Ma and Pop shops

[DOLMARatOs]

I get a huge kick out of the guy who wants to know if they can get a break on a DOLMAR 341 because the local Farm + Flop has a 16" saw with a case for 99.99 or 149.99...and my saw is double the price plus some change.

I politely ask them if there were any Dolmar saws on the shelf next to the pull-on. They say no and I say that we're not in competition with that store. Then I grab a pull-on brand new saw purchased from the exact box store and show them the differences.

It's always a good idea not to compete in name with the box stores. Probably the only reason i don't sell husky saws. Customers who shop for price alone probably don't want or can't afford a top quality home saw or a small PRO saw.

 

[belgian]

That business model (8%) just doesn't apply to a Stihl OPE store (not one that's a back room of an ACE Hardware, part of an Equipment Rental company or Napa Store). It assumes a sale volume sufficient to make those numbers! Let's assume I buy $400k of equipment from Stihl a year. We have reasonably low overheads and run a tight shop... but 8% of sales barely covers the cost of one underpaid employee, and that unit purchase volume would be in the upper 25% of Stihl dealers by sales volume.. so pity the 75%.

Unit sales keep the lights on, pays rent and the employees. In January and February, the heat needs to be on on low... The service work makes it worth while, but even that isn't all gravy.

Good point, Lake.
I have to admit it is a rude awakening to me that the gross margins of some dealers is only up to 8%. I think that is way too low do make a decent profit, unless you have a helluvia big turnover. And that's exactly the business domain of superstores.
I am not a dealer, but at those margins, I would think of widening my product or service range, or put my money in the bank ... ultimately.