I’ve been wondering lately about the success of the economic stimulus package that the folks from our nation’s capitol cobbled together. Seems like many of those checks that were to have been distributed to us taxpayers have gotten lost in the mail and “Returned to Sender” because I haven’t noticed much stimulation lately.
One thing for sure is that it is almost a toss-up now between the costs of getting a windshield installed by some desperate shops in your 30+gallon pick-up truck and/ or filling the fuel tank up. If nothing else, that has to be a sign that hard times are ahead for many.
I really can’t believe how much prices have plummeted lately when it comes to auto glass. It’s so uncanny. I profess not to have been a math major in college but darn it, things don’t seem to add up.
Let’s see; the wholesale price of glass keeps rising and we get delivery surcharges on top of the price increases. It costs us more to energize our shops, gas up our trucks and even use adhesives. The cost of living keeps rising and that puts pressure on wages making payday a stressful time for many an employer and employee.
Yet lo and behold … glass prices keep falling. How do we manage that miraculous feat?
Am I one of the few who pays for his glass? Is there an outlet somewhere that gives away free windshields that I am not aware of? It sure seems so.
Let’s repeat some Basic Economic Laws.
You are in business to make a profit. A definition of profit is the monetary surplus left to a producer or provider after deducting expenditures. If a seller discounts a product twenty 5 percent, how many more does he have to sell to profit the same? You sell 200 windshields for $200 and net $100 per lite, you make $20K. You slash $50 per shield to get more business and that basically comes right off your bottom line. You now have to install 400 windshields to make your same $20,000. You wonder if any of the financial mavens at Diamond Glass, for instance, ever passed Accounting 101.
I’ve heard some of you out there are doing installs for beer money. Thanks to all of you that only know the way to capture business is by addictive discounting. If you think this is the real-life version of “Survivor,” let me be the first to vote you price slashers permanently off of the island. I have yet to find a hack outfit that is really consumer friendly. They use the cheapest glass, inexpensive, slow safedrive-away time urethanes, generic mouldings and usually some of the most unqualified or ignorant labor around. (Primer?? We don’t need no stinking primer!!) The result of that bargain transaction is merely a time bomb awaiting ignition. The buyer can and most likely will suffer somewhere down the line.
The best economic stimulus package you could create for your business is to make sustainable profits. If not, you are only postponing the inevitable failure and probably hastening others. The mentality of “I have to get this job at any price” has ruled in so many quarters within this industry for so long, it has rendered many shops into a survival mode since inception. They may be “busy,” but they are a mere step ahead of the financial grim reaper.
Here are two free bits of advice I’ll give my fellow shop owners.
Work on your business as well as working in it.
Do strategic planning. Strategic planning is not thinking about what discount you’ll offer when your phone rings next.
I understand completely the concerns and plight of the hard-pressed American consumer out there. I’m one too. We as an industry would be doing the greatest service to them by simply doing our job correctly at a fair price with no corners cut. The worn cliché of “You get what you pay for” is a truism that has been forgotten by too many consumers that use our craft.One other way to perhaps enhance your financial success is to hope that your property is sitting on an untapped oil deposit or that you could try to find the same guy who lent a certain glass company almost a $100 million dollars with almost no tangible assets.
