Enter Guwahati with dental consumables?
Before the decision
Dental clinics regularly substitute brands when orders arrive late. The founder’s first sales came through clinic referrals. Larger clinics want predictable restocking across several products and are less interested in switching one item at a time.
The problem
Should the team choose Own sales team or Regional stockist for the next 12 months?
Decision owner: The business unit lead.
The stockist’s catalogue includes competitors that may get shelf priority.
Option economics
Scroll the table to see all figures.
| Option | Volume (orders) | ₹ per unit | Fixed cost | Net contribution |
|---|---|---|---|---|
| Own sales team | 32,000 | 330 | ₹61 lakh | ₹44.6 lakh |
| Regional stockist | 35,000 | 214 | ₹19 lakh | ₹55.9 lakh |
Make the call
- Calculate net contribution for Own sales team and Regional stockist. Which assumption makes the comparison most fragile?
- If the leading option delivers 10% fewer orders, does your recommendation change?
- What evidence would you ask for before the team makes an irreversible commitment?
Reveal the worked solution
Start by validating Regional stockist. It contributes ₹55.9 lakh after fixed costs and leads by ₹11.3 lakh. Treat that gap as the amount of unmodelled cost or lost contribution the option can absorb before the ranking reverses.
- Frame the decision
Separate demand you can reach from demand you can serve reliably. Test reorder behaviour before using the full-year forecast.
- Calculate both options
Own sales team: 32,000 orders × ₹330 less ₹61 lakh in fixed costs gives ₹44.6 lakh. Regional stockist: 35,000 orders × ₹214 less ₹19 lakh in fixed costs gives ₹55.9 lakh.
- Stress-test the forecast
Regional stockist leads by ₹11.3 lakh in the base case. If Regional stockist delivers 10% fewer orders (31,500) at the same margin and fixed cost, it contributes ₹48.41 lakh. Holding the other option constant, the stressed result still leads. This isolates volume risk. Check whether both options would respond to the same change in demand.
- Set a decision threshold
Holding the other option’s result fixed, Regional stockist needs at least 29,720 orders to match or beat it under the model. Track fill rate on fast-moving items and mystery-shop repeat availability.
The stockist’s catalogue includes competitors that may get shelf priority. Compare the cost of a limited test with the loss the business would face if the full commitment failed. Ask the team to agree the decision criterion before collecting more evidence.
What if the whole market moves?
The worked solution tests a change to one option at a time. Here, both options gain or lose the same percentage of volume. Unit contribution and fixed costs stay constant.
| Volume scenario | Own sales team | Regional stockist | Higher contribution |
|---|---|---|---|
| Both lose 10% of volume | ₹34.04 lakh | ₹48.41 lakh | Regional stockist |
| Base assumptions | ₹44.6 lakh | ₹55.9 lakh | Regional stockist |
| Both gain 10% of volume | ₹55.16 lakh | ₹63.39 lakh | Regional stockist |
Explain which option you would take forward. Check whether capacity, price or customer mix would also change as the market moves.