An occasional C-note can make your P&L smile

By Gordon Hecht, Contributor

It was almost 60 years ago that director Sergio Leone paid a young Clint Eastwood $15,000 for his first starring film role. The movie was “Per Un Pugno Di Dollari”; you may know it better as “A Fistful of Dollars.” It was the first of a genre later known as spaghetti westerns — cowboy shoot ’em ups filmed in Italy.

The picture was a hit worldwide and was followed by “For a Few Dollars More.”* Faithful readers of this column will know that our goal is to help you grab a fistful of dollars. Those bucks come from good marketing, an exciting retail environment, a selling process and legendary operations. But we live in a retail world of slim margins and at the end of the year, the difference between red and black ink may come from your ability to grab just a few dollars more. You don’t need a gold mine; an extra double sawbuck or C-note once in a while can make your P&L smile. Here are some suggestions:

Yes, Money Down! For most of this century you’ve been able to provide no-money-down financing for your shoppers. Bank charges were skinny, but they’ve put on some weight in the last couple of years. When you offer 18-month no-interest financing, the bank is keeping about 10% of your sale. On 60 months it’s more than double that.

That means for every $100 at retail, you pay $20 to the bank. Sure, it’s a cost of doing business. But you can reduce that cost easily with two simple steps:

  • Collect sales tax and a delivery charge on every financed order.
  • Ask or require 10% down on any financed order.

On a typical $2,000 order with 7% tax and an $80 delivery charge, just getting tax and delivery as a down payment will save you $44 in bank charges. An additional 10% down saves you $40 more. My high-level math class at Sagebrush State taught me that it’s about $84 right to the bottom line. Plus getting money down solidifies your sale. People looking to spend $2,000 have the money for the down stroke. Just ask.

Free Delivery Ain’t Free! If you are looking for a sign that you need to end free delivery, look no further than gas prices at your local Gas ’n Go or Stop ’n Rob. It’s closer to $4 a gallon than $3 in most states. Diesel is back over $4 almost everywhere.

Delivery costs go beyond fuel. Add in your labor, truck maintenance and insurance, and chances are good that it costs you about $50 to make a stop.

You might need to toss in a no-charge delivery to close a deal occasionally, but it’s just no longer affordable to throw pictures of U.S. Grant out of the window on every sale. Delivery charge is like any other item in your shop — it needs to be sold by building value and convenience.

Think about a three-tier menu:

  • Full-service delivery, setup, assembly and removal: $79
  • Mattress-only delivery placed in room: $59
  • Door-step delivery, brought inside the threshold: $29

Set your own price and service level. At the very least, collect $20 to cover the cost of fuel. When you generate $60 on average for 200 annual deliveries, you are adding $12,000 to the plus side.

Debit is less debt. I’ll admit it, it took me two tries to get through accounting class at ol’ Tumbleweed Tech. I could never figure out the debits from the credits from the rabbits. Lucky for me that my ever-lovin’ bride manages the checkbook.

Credit card fees have gotten out of whack! Really look your next statement over. I’ll bet you are in for about 4% total, no matter what your bank is telling you. There are loyalty fees, bank fees and enough extra charges to embarrass a ticket reseller!

Here are two quick actions you can take today:

  • Reach out to your bank card processor to request a debit card option. Those cards work off of a flat fee, often about $1.
  • Shop around for the best fees. Many processors will audit your current charges to see if they can provide a lower cost (look for those added charges).

Every half a percent counts. That little .50% only totals up to $2,500 a year. But it’s your $2,500. Why give it away?

Reducing costs and increasing your charges for valuable services works. “A Fistful of Dollars” was produced for $200,000 and generated $20 million in ticket sales. Rather good money for a bunch of spaghetti.

*Eastwood’s “Man with No Name” trilogy was completed with “The Good, the Bad and the Ugly.” You’ve heard the expression a million times and its Ennio Morricone theme song has become synonymous with Mexican standoffs.

Gordon Hecht is a business growth and development consultant to the retail home furnishings industry and a regular contributor to YSN. You can reach him at

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