Supply on Demand, Supply on Transact, and a new way of Stimulating Economic Growth
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Supply and demand are the foundations of all free-market economic systems. Buyers need various types of goods and services, and businesses produce and provide these to meet the demand. In this way money moves through the economy, creating value as it changes hands – in theory at least.
Within supply and demand economics, businesses (or sometimes whole industries) either focus on supplying products and services to fulfil an existing need (demand-led), or they create a new, or reworked, product or service then work to create a demand for their offering (supply-led).
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Demand-led businesses tend to be more traditional and conservative because they work in established markets, although they may redesign and improve particular products to improve their market share. The key advantage of this type of business is that there is well-established demand, but on the flip side there is also a lot of competition and it can be hard to stand out.
Supply-led businesses tend to be more innovative and take more risks. Think of Ford with the Model T, the early PC manufacturers, iPhone, etc. – all needed to convince their potential customers that they actually needed the product and that it improved their lives before demand took off. This need to change buyer behaviour to drive sales is the main disadvantage of this type of business, but on the plus side, there is generally little real competition, at least in the early days.
Although supply and demand are very much a part of the South African economic landscape, and for good reason, there is also another concept that is likely to play an increasingly important role going forward – Supply on Transact.
In a supply on transact model, simply performing a transaction creates extra value for both the buyer and seller. Consumers are aggressively rewarded for transacting and the value created as a result flows back to participating suppliers.
A good example of how this works in practice is the Aetas Transact app-based platform. Using this system, participating vendors list their products and services for sale on the platform so that customers (other app users) can see what they offer and do business with them, in-store or online depending on the vendor’s business model.
When a customer makes a purchase, they are rewarded with 100% of their Rand spend back in SIΣGMA (Σ), a virtual currency created to facilitate buying and selling via the platform. This doubles their buying power and stimulates demand for the goods and services provided by vendors.
The customer can use the SIΣGMA to purchase more from the same vendor or spend them with another vendor, with all vendors benefiting from an overall increase in Rand spend as well as from customers buying more items to use up their SIΣGMA.
Although vendors can quickly and easily redeem their SIΣGMA by converting them into Rand value, consumers can’t do this. The only way they can use their SIΣGMA is to spend them at participating businesses – so the value created flows back to vendors.
Supply-led businesses tend to be more innovative and take more risks. Think of Ford with the Model T, the early PC manufacturers, iPhone, etc. – all needed to convince their potential customers that they actually needed the product and that it improved their lives before demand took off. This need to change buyer behaviour to drive sales is the main disadvantage of this type of business, but on the plus side, there is generally little real competition, at least in the early days.
Although supply and demand are very much a part of the South African economic landscape, and for good reason, there is also another concept that is likely to play an increasingly important role going forward – Supply on Transact.
In a supply on transact model, simply performing a transaction creates extra value for both the buyer and seller. Consumers are aggressively rewarded for transacting and the value created as a result flows back to participating suppliers.
A good example of how this works in practice is the Aetas Transact app-based platform. Using this system, participating vendors list their products and services for sale on the platform so that customers (other app users) can see what they offer and do business with them, in-store or online depending on the vendor’s business model.
When a customer makes a purchase, they are rewarded with 100% of their Rand spend back in SIΣGMA (Σ), a virtual currency created to facilitate buying and selling via the platform. This doubles their buying power and stimulates demand for the goods and services provided by vendors.
The customer can use the SIΣGMA to purchase more from the same vendor or spend them with another vendor, with all vendors benefiting from an overall increase in Rand spend as well as from customers buying more items to use up their SIΣGMA.
Although vendors can quickly and easily redeem their SIΣGMA by converting them into Rand value, consumers can’t do this. The only way they can use their SIΣGMA is to spend them at participating businesses – so the value created flows back to vendors.
Using and benefitting from the platform as a Vendor is very straightforward:
- Download the Aetas Transact app from the Google Play Store
- Create a SIΣGMA e-wallet (there is a nominal R45pm wallet charge, but no other costs)
- Use the app to list your products and services on the platform – you can upload images and videos to make the listings more appealing
- Wait for customers to visit your business or order from you online
The supply on transact concept creates a symbiotic, closed-loop system, sometimes referred to as a “second economy” in which a consumer’s buying power increases the more they transact, stimulating demand, and the supply of goods and services expands to meet the increased demand.
CLICK HERE find out more about how Aetas Transact works, HERE to find out about how it can form part of your business recovery and sales increase plan, or HERE to go to our website and sign up as a vendor.
See Also:
Aetas Transact: What it is, How it works, and the impact it can have on Your SME Business
A Business Recovery Plan with a Difference for Your SME
Supply on Demand, Supply on Transact, and a new way of Stimulating Economic Growth
The Second Economy of South Africa
Aetas Transact: What it is, How it works, and the impact it can have on Your SME Business
A Business Recovery Plan with a Difference for Your SME
Supply on Demand, Supply on Transact, and a new way of Stimulating Economic Growth
The Second Economy of South Africa
