Letters to the Editor . . . (February 01, 2008)

Hello Andrew,

I read your “Three Rules of Profit” article today (CounterTalk, December ’07). I have seen these numbers before and it still amazes my staff and myself when I show them the effects of discounting. It is a very fine line we walk when we make that decision to discount or take the chance of losing a sale. The reason I am writing is I would like to see you publish the same type of article showing the effects of shops shaving point 1 or point 2 off of flat rates, and the effect it has on their profits, [and also] the effects of raising labour rates a couple of dollars. I know your publication is called Jobber News, but I think it would give salespeople a great tool to work with their shops. I have read articles before on the subject, but your formulas were simple and easy to follow for the average counterperson. I am in the Windsor area and a lot of shops are cutting labour to get jobs. I try to explain to shops that if you charge a little more, you can afford to lose the odd job if you look at the big picture. I use the following example:

10 jobs @$300 average ticket = $3000

9 jobs @$350 average ticket = $3150 (assuming you lost one because of price) 8 jobs @$350 average ticket = $2800 (assuming you lost two because of price). You are $200 short on gross, but if you put two more profitable jobs back in the bay, the increase is huge.

Greg Guyitt Owner, Carquest Essex