March 8, 2024

In the supply chain, before a product reaches to end customers, it will first reach at least three stakeholders: a manufacturing company or a national supplier, distributor, and retailer. The sales transactions from each level of stakeholders have different names: primary, secondary, and tertiary sales. Primary Sales Primary sales refer to sales from the first stakeholder—a manufacturing company or national supplier to a distributor. In other words, the transaction between a manufacturing company/national supplier to a distributor in one city/state/region called “primary sales” transaction. A company makes an invoice of the product at distributor price and the revenue from the transaction is the net revenue of the company. Factors Determining Primary Sales Primary sales in a company are determined by various factors, including: The company’s popularity The company’s distribution network, how large it is The secondary sales The consumption pattern of a certain product, whether it is slow or fast. Those factors determine a Mystery Shopping company’s primary sales. The primary sales contribute to the company’s profits and revenue, thus, it is the main focus of the company. However, primary sales must be done with secondary sales to make it effective. Secondary Sales: After a product reaches a distributor, it will be invoiced to a retailer, thus, the transaction is called secondary sales. Distributors will keep its margin and set the product at dealer/retailer price. In the secondary sales, a distributor sells the product to a retailer. Nevertheless, a distributor can also sell it directly to an end customer. In modern retail, it works on the two-tier concept where the primary sales are from the company to the retail outlet and the secondary sales are from retail outlets to customers. Factors Determining Secondary Sales Secondary sales are determined by several key factors, including: The company’s popularity and brand equity of the company Stock availability The involvement of distributors and retailers Credit and trade promotions, the better trade promotions, the higher the sales are. Secondary sales are more important than the primary sales to a manufacturer industry because it affects the primary sales though it is not the responsibility of the manufacturer but the distributors/retailers. At this point, if the distributors do not show well performance, the companies have to find new distributors will better performance. This will ensure the fast movement of the company. In the final level of sales are tertiary levels. Tertiary sales are typically observed only if it’s on the three-tier distribution. For example, if the company sells a distributor who sells the product directly to the customers, then the tertiary sales will not exist. Tertiary Sales Tertiary sales are when a retailer sells the product to an end customer. On this transaction, the product is sold at MRP (maximum retail product) or MOP (market operating price). Tertiary sales involve end costumers which are the most important sales of all. Thus, companies should focus more on these sales to maximize their tertiary sales. If the tertiary sales are high, the secondary and the primary sales will automatically happen and these all will be done by mystery shopping. Factors Determining Tertiary Sales: Several key factors that determine tertiary sales are: Customers’ convenience to buy the product The marketing strategies to attract customers to make a purchase The company’s brand equity, the more popular the company, the more the tertiary sales will be appreciated by Market Segmentation. Product alternatives—a cheaper or a higher quality alternative of products Overall market movement. FAQs How do tertiary sales impact the supply chain? Tertiary sales complete the supply chain cycle, indicating the final consumption of products and influencing future production and distribution plans. Who is responsible for secondary sales? Distributors or wholesalers are responsible for secondary sales, selling products to retailers or consumers. How is primary sales different from secondary sales? Primary sales involve transactions between manufacturers and distributors, while secondary sales occur between distributors and retailers or end consumers. 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A money lender is someone who lends small amounts of money at a higher rate of interest. The reason for charging higher rates of interest is that the money lender faces a higher risk of default than normal banks due to various reasons. People who are desperately in need of money but at the same time do not have a bank account, people with bad credit histories and those who can’t get money from friends or relatives approach a money lender for credit facilities. In India, money lenders are governed by the Money Lenders Act in different states. The Rajasthan Government controls the money lending process in accordance with the Money Lenders Act, 1957. Factors to issue a license Money lender license is usually granted by the Revenue Department within 3 to 4 months from the date of submission of the application form. Once the application is received, it is valid for one year. However, there are a few factors that have to be taken into consideration while issuing/renewal/endorsement of a license: Whether the person has the competency to run a money lending business. Whether the applicant’s premise is an apt place to run the business. Whether granting the permission would be against the public interest. Who is a Money Lender? ‘Money-lender’ means an individual or an undivided Hindu family, or a company (not being a banking company as defined in section 5 of the Banking Regulation Act, 1949), body or institution other than such of them as may, by notification in the Official Gazette, be exempted from the provisions of this Act by the State Government on being satisfied that it is necessary or expedient so to do in public interest, or] an un-incorporated body of individuals, who or which,- carries on the business of money-lending in the State; or supplies, as a trader or dealer, goods other than agricultural goods on credit on condition of payment of interest by the buyer at a rate higher than that prescribed in section 29 in case the payment of sale price is not made within the stipulated period; or] has his or its principal place of such business in the State; What are the requirements for starting money Lender Business in Rajasthan? For commencing the business of a money lender in Rajasthan, the following requirements have to be satisfied by the applicant: Fit and Proper Person No Disqualifications Proper Firm Name Premises Stakeholder or Public Interest Documents requirement for Money Lender License Application form. Identity proof. Ration Card Bank account details Address of the shop or business (proof of address) Fees paid details (Challan and details) Education details Residential Proof: Residential Certificate issued by Local administration office/ Aadhaar card / Passport / Driving License / Ration Card / Govt. Id card / Defence ID Card / PAN Card. Age proof (birth certificate / school certificate) Applicant passport size photograph. Aadhaar card Affix stamp as advised