OPERANNG OPPORTUNITIES

WALLY LYNCH Paid,Associates PO. Box 741623 Dallas, Tx.75243

The following is a continuation of a discussion of price cutting practices intoduced in this column last month. See page 26 in the August issue for points one through ten -ed.

CHECK THE JOB.

Find out if any of the 38 waYs to chisel on a job are being used.

DISCUSS THE PRODUCT.

Make the customer understand that someone can always build an inferior product to a price. Inferior merchandise is never a bargain.

CITE EXAMPLES.

Give the buyer a healthY fear of the lower price by citing examples and case histories of sad experiences of people who bought on price alone.

REFIGURE ACTUAL COSTS.

Determine if changing source of sup- ply will lower the cost you previously figured.

FEATURE MONTHLY PAYMENTS.

Reduce the price to monthly installments and emphasize ease of payment and how small the difference is when spread over a period of use!

SELL YOUR COMPANY.

Emphasize all the good points about your company, its history, its personnel, its reputation. Build a buyer's yardstick and check off your sales points, one by one. Remember superior salesmanship can win over price.

CAN THE COMPETITION BE RIGHT?

Ascertain whether a mistake has been made in your competitor's estimates. By taking corrective action you may make a friend.

BE REASONABLE.

Demonstrate the difference between price and value. Always avoid an argumentative attitude. Talk customer benefits instead.

THINK OF THE FUTURE.

Consider the ethics and future implications of cutting or not cutting your price.

OFFSET A CONCESSION.

Plan a sale at a compensatory price to offset any concession. Always remember that any concessions from price' every penny of it, come right out of net profit!

Art Hood believed that the fundamental pricing problem in retailing was establishing a mark-up which would compensate for the cost of goods sold and for the services rendered in the process without handicapping sales results' You can read the very beginnings of matrix pricing into his philosophies. He, like the rest ofus, thought one ought to be paid for what one did.

Free Offer

Art Hood's list of comPetitive services and ways competitors can chisel and skimp on them is available to those who send a stamped, self-addressed enveloPe to WallY Lvnch. Paid Associates, P.O. Box 141623. Dallas. Tx. 75243

Sacramento Market Heating Up

Competition between home centers in the Sacramento, Ca., area continues hot and heavy as the independents, chains and warehouse operations battle for a $743 million annual market.

Lumberjack's strategy has been to lean toward the commercial trade market, courting contractor business. Although the stores, which are part of Payless Cashways, have added special rooms for contractors, top management contends that they are not concentrating on that market.

"We have no intention to leave the do-it-yourself market," John Fischer, Payless western regional vice president, said. "We see more growth in the professional trades. There are more working couples in today's households and families have less time to devote to do-ityourself projects. The contractor market is growing faster than d-i-y."

Despite the shift in market focus, Lumberjack's customer base is 700/o do-it-yourselfers. Industry analysts say that because ofthe Payless leveraged buyout last year, the stores have heavy debt loads and are trying to generate quick high profits.

Scott Eastman, general manager of Eastman Building Products, calls the Sacramento market "healthy for everyone right now." He adds, "We're in somewhat of a boom era for home building. Lots of people are buying new homes and you have people moving in from the Bay Arga."

Home Depot opened its first store in the area last year in Carmichael. The 103,000 sq. ft. operation follows company policy of being the lowprice leader in the area. Focus is on the do-it-yourselfer with over 30.000 different merchandise items. A second store is planned for the area in the near future with a total of 10 in the long range outlook.

"The Sacramento market is very good for us," explains Lonnie Vogel, director of public relations at Atlanta, Ga., Hq. "California is an excellent market for Home Depot. We see opportunity for more growth, but we don't like to tip our hand on expansion for competitive purposes."

Building Supply and Lumber, Cal Era Lumber, Dolan Building Material and Meeks Building Centers continue as strong players in the competition which sidelined Builders Emporium and 84 Lumber early this decade.

Lumber Siblings In Sign Wars

Two neighboring Tarzana, Ca., lumber companies are into a war of words, using their streetside marquees to trade daily jabs.

When Terry Lumber Co. manager Sherm Olmstead returned from a two-week vacation, "Welcome Back Sherm" was posted on the firm's signboard.

Across the street, Tarzana Lumber Co.'s sign greeted him with: "Welcome Back Sherml We Enjoyed Your Vacation!"

The companies have been poking fun at each other on the marquees for months. But it's all in fun. Although operated separately, both firms are owned by TheTerry Companies. Tarzana serves do-it-yourselfers and remodelers, while Terry primarily sells to larger contractors.

"People think there's a feud going on," said a nearby business owner. "Everybody takes a look to see what they're saying about each other."

Competitive employees at both companies fuel the repartee by dreaming up the daily poke. And sometimes they'll change the billboards two or three times a day trying to get in the last word.

Terry Companies president Tom Mullin doesn't mind the signboard rivalry. "We just don't like them to get into price wars," he said.

Universal Buys Arcata Planing

Universal Forest Products. lnc.. has acquired Arcata Planing and Dry Kiln, Inc., a redwood processor in Arcata, Ca.

Mike Allen, who has been in charge of Universal Far West's sales office in Fortuna, C-'a., has been named general manager of the plant which includes a planer and two kilns with a capacity of 100,000 b.f. each on an l8 acre site. Larry Roth stays on as plant manager. The Fortuna office will be relocated to Arcata.

"lt has the capability to kiln dry, plane and grade redwood for Arcata's customers, as in the past, and will also provide for Universal operations." said Gary Adamson, president of Universal F-ar West in Huntington Beach, Ca. Redwood produced in Arcata will be distributed through Universal Far West's Stockton and Huntington Beach distribution yards.

Shorter Home Center Show

The March 1990 National Home Center Show will be a half-day shorter, dropping the usual exhibition-ending Wednesday due to a new categorization of exhibitors that allows visitors to see who they want to see more quickly.

The Treated Answer

Lumber, plywood, round stock stokes, poles, & pilings

Agency stomped, ground contocl fire retordont pressure-treoted wood products