About Doing Business

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In the Blog that we wrote about “marketing your product” we mentioned that we called our panels “Anglewood Products” but we failed to mention the importance of giving your product a name.  Even if ” Mary Jones ” is just making bread for the Village she should name it Mary’s Home Made Bread.  Hopefully something more imaginative than that but you get the idea.

Another thing, the accounts your have or want to have quote them a “cost landed price” .  Meaning that you add the freight costs into the cost of the product so when the stuff lands at your client’s place all they have to do is sign the bill of lading.  Your customers will really like it.  But you may have a bonus too.   Forget about Canada Post and US Post but if you are dealing with a commercial carrier and you prepay you establish yourself as a shipper.  If you ship frequently enough you will get a discount on the shipping costs.

If the competition is not too stiff you may be able to do a little averaging with your shipping costs by charging closer accounts a little more for freight and use the savings to help you lengthen your radius of operation by charging farther accounts less.

The product we were selling, wood panels with the bark on could only be cut six months of the year, in that time we had to get a year supply.  So we increased our warehouse size and then we got a bright idea.  We had a 9 meter Catalac catamaran moored on the Sunshine Coast, BC and thought that sailing in the summer was the way to go.  We told all  our customers if they would buy a 90 day supply that they didn’t have to pay for 90 days.  We thought the stock may as well sit in their warehouse as ours.  Our customers liked the idea and they almost all purchased quite a bit more than if it was a regular order.  Now you don’t have to go sailing to offer extended payment time.  For trusted customers you can make that offer any time.

Packaging can be expensive.  If you are using cardboard for packaging two good sources of supply are furniture stores and auto body shops.  If you tell them you want cardboard they will save it for you.  But when they call you have to go and get it or they will pitch it out right away.   In some jurisdictions cardboard disposal is a problem.  If you are in one of these areas your will find possessors of cardboard very easy to deal with.  When we talk about savings like this there is an assumption that your are a single or partner operation doing all of your own work.  If you are hiring people it may not work that well.

If you make valuable art or other high priced items often financing is necessary.  Most people are not set up to do a lot of their own financing but at the same time if financing is not available the sale may disappear. If you have a good credit union or a community bank they may provide financing for your customer.  But be careful make sure the financing is “without recourse” meaning if your customer fails to make the payments that you are not liable to return the money to the lending agency.  There are companies that will buy your sales contract and pay you out and then collect from your customer.  If you become a steady customer they will often give you a participation bonus on your patronage.

 

 

 

 

 

4 Comments

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    • Thank you! Sonia and I have owned quite a few small businesses and then we became economic development consultants to help others. It makes us happy that we can help.

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