WTDTYABS # 2271

Another "What They Don't Teach You At Business School" story. # 2271.

I enjoy studying small businesses. Those small 10 x 10 street outlets that reveal amazingly unique working models, when you scratch beneath the surface.

I was chatting with the owner of Top Chips - one of the many thousand small-fry, snack shops in Bangalore. The store fronts usually have squeaky-clean glass cases that hold crisp, uniquely flavoured chips. In addition to regular potato chips, this store has carrot chips, karela chips, banana chips, green pepper chips, baby corn chips ... just about anything that can be sliced, diced, flavoured and fried - while you watch, salivating.

I'm usually fussy about the oil used at some of these outlets, so I asked him one question many customers would hesitate to ask. "How often do you refresh the oil in your kadais ?" His answer : Every Day !.

That was hard to believe and I told him that. How could he actually throw out 30 litres of oil every day ?

Over to Mr Top Chips. "Every evening, I sell used oil from these deep-bottom kadais, at  "half MRP" to a street cart vendor. He is happy, I am happy, my customers are happy."

His "everyone is happy" story had more than one angle to it, if you can see what I mean.

- Mr Top Chips pays Rs 50* per litre and gets back half MRP.
   His cost per litre : Rs 25.

- Every evening, the cart vendor buys oil at half MRP per litre.
   His cost per litre : Rs 25.

- Mr Top Chips gets fresh oil at Rs 25 a litre

- The cart vendor gets used oil at Rs 25 a litre

I always knew there was an early mover advantage, somewhere.

Sharath Bhat is a freelance advertising writer in Bangalore. Any product / registered name mentioned in this article belongs to its registered owners. Any reference made is only linked to the storyline of the article. * Cost of 50 per litre used only as an example.