Ways to Increase Your Profit Margin (Part 2)
Hopefully you have found some success by implementing our profit-building ideas from our last post. If not, take some time this morning and figure out a plan to start making more money. In this post, we are going to talk about 1 really easy way to improve profits that you can do this afternoon and start seeing the benefits by tomorrow!
Make Sure All Your Remnants Have Prices!!!
Most shops we work with don’t put prices on the remnants in their slab yards. Clients browse the slab yard and the sales people end up give them a rock bottom steal-of-a-deal, unbeknownst to the owner. One shop we work with does price each remnant and it has worked well for them. The sales person assigned with the task of pricing the remnants was annoyed he had to do every single remnant; and his frustration manifest itself through higher remnant prices. Then a weird thing happened. They were able to sell the remnants at those higher prices. Prices that they normally wouldn’t have asked for when it was just the customer and them talking in the slab yard. We think the customer felt better because they thought the listed prices were set and that everyone coming to the slab yard got the same deal as everyone else. We have found that other shops, have the owners do the pricing to make sure their salespeople aren’t giving away the farm every time they take a customer to the remnant yard.
Stock Sinks In Your Inventory
Choosing to warehouse a stockpile of your most popular sinks can be a decision some of the shop owners we work with don’t like to make. On the one hand space is usually at a premium with our customers and on the other there’s the possibility of being left with a bunch of sinks no one wants to buy. These are both valid concerns, but it is hard to argue with the savings you get when you buy in bulk. Buying a single sink for a customer can cost you upwards of $300 for a single purchase, but buying a pallet of sinks can often bring that cost down to under $140 or so. Obviously you don’t want to do this with very decorative or wild sinks that have sporadic demand, but for your run of the mill stainless steel 50/50 bowl that you’re putting in 300 kitchens a year it can make sense to buy in bulk. Imported sinks are available by many suppliers. These sinks are not brand-name type, and the quality of this sinks may not be equal to those of high-end name brands, but often customers choose these sinks after we show them the difference between the two because they want to save money. Sink accessories are also available, including little grate and strainers that goes in the bottom of the sink.
Don’t Give Your Money Away!
Remember not to fall into the trap that money-losing owners often do. Just because you are paying less for the sinks, doesn’t mean you should charge less for them! While you are saving a ton of money on each sink, you still have costs that go with holding that inventory. Another big mistake poor owners make is telling their salespeople that their costs have gone down, and then the salespeople are all too eager to pass “all those savings on to the customer.” This doesn’t land you more business, it just takes money out of your pocket.
So, do yourself a favor and put those extra dollars in your pocket.