Richard Glikes on Making Money in CE
This column ran in the most recent issue of Azione Unlimited's member newsletter, and is republished here with permission.
The number one written goal of Azione Unlimited is, “Deliver exceptional profits to members to ensure their long term success.” Let’s engage in a short discourse on how to make money in this industry. Here are some ideas:
1. Focus your business on a select number of vendors. It’s better to deliver more volume to a few manufacturers than spread it out. It helps you hit freight, make rebates levels, have a more fructuous business relationship, and be important to your suppliers.
2. Take every cash discount. Generally they average about 3% to 4%. It’s all pure profit and vendors love, yes love dealers who pay their bills on time! A good net profit in our industry is usually about the same as the cash discounts. After you pay everyone including yourself and Uncle Sam to net 4% is good.