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Amaradio--Fix Your Bottom Line |
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Written by Lee Amarado, Jr.
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Wednesday, 01 October 2008 |
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Page 1 of 2 When I was a kid I used to love to get ice cream at 31 Flavors—the best, most expensive ice cream around. Normally our family would go to Thrifty Drug Store to get double dips for ten cents each. 31 Flavors was a real treat with more choices Plus, their ice cream was so expensive, we rarely went there.
I remember waiting in line at both places and it seemed that business was good. People have different tastes. I could taste the difference between the two ice creams,but my brother and sister didn’t care where it came from as long as they got a double dip. I would settle for a single dip if we could go to 31 Flavors. The sole business of 31 Flavors was making and selling premium ice cream— their only product. Thrifty was in the drug store business and ice cream was sold to bring customers into their store. It would be a mistake for 31 Flavors to compete by lowering the price of their higher quality ice cream to match Thrifty’s. While both companies sold ice cream, they were in two entirely different businesses. Comparing ice cream sales would be comparing apples and oranges. It seems that collision repair shops have fallen into the trap of thinking that their main goal is to bring customers in the door without having anything to sell. Articles tell shop owners everything except how to make a profit. I have yet to read an article that says its time for you to raise your prices if you’re not making any money. Unless you do, you will never make any money. More articles say we should up-sell, cut costs and run leaner, but when you are still losing money, it is time to raise your rates. I’ve read many books on business and none have ever suggested that I sell something for less than what it cost unless it is for marketing and promotion only. If 31 Flavors started selling ice cream for the same price as Thrifty to bring in more customers, they better have more than ice cream to sell or they will go out of business quick. The collision industry sells collision repair. If we discount our services to cost, there is nothing left to make us profitable. We will have plenty of customers but still not have any money. We need to stop believing that one day we will wake up and everything will somehow be all better. Nothing will ever change until you change it and no one is going to do this for you.
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