Greg, etal Materials aside, this is why I have be advocating to follow your thoughts a bit further. Knowing that HD (or equal) will eventually sell all (or most) of the products we offer within the next 5 years, why not focus on making profit dollars on labor? It is interesting to me that we as an industry, will grouse about pricing of materials as a way to make extra money (or make it less transparent to the customer), but dismiss the idea of charging more for labor, as the "going rate trap", we set for ourselves. Demystify this for the consumer. If they want to see you around in the future to service their equipment you just installed, there is a genuine connection to them and they don't want to be left behind for service or repairing the equipment.
Why not charge the right price for labor, as you evaluated we will have less margins contributing from materials. Start now and avoid the margin compression later. I always wonder how many wrenches are prepared for anything other that the next install- no offense- what I am referring to is retirement and paying our people well to name a few. How about sending our children to better schools and soccer camp? How about taking care of our significant others for all of their dedication and support all of the years watching us have expensive, time consuming "hobbies", like installing solar. I'm not suggesting stopping the pro bono work, but look to the field we have chosen and be "in business". Profit is not a dirty word, but being out of business or being on the "system" for support could fair worse without any planning. There is also the impending growth in our field, which will mean more competition, so lets take the medicine now and get more folks educated. The collective public that is not in business, has not had the training in what it costs to keep the lights on every day or create a budget. It is patently clear to me, that we need this training, equally as much as understanding 690 or 310.16 if we are to prosper and not just thrive. This is evident in a CNN story last night- http://www.cnn.com/2009/LIVING/wayoflife/05/06/credit.cards/index.html Clearly there is a gap and consumption outstrips the rational mind and it appears contagious. Burying our calculators in the sand will do little for the people we are responsible for. Attached is a simple way to look at what you are currently doing and determine if you need to make adjustments. Sure, you can make $ on materials, but lets suggest for a moment all of our customers will be going to HD to buy the majority of the equipment or the level of transparency on material costs becomes Darwinian. If we are in the sustainability business, can't we also be financially sustainable and make it a tenet for our constituency? If I have picqued your interest, contact me off list. I am, for the record, not suggesting any kind of antitrust price fixing, but deleveraging the misnomers. Keith ________________________________ From: "g...@remotepowerinc.com" <g...@remotepowerinc.com> To: re-wrenches@lists.re-wrenches.org Sent: Thursday, May 7, 2009 8:54:07 AM Subject: [RE-wrenches] Housekeeping stuff Regarding discussing pricing on this publicly viewed list: It's just unprofessional. I never met a wholesaler or manufacturer that wanted me to tell the public the wholesale price I was paying for their products. Also, telling the public your cost can only do you and your business harm. Joe Public will figure - "why should I pay X% more for this product?" - without considering that a good dealer/installer pays for licensing, liability insurance, workers comp, good wages to get and keep good employees, the cost of tuition, transportation, lodging and tuition for employees, etc. Joe Public does not know the difference between gross profit and net profit, and NEVER will. As small business persons we are all at a disadvantage to the big box stores who inevitably will sell everything. I think by allowing prices to be discussed publicly pm this list, we're shooting ourselves in the foot - making our own long term survival harder. It seems like this all should be common knowledge to any professional in any retail business. Greg Egan Remote Power Inc. _______________________________________________ List sponsored by Home Power magazine List Address: RE-wrenches@lists.re-wrenches.org Options & settings: http://lists.re-wrenches.org/options.cgi/re-wrenches-re-wrenches.org List-Archive: http://lists.re-wrenches.org/pipermail/re-wrenches-re-wrenches.org List rules & etiquette: www.re-wrenches.org/etiquette.htm Check out participant bios: www.members.re-wrenches.org
What things really cost-Biz owner- 07MAY09.pdf
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