by authorities if required. Important Note: All original and copy of original with self attestation as advised by respective authorities to be submitted as per requirement. Apart from the above documents authorities may ask to submit additional information or documents. Please provide them for processing. Procedure to apply for Money Lending License tep 1: Visit the Tahsildar Office The applicant has to visit the nearest Tahasildar office Step 2: Receive the application The applicant has to pay a fee of Rs. 100 to receive the application form from the Tahasildar. Step 3: Enter the details The applicant has to enter the required details in the application form. Step 4: Submission of the form The form has to be submitted to the Tahasildar’s office. FAQs What is a money lender license? A money lender license is a legal authorization granted by regulatory authorities to individuals or entities that wish to engage in lending money as a business. Why do I need a money lender license? A money lender license is required to ensure that lending activities comply with regulatory standards, protect consumers, and maintain the integrity of the financial system. Who issues money lender licenses? The issuance of money lender licenses is typically done by financial regulatory bodies or licensing authorities at the state or national level. 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Profit After Tax refers to the amount that remains after a company has paid off all of its operating and non-operating expenses, other liabilities and taxes. This profit is what is distributed by the entity to its shareholders as dividends or is kept as retained earnings in reserves. What Is an After-Tax Profit Margin? Profit After Tax is an important measure of the company, since it shows the actual amount that a company is making in that operating year. It shows the cost and the cash earnings of the company, which then determines the operational efficiency and performance. Often analysts pit companies’ profit after tax against other companies in the same market segment to compare the health of businesses. This figure is also used in other ratios and complex equations such as profit-after-tax margin, which gives a more objective and detailed look of the company. It is significant in showing the competency of a business in being able to turn its revenue into profits. Highlights of Profit After Tax It had many other names such as Net Operating Profit After Tax (NOPAT) or simply Net Profit After Tax. Profit After Tax is often an effective figure used to calculate ratios which measure the profitability and efficacy of the company Profit After Tax margin uses PAT to show how any change in the value will manipulate the stock prices when the company is publicly listed. If the company is listed, Profit After Tax is calculated on a per share basis too and it appears on the income statement of the company. If the PAT value is high, it shows high efficacy and vice versa. PAT is directly proportional to the dividends paid to equity shareholders; more profit after tax, better dividends are paid. When the profit after tax is negative, it is considered as a loss and therefore it is not taxable. It makes the company unsustainable during a loss period. What an After-Tax Profit Margin Indicates A high after-tax profit margin generally indicates that a company is being run efficiently, providing more value in the form of profits to shareholders. The after-tax profit margin alone is not an exact measure of a company’s performance or determinant of the effectiveness of its cost control measures. However, taken along with other performance measures, it can help create a useful picture of the overall health of a company.  This financial measure communicates how much income a company is earning per dollar of sales. Some industries inevitably have considerable costs. As a result, their margins may be low. However, that does not equate to poor control of costs. For this reason, it is important for investors to compare a company’s after-tax profit margin only with other companies in its industry rather than with companies in general. How to Calculate an After-Tax Profit Margin The formula for calculating a company’s after-tax profit margin is simply: After-tax profit margin=net incomenet sales /After-tax profit margin=net sales net income​​ Net income is the company’s total income minus taxes, expenses, and the costs of goods sold (COGS). It is often referred to as the bottom line because it is the final line item on an income statement. Expenses include wages, rent, advertising, insurance, etc. Costs of goods sold are the costs associated with the production of products. Such costs include, but are not limited to, raw materials, labor, and overhead.   Net sales, the other component for calculating after-tax profit margins, is the total amount of gross sales after subtracting returns, allowances, and discounts. Also factored in net sales are deductions for damaged, stolen, and missing products. The net sales figure can be a good indicator of what a company expects to attain in sales for future periods. It is an essential factor in forecasting, and it can also help identify inefficiencies in loss prevention. After-Tax Profit Margin vs. Pre-Tax Profit Margin The after-tax profit margin is the net profit margin, including taxes. The pre-tax profit margin is similar, except that it excludes taxes. The pre-tax profit margin is useful when comparing companies that have meaningfully different tax rates, such as those of different sizes and scale, or those operating in different countries and tax jurisdictions.  For example, corporations in Pennsylvania pay a top marginal income tax rate to their state of 8.99%, while those in neighboring West Virginia, pay a top marginal rate of 6.50%, according to the Tax Foundation. In addition to income taxes, companies may be subject to other state taxes, which can also vary from one state to another.Pre-tax profit margin can also be more useful in comparing the same company’s performance over time, especially if tax rates or penalties have varied during that period. The reasoning behind using the pre-tax profit margin is that tax payments have little to do with the efficiency of a company because they are not something that the company has much control over.  FAQs What Is a Good After-Tax Profit Margin? What constitutes a “good” after-tax profit margin or net profit margin can vary widely from industry to industry.  What Is Operating Profit Margin? Operating profit margin is another measure of a company’s performance. In contrast to net profit margin or after-tax profit margin, it is calculated by dividing a company’s operating income by its revenue. Operating income is revenue minus operating expenses, but doesn’t include any other, non-operating expenses, such as interest and taxes. What Is Gross Profit Margin? A company’s gross profit margin is calculated by dividing its gross profits by its revenue. Gross profit, in contrast to operating profit or net profit, is calculated by subtracting its cost of goods sold (COGS), but not any other operating or non-operating costs, from its revenue. 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