Monthly Archives: December 2008

Last Day of the Year Discounts

Today is the last day of the year. Of course there are the parties and such. To me it is much more, it is a time to look back and look forward. But for many people it is just another tick of the clock.

One interesting part about this tick is the way that accounting works, you see by this time in the year all of the spending is done in most companies. But they want to lock in better earnings, so they have every reason to push really hard to get in some last minute sales, even if they sell at or near cost. This happens to a lesser extent on the last day of each quarter and a bit on the last day of each month. Sales people need to reach quotas, managers need to reach their numbers also. Because of all of this it makes this one of the best days to buy something. This works better at places where you negotiate for something. On the last day of the month you can usually get a new or even used car for far below what you can get it for on any other day, and the end of the year is even bigger. It works well for real estate companies; if you need to sign that new lease they are eager to get it in the book for this year. One place I have tried it with great success is with a T1 vendor, for internet access, I called them on the last day of march, and the sales guy was so desperate that he gave me a price only 30% of what I got the week before, and wanted to lock it in for three years, that alone save my client thousands over that time period.

So if you are thinking about buying something, especially a vehicle, then go shopping today, you will save thousands, and maybe even lock in that tax deduction this year.  If you get a Ford or GM they have huge discounts that also expire today.

The tale of the McDouble, and lessons from it.

In this age of all the hype about a down economy many people are looking to save money.  One thing that millions have done is turn to dollar menus at fast food restaurants.  I have noticed that chains with good menus are busy and still quite popular, and presumably profitable.  I have also noticed that some chains just don’t seem to be catching up, such as Arby’s, A&W and Long John Silvers.  I often drive by many of these and the parking lot is usually empty, and when I go inside the whole place is empty.  It seems that some companies are watching the trends, they share this data with all the franchise owners and make changes to their system to make it more profitable, others simply sit there and do nothing, watching their empty store.

McDonalds has always provided good value, they are good at making customers think they are getting a great deal and that is because they usually are, as long as you stick to the value menu.  The only burger left on the value menu was the Double Cheeseburger, a fairly good burger and a great value.  In December of 2008 they replaced it with the McDouble.  It is the exact same thing but with one less piece of cheese.  They say it will save them 6 cents each, and I have eaten a few of these already, they still taste just as good and now have less fat.  Of course this was done mostly to save McDonalds money, but the lesson that should be learned is that businesses have pressures that make it hard to stay profitable in this economy, while at the same time they need to offer better deals to keep the customers coming.  Some get it, and have started to change, and others are simply empty and on the road to failure.

It is hard for most small business owners to understand that by charging lower prices they can make more money per day, simply by doing more transactions.  I went to the mall this weekend and there were a few stores going out of business, they even had 50% off sales on most everything.  But even at this price they were STILL more expensive than the local Walmart, it is obvious why they went out of business.  Too many store owners in the US have really gotten away from providing value for their customers.  During my travels in Asia I have noticed that most companies have a very small markup.  I even have talked to many owners that felt that a 10-20% is fair and ethical, and more is not.

In the US for the last few decades it has been all about getting as much as you can, charging all that the market will bear.  But this mentality is not going to work any longer, too many people now are suddenly taking the time to watch their dollars.  The companies that have ran their business on this model and have grown with borrowed money to take all they can have seen their sales dry up, and their bills come due, with out being able to borrow they are going out of business.  Yesterday during my trip to the mall I visited Dillards.  Dillards had a huge sale, all watches were 50% off, Jewelry was the same, and most every section of the store was the same.  The store was packed, it took 15 minutes just to talk to someone to look at a watch, and people were buying all over the store.  Some of the employees were worried because it felt like the store was going out of business, the check out lady said she was there for many years and has never seen this before.  But for me I know that stores like this are still making money at these prices, and it is much better to sell the stuff and make something than to keep it in inventory.  An hour later I walked into Macy’s.  They have a larger store, and almost nothing was on sale, and because of that there were almost no customers in the entire store.  The employees were just sitting there.  Macy’s is a big and old company, maybe they just have deeper pockets, but more likely they just don’t get it yet.  They both are public companies and both are down over 60% in the last year, lets look a year from now to see who does better.  Dillards will be able to report higher sales.  They took a large hit in their stock price with they announced their October and November sales numbers going down 10% from 2007.

On a side note the company report from dillards says this…

During the four weeks ended November 29, 2008, sales were significantly above the average company trend in the men’s apparel and accessories and shoe categories and significantly below trend in the juniors’ and children’s apparel and home and furniture categories.

