That’s Rich! By Rich Lindblom
The retail world of today isn’t the same as it was just two or three years ago. It is constantly evolving, and as new competition springs up it is also becoming more challenging every single day.
So if you want your company to survive, you need to stay profitable. And when it’s all said and done, there are really only two ways to be more profitable:
- Increase your revenues.
- Decrease your expenses.
It may sound oversimplified, but it really is that basic. You can either figure ways to make more money or find ways to spend less. Today, I’m going to talk about decreasing your expenses, because it’s by far the easier of the two to accomplish.
Think for a moment about your company. How many customers ask you for a lower price on a product or some kind of discount on your servicesevery single day?
Now let me ask you:When was the last time you asked one of your vendors or suppliers for a discount? Maybe it’s time you started acting like one of your customers, because believe it or not, everything is negotiable!
Consider these expenses:
Repair/Install Parts: Loyalty to your suppliers does not translate into profits. You need to consider alternative suppliers who may offer a better price. What about shipping charges? Negotiate free shipping on all of your orders. How much would that save you every year?
Printing: Shop around and get prices from more than one printer. You can always find a lower price and then ask your current printer to match it. Why wouldn’t you? Loyalty doesn’t pay the bills.
Yellow Pages: If you still run Yellow Pages ads, tell them that your buying group says it’s a total waste of money and threaten to drop them completely. My old company got a nearly 90-percent discount off of the standard rate for our YP program.
Newspaper Advertising: Ask your local rep to tell you when they have a spot in the paper they need to fill. You can purchase an ad at the last minute for pennies on the dollar if you are flexible. If you do pre-printed inserts, ask them for a free run-of-press [ROP] ad every time you drop some inserts. I did and I got it. If you have more than one paper in your area, pit them against one another. Make them fightfor your business, because they will.
TV and Radio: Ask your rep to let you know when there is a deal or when they need to fill a time slot on the cheap. They will appreciate your willingness to help them out and you’ll save money in the process.
Insurance: I cannot stress this enough — shop all of your company’s insurance policies every single year. It could save you a ton of money because insurance companies typically quote teaser rates the first year or two to get you to switch to them.
Accounting & Payroll: Ask for a loyal customer discount. I cut our payroll costs by 30 percent one year simply by asking.
Utilities: Today there are alternate suppliers for gas and electricity. Check them out. How about solar or wind power for your business? A restaurant in my area put up a wind turbine and is now completely energy self-sufficient.
Phones & Internet: You should be calling your provider every six months without fail, asking if you are on the best possible plan. Check out alternate providers as well.
Credit Cards: Shop around for the best cashback rewards card and put as many of your expenses as possible on it. I found a 2-percent-on-everything card for my company and we earned thousands of dollars in cashback rewards every year.
Look, I could go on all day, but you get the idea. Go over your monthly expenses and try to figure out how to save money on each and every line item. It can be done.
And what about the merchandise we sell? Don’t worry, BrandSource does the negotiating for you on that!
Rich Lindblom is a former principal of Advanced Maytag Home Appliance Center in Schaumburg, Ill. He recently sold the 64-year-old family business and retired after four decades in independent retail. Got something on your mind? You can reach Rich at email@example.com.