Sales, and how saving people money still makes you the bad guy.

Posted Friday, July 8, 2011

A lot of new business people fall into the trap of trying to be too nice to everyone. Unfortunately, sometimes I fall for that, four years into this.

I pay nearly $4000/mo for a warehouse & repair shop 2 blocks from Penn Station, and for assistant workers in the operation of the supply and repair company. I also make parts orders which are anywhere from $9000-$40000/pop. It’s expensive to be us in this area.

We still manage to have lower pricing for the services offered here and parts the supply company sells than anyone in a 20 mile radius, and often, than anyone in the continental U.S. You’d think considering the expense involved, this would be appreciated at times. However, there are people out there so offended that service, time, and parts are not offered for free that they will bitch, moan, run guilt trips and do whatever they can to try and get something for nothing. Allow me to explain.

Sometimes, on rare occasion, I run sales that lose the company money. A repair will be offered at cost via eBay: after return shipping to the customer, we lose money on it. I’m fine with this because it promotes the business and lets people know we exist, and sometimes, I like giving a select few something for nothing. Like a raffle.

The problem occurs when the sale ends. A flurry of angry phone calls from people who think we am trying to rip them off come in, and we get angry customers walking in a week or two after it ended wondering why it isn’t still running. This troubles me when it is mentioned that it is a sale price. Frankly, I don’t care if you’re in California and think the sale should still run. If I left the office 2 hours ago, it’s done. We don’t post times, we don’t commit to lengths. A sale runs and then it’s done. If you want to get the price, don’t wait.

If I notice the LP133WX2-TLG6 is 30% cheaper today than usual, I don’t wait two weeks, then come back storming mad when it’s back at regular pricing. I call my banker, use a temporary line of credit, buy all of them and thank the lucky stars the deal made itself available to me. Those who wait lose.

Sales don’t last forever. People can’t run companies for free, forever. When it ends, it ends. Large companies have 15% off coupons on occasion.When it ends – they sometimes let a few customers use them anyway, and that’s cool. The difference here is that the large company is selling you a product at 400%-1600% markup, so even if they give you 50% off – they’re still profiting and making good money off you.  When we offer products at 7-20% markup and offer 50% off, we’re not profiting less – we’re losing. The large company’s sale is the difference between making tons of money and making regular money. Our company’s sales are the difference between making pennies, and losing money.

Some get very angry when a sale ends. It’s interesting to see how angry a few people were that a sale of $110 on something typically $160 ended. Looking at the advertisements for five other local companies at the top of Google at the moment, in this area, gets me $250, $350, $250, $200, and $419 respectively. Our advertised price for this service on this website and others has always been $160. The price you hear when you call is always $160 – it doesn’t change upward, even if the part cost doubles. We are not dishonoring a price when we go back to the original price, because we never advertised the sale as permanent. The price to honor is $160. It is by discretion whether it will be less at any point in time.

I’ve never been one to live a lifestyle of “nice guys finish last” just because of bad experiences or bad Apples. My living is made off of bad Apples!  Cracked ones in particular. This is why I don’t publicly advertise or have an official, in writing warranty policy if you broke your shit twice that it’ll get done again for free. People will take advantage, especially on this block. It’s nice, as a small business owner, to have discretion over who you will go above and beyond to, lose money over, or put effort into when it is not expected, asked for, or feasible.

So, in ending, here’s why I think it’s bullshit when people call in angry about an ended sale:

  • 99.9% of the time, our service is the cheapest in the continental U.S. Sometimes by a little  bit, and sometimes by a huge margin.
  • Sales do not have guaranteed running times.
  • We make less money at full price than other companies do when they run large sales. Be appreciative of that and don’t go digging for more.

That’s it for today.