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Comment by James Cole on July 13, 2014 at 16:09

Jan, Everything you said is true.  Whether a janitor or a CEO we all sell our services in the job market for a profit. 

Jim

Comment by Jan Carter on July 13, 2014 at 15:05

Jim, I am very sorry to hear that.  Business owner is not all it is cracked up to be.  Profit is not a dirty word.  It is the reason we all get up and go to work, even the business owner.  The business owner doesn't leave it at the office or go on vacation without worry.

They have to be aware of what their competitors are doing and MAAP is supposed to help with that.  In some cases it does

Comment by James Cole on July 13, 2014 at 14:53

Thanks Steve.

To anyone following this thread.  If you think you want to become an independent business owner, send me a private message and we can talk about it.  I won't attempt to discourage you, but I will provide you with my knowledge and experience.  No cost.

Jim

Comment by James Cole on July 13, 2014 at 14:33

Steve,

Sad, but true.  And I didn't even address variable costs such as replenishing inventory, wages, payroll taxes, and workers comp.

After more than 12 years of running my own company, I am now unemployed.  The owner of my leased building sold the property and I wasn't able to find a kitchen to move into, so I closed the doors.  It is difficult not having somewhere to go when you get up in the morning, but it was even harder saying goodbye to my employees.

Jim

Comment by James Cole on July 13, 2014 at 14:05

First, I think MAAP is ”Minimum Allowable Advertised Price” as set forth in the manufacturer's MAPP “Manufacturer's Advertised Price Policy”.

Here is a paragraph explaining what the MAPP is:

Some manufacturers place into effect "Minimum Advertised Price Policies" or MAPP.

The purpose of this policy is to promote and protect their brand image.

MAPP Policies prevent retailers from advertising below the MAPP Price.

This does not, however, prevent the retailer from selling the product for less.

Regardless of what the business books may say there are only three reasons for a company to be in business 1. profit, 2. profit, and 3. profit. Now before someone comments that profit is a dirty word; no company can stay in business without making a profit.

The big difference between Terry's business and someone selling knives out of their garage it a thing called “overhead” and no that's not the ceiling. It includes lease/rent, some utilities, business licenses, special assessments, liability insurance, fire/loss insurance – well I think you get the idea, these are known as fixed costs. He pays these amounts whether he makes a sale or stays home in bed. I sell on ebay, (I don't really) what is my overhead? Zeeroo.

The cash flow/profit and loss model is; revenue - cost of operations = profit

Staying with Buck 110 knives at $36

and using a cost of operations of $1000

we see that Terry needs to sell 28 Buck 110s to finally make a profit of $8

My cost of operations is limited to my variable costs i.e. whatever the credit card company or Paypal takes, so my profit begins on the first knife I sell.

In Memoriam Comment by Terry Ray on July 13, 2014 at 10:19

As I did read Jeff but thanks for your help

Comment by jeff on July 13, 2014 at 10:04

if you read my comment, it wasnt talking bad about the mom and pop stores, i was just saying that IF a small store advertised a low- ball price.. it made the guys who were buying the large quantities, and selling for a certain price, mad. read ... before you resent !

In Memoriam Comment by Terry Ray on July 13, 2014 at 9:41

And to add , my cost on the 110 is 36.00 so I can buy it from smkw
Cheaper than from buck knives ... Ain't I glad ima buck dealer...

In Memoriam Comment by Terry Ray on July 13, 2014 at 9:39

Yes maap is a great idea , and I agree with it. And I resent the comment made by Jeff , mom and pop stores, like mine we do not
Dump product at cost, I a shear to company (mfg) policy and pricing. It is the few selling from their garage or home that find themselves scared of losing and dump these items for nothing.
Then it forces business owners such as myself to compete with them.
We have to make money to stay in business. When you buy from a reputable dealer he is there standing by his word and his product, but from joe blow selling out of his garage or house and see if he cares weather or not you get the right knife or are even happy with it. I care that's what I sell , my word and my promise.
Long live mom and pop!

Comment by Garett Finney on July 13, 2014 at 1:05

There is what they call MAAP pricing. It's a price dealers can't sell below. Most companies have it and if someone complains they call the distributor and will cut off the offending dealer. I will have to look and see if Buck has it.

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