The American economy has been stagnant for the past four years.We have seen numbers where the industry was down as much as 35% – 40% between 2007 and 2009.We have seen numerous dealers and small business’ go out of business.We saw small rebounds in 2010 and 2011.
Overall, the imports account for about 21% of U.S. consumption.Over the last 2 years, U. S. consumption has been flat with the growth made up by the imports.The major manufacturers have reported growth over the past year or so, but much of that growth is from their overseas operations. Some mid-market and small businesses have seen growth due to new channels of distribution or a major contract award. Most dealer and mid-market manufacturers are down overall simply because the industry is still down.
Each of these factors brings price into the equation.We all want the most we can get for the lowest price we can pay.Low invoice price often means buying from overseas.
If you want an HPFi double pedestal desk, you order a Hyperwork desk and you get this.
Take it out of the carton, set it in place and recycle the corrugated packaging in roughly 15 minutes.
Unpack desk and set in place: Two men at $20.00 per hour each for 15 minutes to throw the trash away = $10.00. Price of desk = $650.00. Total acquisition cost is $660.00 to install desk and walk away from your customer’s office. Using a 20% margin for the HPFi desk you charged your customer $825.00 and you made $185.00 selling HPFi total profit.
Uncrate the parts and lay them out to be assembled. Be sure and count the parts to make sure you have all the pieces. You will need a couple of guys for the next hour or two if you’re lucky enough to have all the pieces (now would be a good time to grab a 6-pack.) Start your assembly process and make sure that you follow the instructions or you will have to take it apart and start again. Don’t be distressed as this is fairly common. Once you have the shell of the desk together you need to find two pedestals to fit it and hope you do not have to assemble them as well.
If you paid $650.00 for the HPFi desk and you paid 20% less for the import desk at $520.00, you might think you made more money with the import. It probably only cost you $15.00 to take it out of the box and set it in place.
But if you had two men working on the import for two to three hours you probably spent $100.00 to put it together and $20.00 to cart the mess off. Since most of it is foam and doesn’t recycle, you just destroyed your sustainability story.
What did you spend to make your profit? We assume you would spend an equal amount of dollars to get the product to the site to be able to set it in place. We assume you had two men on the job at the rate of $20.00 per hour per man.
Unpack desk parts and lay out to assemble: Two men at $20.00 per hour each for 2.5 hours = $100.00 (if you have to assemble pedestals, you should double this time.) Gather and throw trash away = $20.00. Price of desk = $520.00 + $100.00 + $20.00 = $640.00 to install desk and walk away from your customer’s office.
Keep in mind that in 6 to12 months you’ll likely have to go back and repair the import. You may get the replacement for free but you still have to assemble and install again. This time the customer is probably a bit upset, so your total acquisition cost just went up by $120.00 not to mention the cost to get it there again. If you sold the original product with a 20% margin including your installation you charged your customer $800.00 for the import. You made $160.00 with the import – minus the return visit and replacement costs of $120.00 from the $160.00 = $40.00 total profit.
Total acquisition cost for the import is $760.00 with a $40.00 profit.
And we haven’t even mentioned the other construction advantages of HPFi like:
So, do you know your total acquisition cost when you sell an office suite? HPFi will be your better value in the long run!