|
General Asylum General audio topics that don't fit into specific categories. |
|
|
|
General Asylum General audio topics that don't fit into specific categories. |
|
In Reply to: Perhaps a course in business 101? posted by Rodney Gold on January 18, 2005 at 09:53:39:
............I found your post to be arrogant and condescending. Your gratuitous remarks; “If you are naive†& “you need a course in business†I thought were unwarranted and only highlight your ignorance to good retailing practices and good customer service.
I am certainly not going to preach to you on how I run a VERY successful business with top quality products and that I actually pay my employees! I will leave those conceited self-appraising comments to others.
Rodney, you correctly point out that “net†profit is the difference between “gross†profit less costs. This simple equation is all that is necessary for this discussion.
You hypothesize that “the minimum margin between making a profit and just changing money is 15 or 20% or whateverâ€. Disregarding the “whateverâ€, I think for the purpose of this thread it is reasonable to accept that the “break-even†margin maybe 15%-20% above cost.
However, this margin is the figure used to draw up a business plan or set and review pricing policy. The relevance of this margin is the “AVERAGE†of all goods sold in any given reported period of trading. It is NOT a figure that dictates that ALL goods must be sold ABOVE that base margin to make a profit. This is a universally accepted business principle. Your failure to be able to grasp the fundamental difference between over-all average margins and individual margins on any particular good only highlights your ignorance on the subject.
Your claim that the shop selling me a $7000 plasma screen on a margin of 9% is loosing money is fundamentally flawed in logic and in fact.
The costs of operating the business is the same regardless if I walk in the store or not. For a shop to turn down a sure sale of 9% is poor business judgment.
The shop that DID sell me the plasma did so willingly. It just so happens to be the most successful electrical retailer in the area. I have purchased tens of thousands of goods from them over the last five years. I may very well have received an exceptional “deal†on the plasma screen but I would hazard a guess that the AVERAGE margin that shop has made from my purchases over the years is well above 9%. I would hazard a guess that the dummy that turned down the 9% margin on the $7000 is ruing his decision.
In closing, I don’t believe it is good business practice to “throw†guys out of your shop because he isn’t buying goods from you. If I thought someone was buying the same goods I have but he was buying them elsewhere for cheaper I would sure as hell do everything I could to gain the guys custom. I don’t accept defeat easily and I am a little surprised at how easy a lot in this thread would “throw in the towel†and accept failure by throwing the guy out of the shop and forever lose his custom.
SmileSox
This post is made possible by the generous support of people like you and our sponsors:
Follow Ups
- Yes, you certainly need to polish your skills if your post is indicative of your business acumen. - three_sox 01/18/0522:45:24 01/18/05 (0)
Top of Page ]
[ Contact Us ]
[ Support/Wish List ]
[ Copyright © 2024, Audio Asylum, all rights reserved ]
