Sometimes I hate old school industry

What I mean is I hate entrenched niche industry that have a corner on a market due to either legislated action or by a perceived expertise.

I am trying to innovate a new way of doing business. What I have found is that there are laws that more or less force me to purchase items from "approved vendors" that jack up prices because they can, rather than based on a real value. I guess there is simply not enough competition in the market. So in doing some research I find the actual hardware might cost a few thousand $ and the vendor wants to charge me $20,000. I was already balking at a $10,000 price tag from my parent company.

I always wonder about a business when I walk into thier office and wonder where the throneroom is. Is it really neccessary to build an opulant looking office? I'm a practical guy and I don't want nor need a Ferrari to drive to work. 4 reliable wheels; splurging for me is buying a truck with a good stereo system.

For instance, when I started my business I needed to buy vehicle and business liability insurance. So I got some quotes. They ranged from $990 to $13,000 per year for the same coverage. Go figure. The pricey premium was from an insurance company that had one of those opulant looking office buildings. I happen to know a few folks who work there and was really surprised what they were paid given the work they did. I also know a guy who quit working for them because "his concience was bothering him" because of all the fraud they were doing to clients.

So in my initial research into the equipment I need to do the work, I contacted a few of the companies in the business and got some dubious responses like, "how much do you expect to pay?" "what is your current quote?" I don't like fishing questions like those. I expect those kind of questions from carnival workers or lawyers or bankers or flim flam used car salemen........There I go insulting a whole bunch of people.

There is something to be said for offering better than expected service. Charging for services at a fair price. These are the things that build a better America. These are the values that employ more people. Inflated prices just cause inflation.

I stopped by the Gander Mountain bankruptcy sale yesterday. The prices were still too high. When I mentioned this to a clerk he says "we do price match, and beat anyones price" I responded, "I don't generally shop here because your prices are way too high, and if your competitor is going to sell his wares cheaper, I will patronize his business because he is both smarter on price and more honorable than this store. You seem to have an attitude that it is a great priveledge for me to shop here. Then again your store is going bankrupt"

Paul Downes said:

When I mentioned this to a clerk he says "we do price match, and beat anyones price" I responded, "I don't generally shop here because your prices are way too high, and if your competitor is going to sell his wares cheaper, I will patronize his business because he is both smarter on price and more honorable than this store. You seem to have an attitude that it is a great priveledge for me to shop here. Then again your store is going bankrupt"

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Not exactly the clerk's fault now, was it?

Certainly not his fault. The store will remain open after a change in ownership. But when you represent a company that has a policy, putting forth an argument sometimes gets mentioned to the powers that be. Oh I suppose someone had a business model that thinks that if we have a flashy store people will buy from us. Obviously marketing people believe this. And much of the public also fall for that mindset. I just think it is worth expressing a counter attitude. Brick and mortar stores are going to have to rethink their business model in order to compete with internet sales. Some are doing this and others.......

Yesterday I leased a building from a multi-millionaire. When I visited his "office" I was able to enjoy looking at an extensive classic car collection in the same building. Turns out he was shipping most of the cars off to be auctioned off. He said something about how he had finally realized they were just "stuff" and didn't really make his life happier, besides they took up too much time with upkeep. The guy employs a lot of people and we spent quite a bit of time just talking about life. I got the distinct impression that he is realizing that treating people well is what has real value. The lease terms were reasonable and I found him very accommodating with regards to some changes I need to make to the building.

Business always needs to adapt. Our company is constantly looking for better, greener, more efficient, less costly ways to meet clients needs. I am on the R&D team. I find it amazing that many things are done "because that's the way we have always done it". When I worked as an engineer I saw lots of equipment designed from that mindset. It is a good thing to frequently ask yourself "why are we doing this task this way" Or, "what do I hate about this task and how can I make it better". I always keep my ears open listening to any of our clients complaints about their work. I can't fix everything but recognizing a need is the first step to finding a better way.

I'm not sure what is the best way to describe my feelings on this but I agree with it. I've gone with my girlfriend to some of her doctor's appointments and always wondered why they feel they have to have a palace for an office. Of course the fee for an office visit mirrored the structure. Same with a lot of businesses. So, I don't have a solution for the problem except for mine. Don't buy there. People also complain about stores being open on a lot of the holidays. Well, if people would quit going shopping there on holidays, they wouldn't be open. Right? Duh!

The local Radio Shack was having its going out of business sale a couple weeks ago (along with many many others) so we wandered down to take a poke around. The list price on a el-cheapo USB cable was $25 Even at 70% off it was higher than alternative vendors. The batteries were supposed to be 50% off and also 2 for 1 (so 25% of list) which put them slightly less than what we normally pay but the 2 for 1 deal had expired before we got there so they were still more than other places normal prices at 50% off. Pretty much everything else in the store was priced the same.. so no real surprise why they were going under.

I have the same response with yard/estate sales.. I'll dicker if we're in shooting distance but if you're 4x what something should be I'm just going to walk.

What I really don't get is some of the real estate around where I live. Folks will list a house 40-50% more than they expect to get (or at least what you see it having sold for later... I can't specifically speak to expectations). I'm not in the market but keep an eye on comps, and it simply baffles me - they HAVE to be running off a lot of people by being outside the filters.