I have been told before that when the job market gets tough people tend to dress much nicer, they need nicer clothes to go to that interview or to simply look better on their current job so that they won’t be fired.  People are willing to skimp in other areas.  I just find it great when you find hard data like this to confirm everything you have been taught.

Thanks for reading, I would really like to hear from you about what you think, please leave a comment.

Market Share of FireFox

firefox-logoI was an early user of FireFox, but FireFox version 1 would simply not render many sites that I used.  So I waited.  In the summer of 2007 I decided to try Ubuntu as the only OS on my main computer for a while, and for 6 months I only could use FireFox, by this time they were on version 2 and it worked as well as IE did on my laptop, so I installed FireFox on the laptop also.  It was great.  When I moved back to the US I had left my computer behind so I was back to XP, and then Vista but I still installed FireFox right away.  Then in the third quarter of 2008 they came out with version 3, and my gosh, it is now far BETTER than IE by every measure I tested it with.  I now use it about 95% of the time, there are still a few banks that will not allow FireFox to log in, and of course some Microsoft Sites.

So after all of this I decided to see how many people use FireFox as a percent of the whole.  First I looked at my sites, a very biased view of the world.  On my Treasure Page, a page that existing customers go to the number is 58% for FireFox and 40% for IE.  This number is interesting because we install FireFox on all of the computers we sell, we put both of the icons next to each other, so this means that if given the choice most people choose FireFox.    On our main page for selling computers recent numbers show that 37% use FireFox and 57%  use IE, this is much more like a random sample of the public.

So I decided to look around, and I found that the Global Market Share of FireFox is a bit over 20%.  There is a good company that tracks all of this here.  They have found something interesting also, that on weekends and on holidays the FireFox market share is MUCH higher than on weekdays.  This is mostly due to the fact that most people are forced to only use IE when they are at work, they usually don’t have the ability to install new browsers, and most companies don’t use firefox.  So the numbers for residential usage is probably much closer to 30-35% while the number for corporate usage of FireFox is probably in the single digits.  I hope the good people at FireFox will notice this and try to focus their efforts on fixing it.  It is obvious that people who have the choice choose FireFox, and at least 30% of the public cares enough about the added benefit of FireFox to install it and use it.  I figure at least 50% of the web surfing public can not figure out how to install it or does not even know that it exists.  FireFox then should also work with the OEM Computer Companies to get them to install it.

The only thing I really miss is that in IE I could hit Control-N and it would open a new window with the current window and its history intact, in FireFox it simply opens a new window with your home page.  I have heard other techie people talk about this also, but still there is no option for this.  The best fix I have found is an Add-On program called Duplicate Tab, it basically does this and a few other things.

Tell me what you think, reply down below.

One Simple Change that will rock your world.

I am sure that you have noticed that the media, and what people talk about has really become a bummer recently.  I mean all that I hear is doom and gloom.  It is a fact that the economy is slowing down and things ARE going to be much different in many different areas in the future.  Two main areas will be the availability of credit and the profit margins that companies have.   Many companies simply are too inefficient to stay afloat in this time.  Many companies will close and make all their employees go home, others will cut costs by eliminating employees, both of these factors will result in much higher unemployment.    Bills will go unpaid, people will be evicted, and the masses will feel generally negative.

So what can you do about all of this, for yourself and for your business?  Well the truth is that you must change the way you think about all of this.  Here is the real situation, there has been a shift happening for a while in the way business is done, the way money is made.  Knowledge is the key, creating a better system to do something and then implementing that system is the road to wealth in America now.  It has been so for a long time but the majority still can not see it.  In a time of change, like the one we are going through, there is unprecedented opportunity everywhere.  The larger the crisis the larger the opportunity.  And we are in a huge crisis, it is most likely that the opportunity will never be larger in your lifetime to make serious money, have serious success or to change the world.

