The customer who only buys your thinnest margin

He is one of the biggest names in your book and almost nothing in your drawer. Work the number out before you decide anything: say Rs 18,000 of goods at 3 in a hundred leaves Rs 540, and the delivery and the waiting money can eat all of it. Then fix the item, never the man.

The biggest name in your book

Adnan comes in twice a week, a little after eight in the morning, before the street fills up. Two bags of flour, a five kilo tin of oil, sugar by the kilo, and milk for the tea shop he runs at the corner. He never argues about a rate. He never asks for a fifth bag on credit. He clears his account on the tenth without being chased.

Look down your list of customers and his name sits near the top. Rs 18,000 of goods in a month, sometimes more. Ask yourself which customers matter to your shop and you would name him in the first three without thinking.

Now look at what he never buys. No biscuits. No soap, no shampoo sachets, no cold drinks, no washing powder, no bread. Those he takes from the shop by the bus stop, because he passes it on the way back. He buys from you exactly the lines that the whole street prices to the bone, the four or five items where every shopkeeper for a mile knows the rate and nobody dares stand Rs 5 above it.

That is the whole shape of the problem. On paper he is a big customer. In the drawer he is a rounding error. And you have felt like a busy, successful shop the entire time.

Say he takes Rs 18,000 in a month

Do the sum once, properly, with your own numbers.

Flour, sugar, oil and milk are the lines where you keep the least. Say the four together leave you 3 rupees in a hundred, which is generous for milk and about right for a bag of flour. On Rs 18,000 of goods that is Rs 540 for the month.

Rs 540. That is the whole return on the customer you would have named in your top three.

Now take away what serving him actually costs you.

You send a boy to his tea shop with the heavy items, six trips across the month, and the boy's time and the fuel are worth about Rs 50 a trip. There goes Rs 300.

He takes it on udhaar, the credit you give, and clears it on the tenth. So roughly Rs 18,000 of your cash stands outside the shop for about five weeks at a time. That money is not free. It is the carton of biscuits you did not buy, and a carton of biscuits leaves you far more than 3 in a hundred. Put a modest Rs 350 on it.

Rs 540 in, Rs 650 out. The month with him closed Rs 110 short, and the two feet of shelf you keep permanently loaded so he never finds the flour finished has not even been counted.

Some months it comes out positive. Some months it does not. The point is that you did not know either way, and you were making decisions as though this one man were carrying the shop.

He is not the enemy, and the flour is why

Careful here, because the easy conclusion is the wrong one.

Those thin lines are the reason the street walks through your door. Nobody wakes up wanting to visit a shop. People come because the flour ran out, or the sugar finished, or there was no milk for the morning tea. A shop with no flour has no traffic, and a shop with no traffic sells no soap either.

Price the thin lines high and you do not lose the flour customer alone. You lose everybody, because flour, sugar and oil are the prices your street carries in its head. Knowing what people compare and what they never check separates a rate that holds from one that empties your counter.

There is a second thing Adnan gives you that never appears in the sum. Volume moves your buying. The wholesaler quotes you differently when you lift ten bags a week instead of four, and that better rate applies to the flour you sell everybody, not only to his share.

So the honest question is never how to get rid of him. Almost nobody who started with that question ended up with a better shop.

The real question: which scarce thing is he taking

The four scarce things in a small shop

1. 1The shelfEvery foot held for a thin line is a foot not holding something that earns more.
2. 2The deliveryA person, a bike and half an hour that your counter did not get.
3. 3The creditA rupee of udhaar on a 3 percent line is a rupee not free for a 20 percent one.
4. 4The busy half hourBetween five and half past six, whoever you are serving is the only one you can serve.

A small shop has four things that run out, and money is only one of them.

The shelf. Space and stock are both finite. Every foot held for a thin line is a foot not holding something that earns more, and every rupee standing in a sack of flour stands nowhere else.

The delivery. If you send goods out, that is a person, a bike and half an hour that the counter did not get.

The credit. Your udhaar book has a ceiling whether you have written it down or not. A rupee of credit given to a 3 percent line is a rupee not available for a 20 percent one.

The busy half hour. Between five and half past six, whoever you are serving is the only person you can serve. A customer who takes ten minutes for Rs 900 of flour in that window is expensive in a way no ledger shows.

He does not have to be taking all four. A customer who buys thin lines, pays cash, carries his own bags and comes at eleven in the morning costs you almost nothing and is welcome forever. The same customer on credit, with delivery, at half past six, is a different customer wearing the same face.

Five moves, and the sentence that makes them safe

Make it a rule about the item, never about the man

✓Say this

• "Flour and sugar are cash only now, for the whole shop."
• "Delivery is free above Rs 2,500 of mixed goods, Rs 60 below that."
• "Bring me the soap and the tea as well and I will do the whole basket at a better number."
• "The company rate moves every week, so I cannot carry that one on the book."

✕Never this

• "You only ever buy the cheap things from me."
• "I am not giving you credit any more."
• "Your flour is going up by Rs 10 from tomorrow."
• "Other customers buy a lot more than you do."

Once you know the number, the moves are small and none of them is a fight.

Take the thin lines off credit first. Three rupees in a hundred cannot fund five weeks of waiting. That is arithmetic, not attitude.

