OPERATING OPPORTUNITIES

The Merchant Magazlne just such an evaluation on their $1,000,000 in volume and $750,000 in cost ofgoods sold. The results were predictable.

INVENTORY - t2o/n X $750,000 : $90,000X l0o/o: $ 9.000

RECEIVABLES - $I25,OOO (45 1 0olo:

WALLY

LYNCH Paid Associates

PO. Box 741623 Dallas, Tx.75243 l) nlces. performance, porrabiliry

I and compatibility have all improved to the point where it almost makes no sense for any lumber and building material dealer to be without capabilities provided by computers.

The dog and pony shows freely available from the many sellers serving this industry quickly illustrate the features and benefits. One finds a commonalitv of improvement percentages suggested by each of these specialists that center in four areas.

INVENTORY - A computer will provide the wherewithal to manage unit control so well that the user will require about l2%' less inventory. This means that for every $75,000 in merchandise now required to sustain $100.000 in sales, $9,000 less will be needed. At 100/0 interest this is $900 per year

RECEMBLf,S A comDuter will allow managemenl to bettir handle receivables by 130h. Thus for everv $100,000 in receivables, $13,000 less will be required to fund this expense. At 107' interest rhis is $1.300 per year in cost reduction.

GROSS MARGINS - Compurerized pricing control on average generates 3% more gross margin than manually managed pricing. On $100,000 in sales, this is $3,000 annually in additional gross rncome.

STORAGE - Better unit control through mechanization means fewer dollars invested. thus reduced space requirements. The average savings is 150h. lf occupancy costs are 50/o of sales of $100,000, I 5% of $5,000 is $750 per year in additional usable space. This is a total alleged computer performance benefit of $5,950 annually.

A real live company went through

Posts, poles, pilings, timber, crossarms, gtapestakes, dimension lumber.

Pacific Wood Preserving of Bakersf ield produces viitually all pressure treated wood products. And, with computerized inventory control, pacific Wood Preserving of Bakersfield offers accurate and complete service. A single phone dall can put this complete capability to work for you. Call today:

Steve Ryan, General Manaoer

In California (800) 5S2-3950

Outside Catifornia (805) 893-0429 days) X $l 2,500

GROSS MARGINS - 3OK X $1,OOO,OOO: $30,000

STORAGE - 5% X $1,000,000 : $50,000 X l5%: $ 7.500

Potential Total

DOLLAR BENEFITS - $s9,000

There were two interesting sidelights within the analysis. First, the company's pre-tax profits on $1,000,000 in sales were $22,000, or 2.20/0. The dollar benefits of computerizing were $59,000, or 5.900/o of sales. The company in essence could look forward to pre-tax profits, after the computer was paid for, of 8.100/0. A whopping 2680/o increase.

The other interesting aspect of the experience came about when the benefit percentages were challenged. At 1000/o of amounts claimed benefits, profits improve $59,000; at 500/o profits increase $29,500. lf industry claims are only 370/o accurate, pre-tax profits double and even at l0% accuracy, pre-tax profits grow by $5,900, an increase of almost 27%. Volume may cure problems but computers sure enrich profits.

Are You Absolutely Sure You Are Buying Your Building Materials Right?

If you have ever asked yourself - Am I Competitive? or Am I absolutely sure I buy my Building Materials and Hardware right? Then you need C.B.S.-Central Builders Supplies Company.

C.B.S. can take the guesswork out of buying. Since 1937, C.B.S. has been helping independent building material dealers remain competitive with mammoth corporation chains. Because C.B.S. is a dealer owned non-profit corporation, all discounts, rebates, datings and advertising funds are all passed directly to the participating members.

C.B.S. Offers You These Advantages

*c.B.s. has been nationally recognized as "The

* c.B.s. is dealer owned Place To Go To Buy Lory"*

* C.B.S. has a state-of-the-art internal commun-

* As you buy more the cost to belong goes down- ication system with participating members -not up

* C.B.S. has an in-house Lumber Department

* C.B.S. has a General Building Materials Dept.

* C.B.S. has a program with the Blue Grass Tool

* C.B.S. Rebates are paid to the members in cash

* C.B.S. has an in-house Building Specialties Dept.

* C.B.S. operates as a non-profit company

* C.B.S. members share in the cost to operate Company

Central Builders Supplies Company

Ileud4uurtt,rs lrtr lhe Allied Building Centers 215 Broadus Street Sturgis, Michigan 49091 Phone: (616) 651-1455

*C.B.S. was featured in the December, 1986 edition of The Merchant Magazine