Just Say No to Discounts

I am writing this to demonstrate to you how gross profits can EASILY be increased. I spent the time to write this because there is a very valuable lesson to be learned. Please read it careful and read it all (LISA!) See if you can learn something useful and permanent from it.

A Mexican Pawn Shop owner from over the border (a friend of Micha’s) came in and saw a Bell and Ross. Liz helped him. They negotiated (retail $6000 down to $4300 + tax) and he left. He called Micha later and asked Micha to get it for $4000 no tax. Micha asked me to sell it to him and he would sell it to the guy for the same $4000.

I was tempted to do it as:

1. It was a friend of Micha’s.
2. Micha asked me to do it and he helps us all the time.
3. We were making a profit and the guy was a “semi-dealer,” as all pawn shop guys are.

Then I asked Micha if the guy was buying it for himself or resale? Micha answered, “For himself.” This point didn’t really matter, but I wanted to know.

I decided to make extra money, even though it would have been easier to just give in because of 1-3 above. I told Micha, “No deal. He needs to pay the $4300 because:

1. These watches are back ordered.
2. We can’t get another and if someone comes in tomorrow, willing to pay retail, we miss out.
3. Why should I give up my profit, after spending money to stock this watch, just because the guy knows you?
4. He will pay the price, be happy and we will all be happy.

I said exactly those words to Micha. It took me lees than five minutes to think the thoughts and say the words.

Micha called back in 4 minutes and said OK. The guy was at our door with the cash 10 minutes later, meaning he was already on his way to buy it when Micha called. (The cheap punk!)

The lesson

Just saying, “No!” with a logical reason behind it can pay HUGE rewards by increasing your GP.

We went from $1000 GP to $1300 GP with an investment of 5 minutes thought and conversation. A 30% increase in GP for 5 minutes work. And because I wasn’t lazy or influenced by “good reasons to discount.”

Most, not all, of you have called me before with VERY GOOD REASONS to discount, such as, “He is a good customer,” “He refers people,” “He can get it on the int ernet,” “He is purple and purple people are popular.” (That last one was meant to be a catch all for all the other “good reasons” you, and the customers, have given for heavy discounts.)

In most cases there are really NO GOOD REASONS for heavy discounts.

Now, did anyone learn anything from this? How about, “Just say NO when a good reason is given and see what happens. You can always come back to them “after checking with the boss” if they still say no to your NO. But please be believable and serious when you say NO. That is probably the most important part.

Serious and believable. Serious and believable will make you money.

Now just do a quick math problem on your own commissions. How much more money would you make if your GP went up 30 percent? Three hundred dollars on the customer’s side was less than 10% of the sale price. Anyone who wants something will pay 10% more for it. Look at how much more people pay for beer at restaurants and ball games! 200-500% that’s how much!

I hope that each of you learned something and will use it in the future for the profit of us all. Nancy says, “Just say NO to drugs!” Leo says, “Just say NO to discounts!” at least a few times.