Research Topic:
Why Local Vendors Are Failing to Make Quick Profit in Mkoba 9
Mathematics project: Eggs case study
Introduction
This project looks at why many local vendors in Mkoba 9 are struggling to make profit, especially those
who sell eggs. The focus is on comparing prices between vendors and shop owners, and why vendors
are not gaining even though they do not pay rent or tax.
Stage 1: Problem Identification
Problem Statement:
Local vendors in Mkoba 9 are failing to make quick profit from selling eggs, even though they buy them
at the same wholesale price as shops and do not pay rent or tax. Vendors sell 6 eggs for $1, while shop
owners sell 7 eggs for $1, yet vendors still do not profit.
Initial Solution Statement:
To solve this problem, vendors must understand how to price their goods properly, manage their stock
wisely, and find ways to attract more customers.
Stage 2: Investigation of Related Ideas
Literature Review Report:
According to small business studies, vendors must calculate their profit margins carefully to stay in
business. Selling below break-even price leads to losses (Mwangi, 2021). Also, vendors must understand
how customer preferences and competition affect pricing (Chikomba, 2020).
Data Collection and Analysis Report:
Observation: Vendors buy crates of eggs for $3 (30 eggs per crate).
Interview with 3 vendors: All buy at $3, sell 6 eggs per $1.
Interview with 2 shop owners: Sell 7 eggs per $1, still manage to restock and profit due to higher sales
volume.
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Analysis:
Vendors are selling at a higher cost per egg but lower quantity.
Vendors sell less in a day compared to shops due to poor location and presentation.
Stage 3: Generation of Ideas
Idea Generation Report:
1. Vendors can increase their quantity to 7 eggs per $1 to match shops.
2. Vendors can improve customer service and display.
3. Vendors can move to busy areas.
4. Vendors can buy in larger quantities to get discounts.
Experimentation and Testing Report:
One vendor tried selling 7 eggs for $1 for one week and saw more customers. Another tried shouting
promotions and improved visibility, leading to more sales.
Stage 4: Development of Ideas
Idea Evaluation and Selection Report:
The best idea is to adjust pricing and match competition, while increasing visibility through better
location or promotion.
Implementation Plan:
Sell 7 eggs per $1 to attract more buyers.
Buy more crates at once to reduce costs.
Use signs and good presentation to attract customers.
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Stage 5: Presentation of Results
Written Report with Calculations
Wholesale price of one crate of eggs (30 eggs) = $3
So cost per egg = $3 ÷ 30 = $0.10
If Vendor Sells 6 Eggs for $1:
6 eggs cost = 6 × $0.10 = $0.60
So Profit = $1.00 – $0.60 = $0.40 per sale
BUT
Total number of sales per crate = 30 eggs ÷ 6 = 5 sales
Total revenue = 5 sales × $1 = $5
Profit per crate = $5 – $3 = $2
If Vendor Sells 7 Eggs for $1 (Like shops):
7 eggs cost = 7 × $0.10 = $0.70
Profit per sale = $1 – $0.70 = $0.30
Total number of sales = 30 eggs ÷ 7 = 4 sales (28 eggs)
Revenue = 4 × $1 = $4
2 eggs left = 2 × $0.10 = $0.20 (can be sold later or added to next sale)
Total revenue = $4 + $0.20 = $4.20
Profit = $4.20 – $3 = $1.20 per crate
Conclusion from Calculations:
Vendors make more profit per crate when selling 6 eggs for $1, but they lose customers because shops
offer more eggs (7) for the same price. So even though the profit margin is lower per crate with 7 eggs,
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the sales volume increases, leading to quicker profit. That’s why selling 6 for $1 is not working —
customers go to shops instead.
Stage 6: Evaluation and Recommendations
Evaluation Report:
The solution of adjusting pricing and improving marketing is effective. Vendors who changed their
pricing saw better customer flow. However, vendors must also consider quality, freshness, and customer
relationships to stay ahead.
Recommendations Report:
1. Vendors should sell 7 eggs for $1 like shop owners to stay competitive.
2. Vendors must buy in bulk to reduce costs and increase profits.
3. Improve visibility through signs or better location.
4. Maintain good hygiene and quality to attract regular customers.
Conclusion
The research showed that local vendors in Mkoba 9 are losing customers and profits because their
pricing strategy is poor. By adjusting prices, improving visibility, and managing stock better, vendors can
increase profits and compete with shop owners, even without paying rent or taxes.
GHOST WRYTER 0717 358 718
