Sales are
good!
money home with you at the end of the
year. These suggestions will really be
more about managing your finances
than your marketing.
Sales are
important,
but PROFIT is
ESSENTIAL!
By: Ricky Brooks, RNK Distributing
I
n the last two articles we have
discussed the difference in marketing
and advertising, and how to increase
sales without increasing the advertising
budget. In this article we will discuss
marketing that not only increases sales,
but rather sales that are profitable.
How many times have you seen a busness
that grew so fast they went out of business?
Their sales were increasing at an
astronomical rate, they were taking in
more money than ever, they were growing
by leaps and bounds, but the next thing
you knew there was a CLOSED sign in
the window. All too often making sales is
confused with making a profit. Everyone
has heard the story about the truck
farmer who was selling his potatoes
faster than he could haul them to town.
One day a neighbor asked him how
much profit he was making. The farmer
had not given any consideration to this
question until then. Once he analyzed
his cost and selling price he realized
he had paid more to grow the potatoes
than he was selling them for. The farmer
scratched his head and said I’m losing
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about $100.00 per truck load. The
neighbor asked, what are you going to
do? The farmer said with a big smile, I’ll
buy a bigger truck!
As unbelievable and amusing as UIJT
story is, there was a time when
I was one of those business owners
shopping for a bigger truck and there are
probably many shopping today. One of
the fatal mistakes often made by owners
of a failing business is to open more
locations. Just like the farmer, they
believe they can make a profit if they
only had more overhead and the ability
to sell more products below or near
cost. Unfortunately, manufacturers and
distributors tend to feed this philosophy
of “stack it high, price it low, and let it
go”! Many have criticized retailers who
actually insist they must make a sizable
profit margin.
I want to make sure you hear this loud
and clear. Sales are good! Sales are
important, but PROFIT is ESSENTIAL!
So this article will focus not only on taking
in more money, but taking more of that
Let’s review. We have established that
good marketing is anything that creates
a positive perception of your business.
You have the best prices, you offer
the best selection, you have the best
educational support, you have the best
service department, and on, and on.
All of these things are important, and
you must achieve this perception to be
successful. We also learned you can
increase sales simply by increasing the
amount you sell to each customer and
increasing the number of times you sell
to each customer. In my opinion this is
the best way to increase sales, but this
does not guarantee you will increase
profits. There is a big difference between
sales and profits. You may achieve
the goal of putting more money in the
register, but still put the same amount in
the bank. Now you are working harder,
selling more, paying more people,
growing your sales volume but end up
with nothing to show for it at the end
of the month. To make more profit, you
must have both, good marketing and
good management. Good management
will guarantee more profit.
Good management begins with
choosing good people. Choose your
people like you would choose stocks.
You are making an investment, so buy the
best you can afford. I don’t know of any
successful investors who shop for the
cheapest stocks they can buy. Smart
investors like smart business owners
shop for “performers”, they are going
to be the best bargain you will find,
regardless of what they cost you.
Good management includes your
choosing products to sell that are
profitable. Obviously products must be
salable, which means they must have
customer appeal, but they also have to
be profitable. When you have a vendor
that tells you not to worry about profit
margin, or even better “our products
will sell so well, the profit margin is
irrelevant” RUN! Don’t just say no, say
h--- no! And look for a company selling
a comparable product that tells you
“consumers will pay more for our products
because they are worth it which means
you make more PROFIT!”
Sales are
good! Sales are
important, but
PROFIT is
ESSENTIAL!
Good
management
begins with
choosing good
people.
Good
management
includes your
choosing products
to sell that are
profitable.
Your products
must be consumer
friendly and
intuitive.
Next, look for a product line that requires
minimal after sale support. After sale
support will eat up more profit than you
imagined. The last thing you need is to
pay for more staff to take care of your
increased sales, because the products
you are selling require more hand-holding.
It is not uncommon for businesses that
grow too fast, to develop disgruntled
customers due to the sudden demand
for after sales support for the new
customers Again, this is a managing
responsibility, but it is very important that
your long-term customers do not feel as
though they are no longer receiving the
one on one support they once received
now that you and your business are
growing and you have doubled your
customer base. Your store may seem
to always be busy, with people coming
and going, browsing and shopping, but
you must appear to be just as available
to your customers as always, and that
means your products must be consumer
friendly and intuitive.
This is another area we have tried to
improve for our dealers at RNK. Having
been a dealer who enjoyed moderate
success, I know the challenges associated
with growth and it has not changed all
that much in the last 15 years. While
there will always be a certain amount
of support required for some products
(remember, that’s why consumers prefer
to buy from you rather than from a
website), the more we can do as your
distributor to limit that support, the more
profit you will make. RNK invested over
a million dollars in consumer product
education. We provide factory trained
educators to our Full Line Dealers at
zero cost to teach not only their staff,
but their consumers. In addition, we
conduct monthly webinars, host a
constantly moderated forum, and
provide full time Tech Support for your
customers who buy our stabilizers,
threads, and software. We want to add
as little to your educational task as
possible.
The most important consideration in
choosing the perfect product line to
help you increase profits, is making sure
there is a support program in place that
will ensure your success. Most companies
have educational departments that will
train you and your staff, and most will offer
marketing suggestions. Most will offer
deals on their products that give you the
opportunity to market those products, but
when it comes time to pay the bills, YOU
ARE RESPONSIBLE! Now you are on
your own, and if the product didn’t sell,
it’s because you failed to market it
correctly or you just didn’t make it happen.
Sound familiar? Unfortunately, they are
correct. The truth is, it is your responsibility.