So here is the basic change that you need to make.  Every time you hear someone say “Challenge” or “Crisis” or “Recession” or any of the other negative things you hear every day, constantly think “OPPORTUNITY”. Think about how the change has displaced old players and has make openings for you and your business to move forward.  When you hear about how someone can’t get a new car because of the credit mess, think about how money can be made keeping their old car looking like new.  When people talk about going out of business or they are clearing out their inventory to make payroll think about what a good deal you can get, and how you can buy more than you need and then mark it up to others once the sale is over.  (I do this on Laptops, buy at the clearance sales, and sell after the sale is over, or online to those that don’t know about it.)  When a company goes out of business you can look at the strong companies in the same industry and you have just found a good investment.  Best Buy is going to do great in 2009 when Circuit City is gone, that was the thorn in their side and it is gone.  And what about all those people who are out of work?  Well MLM sign-ups are at record levels, everyone is looking for an opportunity to own their own business, and people are putting much more effort into building those business.  Because of this so many new MLM companies have popped up, but many of them are not very good, please read about what makes a good MLM here.  When you see the real estate market just think about the fact that in the long run housing always goes up, and many cities have already started to show signs of recovery.  You can easily find houses that are great deals, get a tenant in there, and have much larger positive cash flow than has been possible for over two decades.  I know people buying houses with 20% down for under $120k and having payments less than $600 a month, then they rent it out for $1,200 a month.  Rental prices have not seen the drop that ownership has had.

So in every area that I can think of there is huge opportunity for the person and company that can see what if going to happen, figure out the correct change to make and implement that change quickly.  During this time you will need to break some ties with your old cash cow that has been paying your bills for the last few years, and focus on what is going to make you money in the future.  Many people will never be able to do this.  I know a very rich and successful guy who has not changed the way he has done business in years, his company has recently had to move out of two of their buildings, fire half the people and make some other huge changes, but they did not change the core of their business, and their business focuses on Luxury Construction supplies in Arizona, and I fear that this is not a market that will come back before this company is out of business.

So look for the opportunity in every crisis, embrace change and reap the rewards.

A change is coming.

For a while now I have not been blogging very, much.  The main reason for this was my leg injury which really limited the amount of time that I could sit at my computer.  I used the laptop but the letter O was missing until I just got a new keyboard for it.  This made my time on the computer much more limited and work took the highest priority.

I now know that another main reason for that was because of the feeling I had that my blog was restricting me.  Basically i started this as a business blog, but recently my thoughts have not been too much about business, it still all comes from a business perspective.  I feel that I have a lot of good things to say that people are interested in.  I am often wrong, and I also often come up with new ideas, and follow them to see where they go. I also felt that often other people did a much better job than I ever could do and they covered the topic I want to talk about better than I ever would so I then decide not to post on that topic, I will change that and just point out their brilliance, and tell my readers to read their articles.

I have noticed that the blogs entries that I liked they most, and the ones that were the most popular are the ones where I tried to explain or simplify a complex topic.  By far my blog entry on “How to buy a laptop” is the number one entry, followed by “How to Buy a Computer Monitor” and “The Mortgage Crisis in Plain English“.   So I have decided that I will post many more entries where I simply take a complex subject, analyze it, and put my opinion.  In some areas I am an expert but in most I am not, but one thing will stay true, I will try to focus on every topic from the perspective of an Entrepreneur.

So from this day forward I will strive to post on this blog much more often.  My leg is feeling better now, and I also now have the keyboard so I can post from the laptop also.  This will make it much easier.  With the new topic I feel that I will have much more to say, in fact I have a huge backlog of topics I want to write about.

The Auto Bailout…….my idea

Well they have been talking for a while about trying to save the auto industry.  The problem is that people just stopped buying cars for obvious reasons, no money/no credit/focus on more important things.

The car companies are very far in debt, this is from loosing money for decades, mostly due to high legacy cost.  This means that they are paying billions each year to pay for health insurance and give money to people who no longer even work for the company.  They also pay more for the ones that work there.  All of this make is very hard for them to compete

Basically it all came down to the Unions, and they know that if they wait they will not need to give up nearly as much.  The car companies will be more desperate and they will have more friends in Washington come January.

So what is my idea.  Well the problem is not enough sales, so lets just fix that problem.   Give people “down-payment” assistance from the government.  Say $4,000 if you, your company or your local government buys a new car from the big three by the end of March or so.   And also get the government to buy cars, lots of them.  They could use them for police work, give them to cities that need them and give them to charities that need them.   If you put $4 billion, into the first plan that would move 1 million vehicles, resulting in about 30 billion of sales for the industry, reducing inventory and solving their main problem.  If the government purchased another $10 billion in vehicles, of course only from the big three, and divided up by 2007 market share, it would basically solve their crisis for the time being.  There would not be any messy loan that would not be repaid, and the government would solve this problem while getting something of value out of it.

The next step to help cut costs is to have the government make labor come to the table and renegotiate terms so that they are more like Toyota, Nissan or Honda, so that our big three can compete.  If we could to that and cut these costs we could save this thing.

Tell me what you think…please comment.