Diana is a traveling sock saleswoman. She purchases inventory from five large producers based in Sliven and spends four days per week traveling to several regional, open-air markets. Her “sales territory” extends east to the Black Sea, south to the Turkish border, and west to Stara Zagora, in the center of Bulgaria. Diana charters a minivan with five other Sliven-based traveling merchants, who sell shoes, tracksuits and other apparel.
The unit economics of Diana’s business are fairly straightforward. She purchases socks for the local equivalent of $0.20-$0.30 and sells them at 2x – 3x their cost. Diana sells between 300 and 400 of pairs per month, with a gross profit of approximately $200. After paying out her share of the minivan, she nets around $150.
Diana has requested this loan for two reasons. First, she is looking to expand the breadth of her inventory. Right now, she only has money to carry some of the more basic sock styles, and believes she could sell more if she had a broader inventory. Second, Diana wants to purchase an overhead sign for her booth in order to attract more attention and develop a brand, as well as provide cover for her products when it rains. Currently, she covers her socks with plastic during inclement weather, but realizes that potential clients purchase more when they can easily browse merchandise; a plastic covering prevents that.
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