sold in kilosRs 20 a kilo

Margin on a kilo sold in quarters, after 4 pouchesRs 42 a kilo

Margin on a kilo sold in Rs 50 pouches, after 5 pouchesRs 50 a kilo

The mistake: 250 g in the Rs 50 pouch instead of 200 gRs 200 a kilo

What that too-cheap pouch leaves you once its own pouches are paid forRs 0

Made-up figures, chosen to show the shape of the ladder. Put your own true cost at the top and the four rates underneath will build themselves.

Look at the last two lines. A Rs 50 pouch filled with 250 g feels generous and quietly kills the shelf. It works out at Rs 200 a kilo, under your own kilo rate of Rs 210, and once the pouch and tape are paid for it leaves nothing. Worse, it teaches the street to buy in pouches: your kilo sales drift away, your packing hour doubles, and you work harder for less out of the same sack.

Two habits keep the ladder straight. Round the small pack to a note people carry, because Rs 50 sells better than Rs 47, so move the weight in the pouch and never the price on the label. And keep the wholesale question separate: a shop buying from you to resell wants a bulk rate, while a woman buying a quarter kilo sits at the top of the ladder, which is the argument in two rates for one item. If the ladder still feels like guesswork, the ground under it is set out in how to price what you sell and still earn.

Once the sack is open, your stock count breaks

A closed sack is easy. One thing, one price, visible from the door. Cut the corner and it becomes something your book has no word for: not one sack, not fifty kilos, not any number you can count without a scale. This is where most shops stop counting the loose lines, and why the earnings on them stay invisible for years.

From the sack to the shelf rate, in five steps

1. 1Weigh the sack the day it arrives, before you cut it openWrite the real weight on the bag in pencil. The printed figure is a claim; your scale is the fact.
2. 2Take out the losses you already know are comingThe shortfall on the scale, the dust and spill at the bottom, and the little extra your hand gives on every sale.
3. 3Add what packing that sack actually costsPouches, tape, labels, and one honest hour of somebody's day priced at what that hour is worth.
4. 4Divide by the kilos you can sell, not by the number on the bagThat figure is your true cost per kilo, and it is the only one a rate should ever stand on.
5. 5Build the ladder, then count in the unit you sell inKilo, quarter kilo and pouch, each dearer per kilo than the one above it, and an opened sack counted in kilos from that day on.

Three rules make it countable again. Count the opened sack in the unit you sell in, never in sacks: once the corner is cut, that line is kilos. Record the wastage once, on the day you open it, as one line for the shortfall and the spill, instead of pretending fifty kilos crossed the counter when only 48.6 did. And keep the loose line separate from the sealed one.

Wasoolo can hold that shape: an item carries its own buy rate and sell rate, so a line bought as a sack and sold by the kilo sits as its own item, and Wasoolo's profit view then shows what the loose line earned rather than what the sack cost. If you would rather keep your register, keep it. A pencil, a scale and one honest page do the same sum, as long as the page exists. Either way it is the discipline in keeping shop stock right without counting all day.

When not to break the pack

Breaking bulk is not free money. Some lines are worse off open than closed.

Anything that goes bad once the seal is off. A 20-litre tin of oil poured out over three weeks in a hot shop is not the oil that came in, and whoever gets the last bottle will tell the street before he tells you.

Anything whose freshness is the product. Ground spices lose their smell and packet snacks their crunch, and a pouch of either sitting for a month is a complaint waiting to happen.

Anything the customer buys because the pack is sealed: medicine, baby food, any branded item where the seal is the proof. Loose is cheaper, but he is not buying cheap. He is buying certainty.

And any line whose pack carries a printed rate. The street knows that number, and selling it loose above it is a weekly argument at your own counter.

Everything else is where a small dukan actually earns, as long as you know what a kilo costs you. How much to buy at a time is a different question, worked through in buying stock in bulk or little and often.

Common questions

My supplier's 50 kg sack is never 50 kg. Should I argue about it?

Weigh every sack on the day it lands, in front of his man, and write the reading down for a month. One short sack is an accident; six is a rate. Then ask for a discount matching the average shortfall, or move the line to a supplier whose sacks weigh what the label says. Arguing without that month of readings gets you nothing.

Should I charge the customer for the pouch?

Not as a separate line. Someone charged Rs 2 for a pouch remembers it far longer than a Rs 2 discount. Build the pouch into the rate for that pack size, which is what the ladder does. Packing is part of selling loose, so it belongs inside the loose rate.

How much dearer should the small pack be than the kilo?

Start about fifteen in every hundred above your kilo rate for a quarter kilo, and a little more for the smallest pouch, then watch what moves. If your kilo sales fall, the small pack is too cheap. If the pouches sit while everybody buys kilos, you have pushed it too far.

I sell from one open sack all day. Do I really need a separate line for it?

Yes, because the sack and the loose stock carry different costs and rates. The sack is what you bought; the kilos are what you sell. Keeping them in one line is why the earnings on a broken pack are the hardest number in a dukan to see.

A man wants only 100 g. Is that worth the trouble?

Serve him, and price it honestly rather than refusing. A hundred grams at Rs 30 is Rs 300 a kilo, and he is not cheated: he pays for the pouch, the minute, and the fact that he can buy at all. Refuse him and he walks to a shop that will serve him.

Which lines should I never open at all?

Anything that spoils once the seal is broken, anything whose smell or crunch is the product, and anything bought precisely because the pack is sealed. Sealed cooking oil, medicine and baby food are the first group; ground spices and packet snacks the second, unless you sell them within the week.