From the goverment influence side.. Some of the downtown market has been grossly inflated by the cities "urban development" projects, they keep buying tear downs at premium prices, sitting on them and then basically giving them away later. One place was listed at $80k a few years back, then a round of city purchases kicked in and they re-listed it at $450k - same place, no repairs, and been vacant the whole time. I figure they HAVE to be figuring to cash in on city deal somehow cause the rest of the market sure hasn't moved that much here.


My favourite response to "how much do you expect to pay?" is "as little as possible". Generally I dislike dealing with companies that don't list prices, it always feels like they're doing something fishy (sure offer bulk discounts, whatever but if you don't give me a place to start I always feel like I'm starting on the wrong foot and will be going to look for another vendor).

Ryan Mooney said:

I have the same response with yard/estate sales.. I'll dicker if we're in shooting distance but if you're 4x what something should be I'm just going to walk.

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My rule for dealing with Craig's list, yard sales, etc. is 50% of retail if in very good condition. That's the starting point. If you have something that's used, a couple of years old, even if it is in perfect condition, you should not expect to get close to current retail. There are exceptions, but not many.

Rennie Heuer said:

My rule for dealing with Craig's list, yard sales, etc. is 50% of retail if in very good condition.

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A good chunk of what I'm looking at has no modern retail equivalent so that makes the conversation a bit more complicated. Having said that, if you have a rusty old Stanley #4 marginal user and you're trying to sell it as if it was a shiny pre-1928 Norris Infill I'm not even going going to start the conversation.

Well I'm making some progress. I am talking to a different company that has given me a preliminary quote for the main device at $4614.00 When I add in the other parts and pieces I may be able to get the machine built for around $6500. That's a lot less than $10,000-$20,000. Again I found it funny that the most expensive company took 1-1/2 weeks or better to get back to me, while the recent quote took 10 min. on the phone. Fast, friendly, REASONABLE service.

This issue is a thing that drives me nuts. I bought a specialized device from my parent company a few weeks ago. Cost somewhere around $215.00. Piece of junk. Didn't work right out the box. So I called our tech guy and asked him about the decision to go with that particular item. He tells me "we tested a bunch of different ones out and that one is the best we could find" Really? I did a quick Google search and made a few calls to people who actually use the things regularly, and found out that one in particular was very reliable, easy to fix, with parts readily available. So I sent a list back to the tech guy and asked "did you test any of these?" Answer: gee, I didn't know those were out there. Really?

This is what I find more often than not. People don't do their homework. The just get something that looks like it may work and go with that. I was a little irked that they developed this part of our business without contacting anyone on the R&D team. And I'm supposed to be co-chair of the team at that. I'm not going to lose any sleep over the matter. I'm just going to find what works best for us and maybe let corporate headquarters know later. Us tool nuts know that we are generally willing to pay a little more for something that works well most, if not all of the time.

We have taken over a large share of the market in our state. It wasn't predatory in any way. We simply give better than expected service at a reasonable rate. Some of the clients that switched to us were shocked when they saw how the service was supposed to work and even better, we lowered the cost of service to what is standard. We actually listen to them and treat them as "family". Their concerns are our concerns. I have some clients who call "just to chat". They are also promoting our service out of gratitude. As part of our service we tell them to call us immediately if they have a kitchen fire. No matter the time of day we will get there asap to help clean up and get them back in service. I purposely don't charge much for emergency service. This is better advertising than I can buy.

Paul Downes said:

So in my initial research into the equipment I need to do the work, I contacted a few of the companies in the business and got some dubious responses like, "how much do you expect to pay?" "what is your current quote?" I don't like fishing questions like those. I expect those kind of questions from carnival workers or lawyers or bankers or flim flam used car salemen........There I go insulting a whole bunch of people.

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In my former career, I negotiated freight rates and more often than not would get those same questions... I always answered "It doesn't matter what I expect to pay or what my current quote is, give me your best price and if you have the best rate, you get the load".... carriers were always hungry and looking for traffic... they needed to fill their trucks, aircraft or ships.... sometimes they were restrained from cutting rates by law, but most would anyway... I controlled some pretty big shippers and cargo loads in those days...

Ryan Mooney said:

The local Radio Shack was having its going out of business sale a couple weeks ago (along with many many others) so we wandered down to take a poke around. The list price on a el-cheapo USB cable was $25 Even at 70% off it was higher than alternative vendors...

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I had exactly the same experience a few weeks ago. Needed a USB printer cable at work, so I hit the nearby Radio Shack and paid more than the cable was worth, even at the "sale" price. I told the guy it was no wonder they were going out of business, and he agreed. I wished him luck, and he said he'd be fine. He said he was almost done with pharmacy school.

The postscript to the USB printer cable story is that it turns out I didn't need one. But since it was a closeout sale, I couldn't return it for a refund.

Electronic cables, of all sorts, are the biggest rip off at brick and mortars.

About 10 years ago, I had to order a cable to join two network switches together. It arrived promptly. It was 14" long with a connector at each end. I forget the exact price now, but it was several hundred dollars. My manager and I both had to laugh, and then pay the bill because we really needed that cable. I could not conceive of anything that might be in that cable that justified a price like that. It was a proprietary connection, so we couldn't go anywhere else. I imagine their offices had gold faucets in the washrooms.

Oh, as for Radio Shock, now "The Source" in Canada, I used to buy lithium cells, about the size of a nickel, for about $5 each. I was in the Dollar Store one day, and took a look at these electric votive candles, 2 to a package for $1. Surprise! they use the same battery as the one I had been buying at The Source. So now I get them for 50 cents each.