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Original thread:
Post 49 made on Wednesday June 8, 2016 at 12:17
FP Crazy
Super Member
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June 2003
2,940
On June 7, 2016 at 11:44, fcwilt said...
The most valuable thing you have going for your is your time and skills.

Anybody can buy and resell a piece of hardware

But you are unique and can market that.

Get paid for your time - don't worry about making money on hardware.

I would be more than happy with this business model, except that most customers are not emotionally mature enough to swallow labor rates comparable to what they might pay an attorney and also being charged for every waking minute related to the job.

Profit on equipment subsidizes many things. One of those most important things is stocking replacement remotes (or other equipment). If you sell it at cost, how can one justify stocking them at cost? And I stock multiple models, since one size doesn't always fit all.

Granted, I don't stock everything I sell but I feel stocking remotes is critical to this subset of our business model. My mantra to my customer is getting them back up in running with a replacement remote within 24 hours (since their system is typically not functional with a dead remote)

The other is minor service calls after the sale... to tweak or make minor changes...or to replace/repair item you provided breaks within the first year (hell, even the first 90 days). Many of us eat those quickie service calls (call it customer good will). Equipment profits subsidize this too.

A business either needs to have equipment profits to fund this reality, or double their labor rates (or more) and charge for every minute involved (like a lawyer). There is no free lunch.

As our industry margins get thinner and our industry's business' evolve, customer's emotional maturity is not evolving at the same rate. So realistically we have to wait until the customer can catch up to this reality and allow us to sell at cost and commensurately increase our labor rates and bill accordingly.

Anyone that can't grasp this concept, has either never been in business or needs to take off their shoes so they can count higher.
Chasing Ernie's post count, one useless post at a time.


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