Professional_Distributor_December_2020 - 24

" Wow, do I have a deal for you! "

Is it your enthusiasm that makes the sale or the latest pricing deal?

Now, this sounds all well and good, but what if you
very five to six weeks, mobile jobbers everydiscount the product to your technician customers?
where receive brochures for the upcoming
By discounting the $225 set by 12 percent your
promotional period. This event is either prenew
selling price is $198.00. This is a good selling
ceded or shortly followed up by a district managprice,
since you're now below the desirable $200
er meeting, which in the current climate is likely
price point.
a Zoom event. At this event hopefully your DM
With your purchase price discount of 12 percent
is
providing
you
not
only
with
product
informaBY ALAN SIPE
your new cost is $118.80 and if your sell is $198.00
tion,
but
also
some
presentation
ideas
to
help
sell
CONTRIBUTING EDITOR
you're still earning a GM of 40 percent but your GP
these products.
Alan W. Sipe has spent the last 42
dollars are only $79.80. So if you pass the discount
The
items
highlighted
in
these
brochures
are
years in the basic hand tool industry
along to your customers this promotion will cost
including positions as president of the very same items the company, whose name is
KNIPEX Tools North America, senior on the side of your truck, wants you to push during
you $10.20 for every set you sell.
vice president of sales and marketIf you usually sell one screwdriver set per week
ing at Klein Tools, manager of special this promotional period. You'll also receive broat $225 in a normal 5-week period you would
markets at Stanley Tools, and sales chures from the major WDs with their upcoming
manager at toolbox manufacturer promotional products. In most cases you'll receive
gross $1,125.00 and earn a GP of $450. If during
Waterloo Industries. Currently, Sipe
this same 5-week period you sell your normal 5
a
discount
of
12
to
15
percent
on
those
items,
and
is the owner of Toolbox Sales and
sets, plus 3 additional sets at $198, you would
Consulting, a company specializing maybe even some extended dating terms on what's
in sales strategy, structure, devel- being pushed this month.
gross $1,584.00 and earn a
opment, and training. Sipe can be
GP
of $638.40. That's a nice
The products presentreached at alansipe@gmail.com or
$188.40
bump in GP during
847-910-1063. ed on these promotional
" For every sale you
that
period!
brochures are normally
miss because you're too
However, if you look at it
a mix of tried-and-true
another
way you can really
sellers with some new-toenthusiastic, you will miss a
make this promotion a winmarket offerings. Maybe
hundred because you're not ner for you.
it's something you already
We all know that you
have too many of in your
enthusiastic enough. "
can
go to The Home Depot
inventory. Maybe it's what
and
buy
a pretty nice screwwe in the business refer
- Zig Ziglar
driver
set
for $45-$50. So if
to as a " dog " . We all have
you have a technician who's
heard the old saying that
going to pay $198 for a great screwdriver set, that
if you put lipstick on a pig, it is still at pig. Well the
person will most likely pay the $225 - especially if
same goes for putting a discount on a dog; it is still
you tote the note for 5-6 weeks. Therefore, if you
a dog! Beware.
buy the sets at the discounted $118.80 cost and put
Let's take a financial look at promotions and
the extra margin dollars in your pocket, you'll now
see if they are worth it and if so, how to make them
make $106.20 per set or a GM of 47 percent.
pay off for you.
Selling at a discount feels good and is music to
Your major brand name has a 10-piece screwcustomers' ears, but putting the extra $16.20 per set
driver set that has a list price of $225.00. If it is a
in your pocket sounds best. This is especially true
40 percent margin item for you, your normal cost
if the customer would have bought at the normal
is $135.00. Your gross profit (GP) if sold at list is
list price anyway.
$90, and your gross margin (GM) is the 40 percent.
Additionally, make darn sure you only stock up
If the upcoming promotion offers you a twelve
heavily
on products that you know you can really
percent discount, your new cost would be $118.80.
move.
Otherwise,
you may end up with your money
And if you sell the set at list price you will now make
tied
up
in
some
pigs
with lipstick riding around in
$105.20. This jumps your GM up to 47.2 percent;
the back of your truck.
this is an 18 percent GM improvement or $16.20.
24 Professional Distributor I December 2020 I VehicleServicePros.com

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