Some sellers stunt their growth and limit the potential of their performance because of having a limited view of the product or service they are selling.
For instance, most property sellers see themselves as selling land and not an investment, and therefore, not just being in the property, but in the investment space too.
Granted, most Kenyans will buy land driven more by the cultural obsession of owning it than because they have thought it through as an investment. It just sounds aligned to social interactions to say, “I bought a plot.”
And truth is, many property sellers thrive in this space. That is why, buy two (plots) and get one free offer, hitherto common to fast-moving consumer goods like soda, are now commonplace in adverts selling land. And with the two plots going for one Sh100,000, with only a ten per cent deposit and the balance spread over two years, it’s an enticing buy.
The problem comes in when the seller encounters a discerning buyer who, say, asks, “What is your average rate of return annually? I see here in the Business Daily that the NSE gave a return on nine per cent last year.” The seller is stumped. Likely he doesn’t even read the Business Daily. Worse still, ‘What is NSE?’ he wonders. By some miracle, the penny drops — aha! Nairobi Securities Exchange. His face lights up and he exclaims, “Oooh the shares people. No, them, they sell shares; us, we sell land (sic). We are not the same.” Noting ignorance, but being polite, the potential buyer says, “Let me get back to you.” Which he never will.
The reason why the seller is confused is that he has always seen himself/herself as selling parcels of land and not parcels of investment.
The former limits his/her view of himself/herself, the potential buyers he approaches and therefore gains that he can earn. It is beyond him for instance, to advise the discerning prospect thus: “Shares and land are both useful channels of investment. Our rate of return has been more than ten per cent on average year on year but that’s not important. What matters is what your investment horizon and goals are.
“If you could let me know what these are we can align them to a property that will accelerate their attainment.”
Similarly, insurance agents that are unable to discern security from investment, struggle. Telling the discerning buyer that they will earn X amount every five years where X is less than (even equal to) what they will have paid in premiums (price) by then, makes it a non-investment.
However, the comfort of knowing that should I live throughout the period I’m secured I’ll get most of my money back, is somewhat comforting.
The two sellers are not the only culprits. Not understanding the industry one is in, limits the seller’s potential for growth.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
