By Mo Yusuff Millennials. Related posts: Personal Relationships Through Promotional Products Best Promotional Products for You Our Promotional Products’...
21st February 2019
By Mo Yusuff
“They won’t pay anymore. They’ll go elsewhere.”
I kinda agreed with him and told him that would probably be the best thing that could ever happen.
This guy was interested in selling his promotional merchandise business to us a few years back.
I asked him to send over his registered accounts for the last three years so I could see if there was any mutual benefit. And what I saw honestly made me smile.
He’d sent over profit and loss figures for the last eight years. Net profits looked good at over 25% of turnover, until I saw a note at the bottom of the page. It said:
“*excludes director’s costs: salary, motor expenses, drawings, and rent figure put down for own property. Also excludes accountant’s goodwill & amortisation figure.”
So I called him up for a chat and asked him why he excluded the rent. His reason was because he owns the property and therefore it wasn’t an actual cost to him, although he does withdraw a sum equivalent to what the rent would likely be.
I then asked him the value of his salary and expenses and he said:
“It’s whatever left after all the other costs.”
“So you don’t actually make a profit then?” I suggested.
He was adamant he made good profits and mentioned with pride his biggest customer.
It was a University organisation that ordered clothing and other promotional products from him at dirt-cheap prices. He was proud that he had such a big customer that accounted for over half his business.
But he had a big problem.
This customer of his demanded a huge amount of his time and demanded low prices too. He was working on suicidally low margins and insisted;
“They won’t pay anymore. I can’t charge them more because they’ll go elsewhere.”
And when I explained we wouldn’t be a good fit and therefore I’m not interested in his business, he asked me what he needed to do for us to be able to somehow work together.
I turned him down a second time when my advice to either charge his biggest customer more or sack them, led to cries of, “I can’t do that.”
He didn’t understand that you have a choice who you deal with and he should be running his business rather than his customers.
Anyway because we don’t have price buyers as customers we tend to be able to spoil them a bit from time to time and offer them things maybe some promotional merchandise companies don’t.
Like a helping hand to completely overhaul their ranges of promotional products, easing out the less effective, well-worn products and replacing them with new, exciting, useful stuff that’ll wow their customers and keep them coming back for more.
And here’s the good news. We are a group of promotional product experts that offers free and friendly advice. Take advantage by calling us now at 020 3221 1990 or by going here and pop your details and we’ll get back to you soonest.