At 01:36 PM 10/1/2001 -0400, Michael N. Marcus wrote:
>> do you know what's really bad for business?
>> Your published give away prices on your website
>> I know what your response is going be,
>
>Maybe you don't know...
>
>We don't give phone systems away, Harry.
>
>Please don't confuse AbleComm with sucidal dealers who have no respect for
>the products or themselves and sell at "P-price" or below.
I have two (acutoally 8) distinct profit centers in my business, that which
comes from sales of material and that which comes from labor. Labor is
easy to figure, Gross profit is 100%. New phones, Used phones, Jacks,
Accessories have pretty distinct markups..and sometimes new phones will
vary by 10%. Experience has taught me that if I can't get a MINIMUM 1.3
mark on material, there's little reason to bring it into stock.
Many newcomers will be lazy enough to not do homework and use either a
spreadsheet or accounting program that marks up products by some
multiplier.... Then they don't understand that they seem to be losing
money. A classic example: in 1987 I bought out a guy who marked up
everything 1.5. Even the jacks I asked? Yes, but it turned out that our
prices were the same. He was paying nearly $3 for a 625-A! jack. (I guess
if you buy them 5-10 at a time that's what you have to pay :-). It
concerned me because I wasn't going to cut my price to $1.60 for a $4 part.
>When we sell to do-it-yourselfers we charge less than when we are
>responsible for onsite service, but we are not embarassed to make a profit.
I have customers who flash the "internet price" at me and ask me to match
it. I tell them that Ablecomm marks up about 1.2 and I need 1.3 and, yes,
I'll do it for 1.3 with no support and all labor is T&M. Some customers do
opt for that and it really works out O.K. Of course, the "Dash for Cash"
rebates and any other perks NEVER, EVER, get passed on to the customer.
>We don't get into price wars. Competing only on price is ultimately
>suicidal, and it is no good for our families or our customers if we can't
>afford to stay in business.
>
>We compete on our overall mix of price/service/selection/info/reputation,
>etc.
>
>This month we celebrate our 24th anniversary in the phone business. Very few
>phone system vendors have been in business that long. We are both pioneers
>and survivors.
Just a baby...Next April will be 30 in telecomm and 21 as an Interconnect.
The newbies who have never seen a 1A2 are the most fun. Government
agencies and stock brokers still use it today for the reliability.
Carl Navarro
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