One of the best things about this industry is that it can range from small shops to multinational corporations. It includes the small soap shop on the back streets of Prague and the Christian Dior store down the street from the Arc de Triomphe. And no matter how successful or prestigious these businesses get they all function under the same economic factors.
Household and Personal products work the same way as any basic business. They produce a product and then sell that product at a local store or online. Most sales for this Industry Occur outside the US, and so these businesses make the most of their money by (if centered in the US) expanding to the Global Market and even by franchising. Also, the industry consists of many different types of products. Lets use a skin care store as an example. This store may sell something like bath bubbles and body lotion. If there is suddenly a decrease in demand for bath bubbles, it does not kill the business because the decrease in demand for bath bubbles does not mean there is a decrease in demand for body lotion.
The costs of the Industry are generally the same no matter what kind of business there is. Money needs to go into the raw and packaging materials (that are not significantly detrimental to the safety of its customers), shipping, labour, ect. Revenue growth, it seems, comes more from expanding geographic reach than more units sold. There is always going to be demand for laundry detergent and household cleansers, and even make up. But depending on where the business is operating from there will be more demand in some areas of the country, and even the world than there will be in others. For example, Elizabeth Arden, the beauty products company, saw a 3.1% net sales increase this quarter, despite the economic recession. This was due, according to the attached article, to a sales increase outside of the US. So it appears functioning outside of the US is one of the best ways to increase sales for Household and Beauty products companies.
Experts foresee a decline in demand for the household and personal products industry. The economic recession as well as rising energy prices and the bad housing market mean that consumers have less disposable income, and therefore the demand for personal products will decrease. There is also a rising cost in raw materials and packaging materials for this industry, which will cause the supply to decrease as well.
Elizabeth Arden
http://www.happi.com/news/2011/02/04/sales_up_at_elizabeth_arden
General Reference
byuibc.org/files/30-30%20Household%20and%20Personal%20Products.doc
No comments:
Post a Comment