Say it as a rule about the item, never about the man. This is the whole trick. "Those two I keep cash only, for everyone" is a shop policy. "I am not giving you credit any more" is a quarrel, and by the evening four people have heard a version of it.

Saleem sells rice and flour at the top of the lane. On a Tuesday at ten past four, when Rafiq came in for his usual two bags, Saleem said it before Rafiq could reach for his khata page: "Flour and sugar have gone cash only, brother, for the whole shop. The company rate moves every week and I cannot carry it on the book." Rafiq paid cash. He also picked up a packet of tea, because his wallet was already open.

Take them off free delivery too, or price the delivery honestly. A Rs 60 charge on a Rs 900 delivery is not rude. Staying silent about a cost you are carrying is what turns into resentment later.

Put one thing worth having beside the thing he came for. Adnan buys milk. What sits next to the milk? If the answer is nothing, that is your decision, not his. Tea, a good biscuit at eye level, a small tin of ghee, and the thing he was going to buy at the bus stop is already in his hand.

Give him a reason to bring you the rest of the list. A better rate on the whole basket, never a worse rate on the thin item. "Bring me your soap and washing powder as well and I will do the whole basket at a better number" is a real offer. Raising the flour by Rs 10 loses him and the four people he talks to. When a customer asks for a discount, this is the shape of the answer that costs you least.

And if he is buying a shop's quantity rather than a house's, he is a wholesale buyer standing at a retail counter. That is its own arrangement, with its own rate and its own terms.

When thin and fast is the right shop anyway

Say: two shelves, Rs 9,000 of stock on each, one month

Thin and fastFat and still

What Rs 100 of it leaves youThin and fastRs 3Fat and stillRs 25

How often the shelf emptiesThin and fastFour times in the monthFat and stillOnce in three months

So the month's sales areThin and fastRs 36,000Fat and stillRs 3,000

And the shelf left youThin and fastRs 1,080Fat and stillRs 750

What can go wrongThin and fastEmpty the morning he arrivesFat and stillStill sitting there a year later

Here is the honest case for changing nothing at all.

Say you hold Rs 9,000 of stock in a thin line that leaves 3 in a hundred, and it turns over four times in a month because of customers like Adnan. That shelf sold Rs 36,000 of goods and left you Rs 1,080.

Now say you hold Rs 9,000 in a proud line that leaves 25 in a hundred and sells out once in three months. Per month that is Rs 3,000 of sales and Rs 750 left on the shelf.

The thin shelf won, and it won because it moved. Speed is a form of margin. A customer who empties a shelf on a schedule is doing something for you that no percentage on a label can do.

The trap is that this only holds while the line is genuinely fast. The day a thin line slows down it becomes the worst shelf in the shop: no margin and no movement. Which is why you want to watch your real profit rather than your sales total, because sales will keep telling you that everything is fine.

What your own book can tell you

In Wasoolo, every product carries its buying rate beside its selling rate. So what a basket left you is arithmetic instead of a feeling. Enter the flour, the sugar and the oil at the quantities Adnan actually took, and the answer is on the screen rather than in your head at midnight.

His khata shows the other half: what he took, on which dates, and when the money came back. Five weeks of waiting reads as five weeks, not as "he is a little slow". The profit view rests on the same buying rates, so your shop's month and one customer's month get measured with the same ruler. Wasoolo is 100% free to download.

What it will not do is rank your customers or put a score beside Adnan's name. It gives you the rates, the entries and the dates. The judgement about who gets the shelf, the delivery and the credit stays with the person behind the counter.

Common questions

How do I work out what one customer actually leaves me?

Take one month of his purchases and write every line with two numbers: what you sold it for and what it cost you. Add up the difference and that is his margin. Then subtract the deliveries you sent and what the waiting money cost you. If your products already carry their buying rate, as they do in Wasoolo, half of that work is done for you.

Should I stop giving him udhaar completely?

Not completely, and never as a decision about him. Take the thinnest lines off credit as a rule that applies to every customer, and leave the rest of your book alone. Three rupees in a hundred cannot fund five weeks of waiting, and saying that about an item insults nobody.

He gets annoyed when I charge for delivery. What do I say?

Give the charge a rule and a floor so it never sounds personal. "Free above Rs 2,500 of mixed goods, Rs 60 below that" is a shop rule a man can plan around. Say it to everybody who asks for a delivery, and write it where people can read it.

Can I just raise the rate on flour and sugar for him?

That is the one move that reliably costs more than it earns. Those are the prices your street knows by heart, and a customer who finds you Rs 10 above the shop at the bus stop tells four people before the evening. Move the whole basket instead.

What if he is a wholesale buyer pretending to be a retail one?

Then treat him as one, openly, and the argument settles itself. A separate rate for a shop's quantity, with its own terms, is ordinary trade. What kills a shop is a wholesale quantity leaving at a retail service level: delivery, credit and your best half hour, at a rate meant for one bag.

My whole shop is thin lines. Is that a problem?

Only if the money is slow as well as thin. A shelf that turns four times a month at 3 in a hundred beats a proud shelf that sits for three months. Count the turns before you count the percentage, then add one or two fuller lines beside the thin ones instead of replacing anything.

Got a customer like this in your own book? Send us a message with what he takes in a month and what it costs you, and we will work the number through with you.