First, after an uninterrupted string of boom years, suddenly, 2008 sales are flat. That means that the annual sales and profit growth to which we have become accustomed won’t come from its usual source this year.
For quite a while now, the old adage that a rising tide lifts all boats in the harbor has applied to our businesses, but it will be some time before that situation kicks in again.
Gloom and doom? Hardly! But, we’re all going to be required to be smarter and more profit oriented in 2008 than we have been and look for ways to make more profit on existing sales.
Old friend Dave Scheer of Inland Truck Parts was telling me he’s looking long and hard at Inland’s sales in terms of margins and not as much in terms of sales growth opportunities, as in the past.
For his company, that could well mean more emphasis on service and service-related parts sales, not direct-to-fleet parts sales.
That concept could well apply to you, too. In a service sale, within reason you control the price at which you sell a part, not the customer. That’s also true to a lesser extent on over-the-counter parts sales.
The customer has come a long way to get a part and he doesn’t want to leave empty handed. But be careful – there are other places he can go next time for both service and parts, so your pricing must be fair.
