Posted by ikando on 1/13/12 10:51am
Msg #408943

When you only have a limited quantity to sell

As professional contractors, we NSAs only have our time to sell. I ran across a blog post (http://domainnamesales.com/sevenmile/2008-03/everybody-sells/#content) about selling a product, but it holds true for our time as well. Offered for your consideration:

"I worked for a glass manufacturer/distributor and sold crates of flat glass to assorted manufacturers. Glass (like domain names) is a commodity business. Everyone is going to need glass at some point, whether they know it or not. The guy who hired me was named Ralph. I watched Ralph in awe as he took orders and worked his calculator selling hundreds of thousands of dollars in glass, pushing buttons on his phone to get trucks moving and called on clients who seemed genuinely delighted to see him.

"Ralph was a great salesman in the pure, honest and wholesome sense. He was a facilitator and he made things happen. The most important lesson Ralph ever taught me was never to sell your product too cheaply. We’d make sales calls and very convincing glass buyers would swear up and down that the maximum they could pay for a crate of glass was .75 cents a foot. They’d threaten to purchase the product elsewhere, they swore they had a lower offer, they’d beg and cajole using the carrot and the stick. Ralph would switch the conversation to a personal tack, disarm them with his personable manner and elegantly decline to sell.

"On the drive to lunch I’d ask Ralph why he wouldn’t fill the order when we were making 20 or 30 percent margins on that ton of glass.. “Because they can easily afford to pay more” he’d reply.. “and once I sell that crate it’s gone, it will take 3 months before I get another crate.. somebody else will buy it because it’s a specialty size with low cut-loss”, and if I sell it at that price, next time he’ll ask for another nickel discount.. “

"Ralph knew his customers, he knew their business and most importantly he intimately understood the ecosystem of the pond in which he lived. Ralph knew that if he discounted this glass then his competitor wouldn’t get the order and his competitor would have to sell something else at a discount, hurting Ralph’s margins on that other product which would potentially unravel Ralph’s other orders for the other product at ‘that’ price, forcing Ralph to compete against his competitor on yet other products he wasn’t as strong in – In the final analysis, there were a dozen good reasons not to take the order at that price."

While the glass in this scenario is renewable, our time is not. I suggest we all think about that when pricing our services.

Reply by Treasure Valley Notary - Tina on 1/13/12 12:10pm
Msg #408949

Great post

GREAT ARTICLE! This is the principle that I teach in workshops throughout my area to business owners in general.

As an employee $25 / hour is a livable wage (in most areas). BUT as a business owner it will break you over time. You need to be bringing in, on average, $50 / hour to make a profit - and that is just a generality depending on your business and business plan. There are a lot of businesses that would laugh at that due to their overhead.

Tax season is upon us. It is going to be a real eye opener for many people. I still turn down more signings than I accept. IF I can't make a "profit" going out then why bother. I will just keep building our training center and network.

So look at your expenses (don't forget replacement of equipment inc car. I just had to replace my laser printer this week). Figure out what your average signing brings in (hopefully you already know that). And then what do you need to make a living on (don't forget vacations, sick days, etc).

It is not up to companies to tell us what they pay. It is up to us to tell them what we charge. I know that is easier said than done in some areas of the US, but IF your not making a profit, then why are you in business? I'm all for donating my time to organizations, but I am choosey of what kind and who they are. I'm not a non-profit organization and should not be treated like one.

These are just some thoughts for you to consider as we go into the New Year. May 2012 be the best year for you yet! And if it is not in loan signings, work on diversifying. There are other things out there that can make you money. Be creative. Things will turn around in this industry, but it is going to be very slow.

Reply by jba/fl on 1/13/12 4:14pm
Msg #408974

Great posts by both of you. Thank you. n/m

Reply by JanetK_CA on 1/15/12 7:20pm
Msg #409110

Yes, two great posts! Couldn't agree more!! n/m