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Determinants Of Supply And Demand

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When applied to real estate, the principle of supply and demand refers to the ability of people to pay for housing coupled with the relative scarcity of real estate. For any type of good or service to have value in any marketplace, it must possess four characteristics: demand, utility, transferability and scarcity. Demand is a need or desire coupled with the purchasing power to fill it, whereas utility is the ability of a good or service to fill that need. Scarcity means there must be a short supply relative to demand. Air, for example, has utility and is in demand, but it is not scarce. Finally, a good or service must be transferable to have value to anyone other than the person possessing it.

In evaluating a property's value or potential worth, attention must be given to such matters on the demand side as population growth, personal income, and the tastes and preferences of people. On the supply side, one must look at the available supply of real estate housing and its relative scarcity. When the supply of real estate housing property is limited and demand is great, the result is rising land or housing property value prices. Conversely, where land is abundant and there are relatively few buyers, housing supply and demand will be in check or balanced at only a few cents per square foot.

The principal of change serves as a reminder that real property uses are always in a state of change. Although it may be imperceptible on a day to day basis, housing supply and demand change can easily be seen when longer periods of time are considered. Because the present value of property is related to its future uses, the more potential changes that can be identified, the more accurate the estimates of its present worth.

Determinants Of Supply And Demand

The supply and chain, simply means knowing what your customers are looking for, and supplying the specific items. Given below are five tips on how to assess customer demand and how to supply the right item accordingly.

1. Know customer trends/customer needs. This means that you must know whether what you make is preferred by the customer. If you have your own niche in style and design, you can always keep a good amount of stocks, to last a long time. You can take note of customer trends, not only by observing what they buy but also through many organizations who provide valuable information on various aspects of the hand made craft business. Since trends have a short life-cycle, you should continuously focus on the niche that you have built. Trends will naturally follow these items.

2. Build up extra stocks. There are many ways to know how much you should make and how much you should stock. Taking orders from home or online is simple. If you participate in a handicraft show, keep ready stocks available. Talk to people who have taken part previously and also the organizers of these craft shows, to get a first hand feel of the purchase patterns. Moreover, always know what items are your best sellers. If they are seasonal products, make sure that you have enough stock in that particular season. Since customer demand may not remain the same every year, studying the fluctuations over a period of time, gives you a fair idea of the customer choices.

3. Stay ahead. Whatever you niche may be, make sure that you have adequate stocks of items that sell o may not sell. This gives you the advantage of a faster turn around time when in need. A professional always keeps enough stocks. Especially when potential customers make enquiries about an item which is gaining popularity.

4. Keep a tab on what you sell. To know what stocks you should keep is to know what you are selling. Not only should you do this for your on line sales but also all the craft shows you have participated in and the goods which were popular during that time. Since demand for a particular item can grow through word of mouth publicity, it is possible that the popular items of last year will become even more popular this year.

5. Get hold of more relevant information. If you are a novice in the handicraft business and not too sure what sells and what does not, you must get in touch with people who do know. There are many organizations as well as individuals who can help you with valuable information on the subject. The other information sources for sales estimates and inventory levels are online, magazines, daily newspapers etc who can throw more light on the matter of handicraft business.

Irrespective of which handicraft you decide to business in, which niche of the market you wish to capture, where you wish to sell your products, the most critical element is to maintain adequate stocks of your products at all times, so that there is never a stock out situation. If you can assess the market trends and customer preferences and make products accordingly, you will soon become a successful professional in the field.

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About Author

Both Tj Nelson & Dorothy Kimble are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Tj Nelson has sinced written about articles on various topics from Finances, Real Estate and Travel and Leisure. With twenty plus years experience as a real estate agent, appraiser and real estate investor TJ Nelson,, provides the tools f. Tj Nelson's top article generates over 880 views. to your Favourites.

Dorothy Kimble has sinced written about articles on various topics from Arts, Real Estate and Advertising Guide. Dorothy Kimble is a staff writer at and is an occasional contributor to several other websites, including. Dorothy Kimble's top article generates over 27100 views. to your Favourites.

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