You are the owner or manager and to
manage properly, you must make sure
of all the things mentioned above. Most
of the machine manufacturers have a
program to help you, but when it is all
said and done your name is on the bill
and if the product doesn’t TFMMthe bill
still must be paid. The next time you are
offered a great deal or amazing
opportunity, you may want to ask what
program is provided to help sell this
amazing deal, because putting a great
deal in your warehouse does not make
you a profit. What program is offered to
help you sell these great deals?
In the last 5 or 6 years we have
received some amazing testimonials
from our dealers who have sold
$30,000.00 to $200,000.00 at their RNK
Event, but the most gratifying letters
have been from some of our smaller
dealers. Some have told stories of how
RNK Distributing helped save their
business. Their machine sales were flat,
no new customers, they couldn’t pay
their bills, and they were depressed,
and frankly did not believe us when we
told them we could turn their business
around in three days. Many scoffed, at
the attendee numbers we told them we
could bring to their event, and the revenue
we said we could take in for them.
When we told dealers how much
product we could sell on average to
each attendee, they were again very
doubtful. We have now been to many of
those dealers locations several times,
and some multiple times per year. I am
thrilled to tell you we are still bringing
in amazing numbers of new attendees
each time, and we continue to sell not
only the new attendees, but those that
have attended every event, more
product. And one of the most gratifying
things about my job is the e-mails and
letters from consumers saying how
much more they love their hobby since
learning about our products.
Now that we have established the
importance of your choosing vendors or
product brands with successful marketing
programs, I want to stress this does not
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guarantee more profit, it only guarantees
more sales! And remember “Sales
are good! Sales are important, but
PROFIT is ESSENTIAL!” So, while
making sure your vendor has a
marketing program in place that will
help you sell, make sure that program
also makes you a profit!
Vendors
should ALWAYS
be YOUR
MARKETING
PARTNER!
Now, let’s apply some of what we have
learned to your actual store sales floor.
I want you to assign the different areas
or departments as profit centers. You
have a show room/floor and that is the
area or center where your store should
produce your largest profit. This is the
area you have allotted the most real-estate,
this is the area where you are selling
the largest dollar items, and where your
best sales people work. The real-estate
you have given this area is the most
expensive real-estate in your store and
every inch should be producing PROFIT!
I have visited numerous stores however,
that have machines displayed in this
area that are never demonstrated, and in
fact many were not even plugged in to
the electrical. I have also observed this
valuable selling space occupied with
damaged unsalable sewing furniture,
or non-salable folding tables instead
of profit making salable tables and
cabinets. It is only my opinion, but based
on my 30 plus years as a store owner, I
am convinced every inch of this prime
location or profit area should be filled
with saleable products that generate
the maximum profit margin. If you are
using this space to display products
you don’t intend to sell, you are
paying for a bigger truck.
The same thing is true of the space you
have allotted to your notions department. I
am amazed at the number of dealers who
still use this expensive real-estate to
display products sold by the mass
merchants, chain stores, and internet
sites at their cost or below. When I ask
dealers about this the common answer
is “I don’t really care about those sales,
I focus primarily on machine sales”.
Having been a store owner for 30 years,
I totally get this concept. I too like to
make the larger dollar item sales, but
the fact is consumers spend much
more for supplies than they spend for
equipment. This is true because they
continue to buy supplies month after
month and year after year as long as
you continue to show them what they
need.
The savvy dealer is not only selling his
machines for a very good profit, but is
focused on how he can continue to sell
those customers. The profitable savvy
dealer however, is selling machines at
a very good profit and continues to sell
supplies/products that make them the
maximum profit margins year after year.
These latter is the dealer we try to develop
at RNK. We are focused on providing our
dealers with the best sewing, quilting,
and embroidery supplies money can
buy, at prices that will generate them
the most profit possible. In addition we
have developed a program to help them
sell more machines, and more supplies
than most have ever imagined possible.
In our opinion, doing less is simply not
acceptable.
Think on this. If your competitor in your
market is a typical Sewing Machine
Retailer he is selling machines with no
consideration of supply sales. Those
consumers who have purchased
machines from that dealer are the target
of our event promotions. We invite them
to come learn what their dealer does not
take the time to teach them. One of the
most common expressions heard from
attendees at our events is “no one ever
explained this to me” and that is why
so many consumers are enjoying their
hobby so much more after attending
our events. But wait, what do you think
those consumers do at the end of our
events? They are seen carrying bags
and bags of our products to their car,
and in 2013 many are going to be buying
the machine they stitch on at our events!
If you are one of those Sewing Machine
Dealers focused solely on machine sales
with no concern about the supporting
supplies you are giving away thousands
of dollars annually. Tens of millions of
dollars are spent on supplies annually,
and I can’t speak for others, but RNK
Dealers make up to 300% profit on our
products. We can do this because we
don’t sell to Mass Merchants, or Chain
Stores, and we enforce our MAP! Why?
Because I owned my own Sewing Machine
Store for 30 years and I learned…
“Sales are good! Sales are important,
but PROFIT is ESSENTIAL!”
I hope you join us in Las Vegas for the 2013 VDTA, where we will discuss even more ways to Increase Sales, as Steve Wilson
and I “Show You The Most Money” Feb. 10, 10:15AM
Call and reserve your seat now, call 865-549-5115 and say “I want to see the most money in Vegas”.
Register for all our profit making seminars at: http://www.rnkwillshowmethemoney.com
Ricky Brooks
Rnk Distributing
RNK Distributing
2562 Western Ave
Knoxville, TN 37921
Phone: (865) 549-5115
Fax: (865) 549-5116
Toll Free (877) 331-0034
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