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General Asylum General audio topics that don't fit into specific categories. |
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General Asylum General audio topics that don't fit into specific categories. |
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In Reply to: Re: Dealers, STOP WHINING posted by ghasley on February 15, 2007 at 10:00:21:
You say, "I would contend that there exists an amount of time and/or effort to make a sale whereby the sale itself is actually DETRIMENTAL to the business." Yes, this is true under certain conditions and it's up to the dealer determine when they apply.In the purest economic terms, if the incremental cost of completing the sale is greater than the incremental revenue arising from the sale, then the dealer should not attempt the sale. Cool, so what does that mean?
I'm sure you'll argee that "time and/or effort" cost nothing if the dealer or staff are just standing around. If the dealer has to pay the salesperson overtime to serve a particular customer, then there is an incremental cost. The most common circumstance of incremental cost is "opportunity cost", that is, where spending time with one customer might prevent a sale to another customer. Also, if a component has to be opened and becomes floor or demo model that can only be sold at lower cost, that too becomes an incremental cost -- but only if the component wasn't eventually going to be demo anyway.
The incremental revenue is often the markup of the product, but this isn't always the case. If the dealer cannot return a product or cannot do so for full refund, then the incremental cost become the full cost to the dealer less the refund if any --this is often much more than the markup. But wait! the incremental revenue he stands to loose is potentially more than even this in the longer term.
By refusing to demo a product and/or being rude to a customer he suspects will buy elsewhere, he may come out ahead in the short run, but loose in the long run -- especially if that customer condemns the dealer to other potential customers: bad word travels fast. This is usually the most important consideration but the dealer will decide.
Bill Bailey
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See my stereo config ... but always looking for cost effective improvements
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Follow Ups
- Tactics are up to the dealer - Feanor 11:46:17 02/15/07 (0)
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