The better side of corruption

Corruption is an enabler. It thrives on inefficiency, shortcomings of the system and provides a way to get things done for a price.  People pay for stuff that is valuable to them, hence at the very least corruption is a great validation...it validates, confirms that something is important.  The answer to the question, how do I make something better becomes self evident...fix things where their is corruption.

I wanted to move from Reliance CDMA to Airtel GSM. After 2 weeks, 6 visits of 30 minutes each and asking 10 times when should I disconnect my Reliance connection, the ultimate answer is - "Sorry your request couldn't be processed because you have not disconnected your Reliance connection".

I wish Airtel guys were corrupt. They would have known what people want, how much they want it and  the best interface to execute it.

Customer Support

Customers really don't want Customer Support, they just want working products. 

Price & Retailer Margin

Assuming price is determined by the demand and supply rules, how does one decides the retailer margin?

Let P be the price and M% be the retailers margin and C the expected number of units sold per month, then

Earnings per month for retailer = P * M * C
This number should be high enough to make a living for the retailer after deducting the cost of running the business.

Examples:

• Mobile prices are high and number of units sold per month is good, causing margins to be low
• Taps, shower, lights, basins, etc are sold at low volumes, prices are OK and margins are very high
• FMCG products have very low margins
• Kitchen chimneys and burners are high priced, volumes are low and margins are high
• Cigarettes have high volume and hence margins are low
• High end cosmetics have very low volumes, hence has reasonable margins
• Books have low volume, unit price is OK, margins should be high
• Text Books have high volume, unit price is OK, but they are sold only once in a year, very much like crackers on diwali.
• Pet food also has low volume and hence high margins
• Furniture again low volume, high price and hence margins ought to be reasonable.

I guess the opportunity for e-commerce is creating business efficiency for low volume products to drive their prices down by passing on the profits to customers making it impossible for some of the retailers to justify their business. The high volume products will always have lower margins and hence price is not what will drive buying on the net, but the other factors like trust, service, range, etc. It also opens up the market for products which couldn't find retail space because they couldn't fulfill this equation.

Another side effect of this equation is what will be counter intuitive for most economists. Under specific circumstances, when the demand goes low, prices don't really go down, they increase. The reason - retailer needs to meet his monthly needs. If he makes less money, the only way to go back to original income levels is increasing the price and not decreasing the price. The specific circumstances are:

• All retailers are friends (taxi operators, unions, etc) 
• Customer lifetime values is same as that of current transaction. For example a tourist hiring a taxi is not going to remember or call the same guy on his next visit.
• How much time does customer has to make the decision. The lesser the time, less choice he has.
• Customer already committed part of the money. 
• Does competition exists? 
• Is trust part of the equation?  

Old Poem

मुर्गी से आया है अंडा

या अंडे से मुर्गी आई है 

कविता ने कवी को बनाया है 

या कवी ने कविता बनाई है

दुविधा में हूँ फंसा हुआ 

क्या सच है क्या सचायी है

क्या सच की कोई परिभासा है 

क्या सच झूठ के बीच कोई रेखा है 

जो देखा है वोह सच है क्या 

क्या सच को किसी ने देखा है 

क्या वही है सच जो दीखता है 

या वोह जो आप समझते हैं

लकिन जो आप समझते है 

क्या आप उसे समझते हैं

मैंने सच को समझा नहीं 

जो समझा है समझा दे मुझे 

मैं उलझा हूँ उलझन मैं मेरी 

मुजको मुझेसे मिला दो हरे

Mean And/Or Stupid

Mean and Stupid are two labels which can be used to describe people. Just like tall, dark, handsome or generous, wealthy, shy, happy, content, etc. All labels are dangerous, but these two in-particular are particularly dangerous.

Label someone mean and it gives us the license to be mean to them.
Label someone stupid and it gives us the license to not listen to them. Someone who doesn't appreciates something intelligent said to them is by definition stupid.

Thinking someone is mean and/or stupid eventually makes us  mean and stupid and being mean and stupid anyway causes other people to be mean and stupid. It is a vicious circle.  It is fiction creating hardcore reality which is actually factitious.

Just think how many people are mean and stupid just because we think they are. You are what you think you are is alright, but you are what you think someone else is, is scary.