Goodby camping world??

[jackhartjr]

Most of us Scenicruiser guys have a kool little system for obtaining parts...bartering!
Jack

[rv_safetyman]

Wow, good thread.  However, it sure hits close to home.

As most of you know we have a business that does not have a store front.  Folks would think that because of that, we should make a good profit.  Just NOT SO. 

Most folks have no idea what costs are involved in running a business.  We have to pay things like unemployment taxes even though I am the only "employee".  We have to pay freight to us for our product, and many times our competition will not allow us to charge shipping. Speaking of shipping, we have a fixed weekly charge from UPS even if we don't ship.  Because we are small, our credit card charges are at the 5% level and again, we have a fixed monthly charge.  We have a fixed charge for our website and e-store.  Then there is postage, printing, travel to trade shows, insurance (I can't afford the $5-10K per year for the proper coverage, but still have to lay out about $1K per year for related business insurance), advertising and the list goes on!!!!  Oh, and then there is the product returns that we have to eat, because the manufacturer denies credit.

We have a reasonable margin on our own product, but even there we have not begun to pay off the development cost of over $10K.  On our other products or margin is from 30-50%.  sound like a good margin, look at the list above and you will see why we should have shut our doors a long time ago.  For a long time, we supported the business with our own funds, but that has tanked, so we are selling some of our "toys" to be able to hang on.

Bus folks are really fun to deal with, but they are not a large market.  They are loyal to suppliers who are a part of the group (thanks for the purchases guys!!!!), but most of us struggle to get the funds for the next bus project and just can not justify purchasing all of the various products that we vendors offer.

Craig, the CCI unit you have, is the same one I sell with my system (so that the propane can be shut off in the event of a fire).  I tried contacting them to get a few more for my inventory, but they have gone out of business from everything I can tell (website no longer available, phone disconnected).  Just another sign of the times.

Sorry about the downer message, but the only way to become a millionaire in the bus or RV market is to start off as a multi-millionaire.

[jackhartjr]

"Speaking of shipping, we have a fixed weekly charge from UPS even if we don't ship."
That's why I probably won't be starting a 'bidness' anytime soon.  BS like that!
Come to think of it there are a lot of things I might purchase that I don't because I don't like paying the sometimes high shipping charges!  And I am not talking about paying $7.00 shipping for a $3.00 part...it's like the post above...if the $3.00 part has some bulk or weight I expect to pay...however not when it goes in a first class envelope and gets a stamp or two!
Don't get me wrong, I expect to pay for shipping...I just don't like to pay 'too' much!
And RVSafetyman...I am not bashing you in any way with this post. 
Jack

[Jeremy]

rv_safety - Nicely put. It does annoy me how so many people seem to think a 50% profit margin is unscrupulous, if not borderline criminal, when in reality it often barely covers the businessman's costs. Oddly enough though the people who think that have invariably never been in business themselves.

Jeremy

[rv_safetyman]

Jack, I fully understand.

I thought long and hard about posting my previous comments.  I too, want to make sure I did not offend any of the readers.  My intent is to let folks know that it is really hard to run a business and make a profit.  I worked as an engineer for a big company all my life.  I thought I had a good idea and thought how hard can it be to "set up shop" .  Well, five years later, I am a lot smarter (and that is a relative statement ).

On my long list of expenses, I left of a lot of items.  Most of these expenses are not a huge deal if you spread the cost over lots of sales.  In our case, we tend to carry rather expensive products and the sales are not large.

Dallas, if you can get into business on things that folks NEED, and they are huge in cost, you might be able to make a go of it.  Even if they NEED the product, if it is expensive, bus folks will find a way to work around the need with a lower cost soulution.

Now to shipping.  We are caught in a catch 22.  My wife has to ship her product and UPS daily pickup is really convenient.  It also allows us to ship from our bus when we are on the road.  We can process the label on the computer, paste it on the package and find a close UPS drop off point.  

An extremely small number of all products we buy can be shipped with a few stamps.   As soon as you get a pound or two, you are talking dollars (either USPS or UPS).  Every time I process a UPS shipment, my blood just boils.  However, we have checked USPS and after the first pound or so, they are about the same and the more the weight, the better the UPS rates are.  Also with UPS we get tracking on every package and can insure the package very easily from the comfort of our home or bus.

Probably this has me more riled up than normal, since I just had to get our taxes ready and looking at the expenses about put in the coronary care unit.

When I order things over the internet, I consider the shipping to be offset by the fact that we often do not pay taxes.  I also am very careful to only order from folks who charge a FAIR shipping charge.

[cody]

I realize the headaches of being in business, I've watched from the sidelines as several of my friends deal with the day to day headaches, I've endured my share of headaches that were business related, a person could work a lot fewer hours and get a sizeable increase in income by working for somebody else but somehow we seem to enjoy the "freedom" and independance of operating our own business. We've avioded all semblence of being a viable business years ago, for the past 30 years we've enjoyed doing photo work of all sorts, we've recorded countless weddings, some more than once lol kids that we did their student pictures have brought their own kids to have their pictures done, all recorded on film, mostly medium format.  Long before the digital age destroyed our love of medium format we had switched mainly to baby pictures, and nursing home groupings. Anyone that has tryed to take a picture of 5 children under the age of 4 years old is familier with trying to record an explosion on film.  Our music became an offshoot of the photo work, we'd do the wedding photography, then provide the music for afterwards, worked out great but slowly shifted to doing benefits for fire victims or some other worthwhile endeavor.  I found more enjoyment in doing the project for free or for the cost of the material than to try to fight the rules and regulations that the government seemed to require, I follow that same line of thought with the sawdust, a cup of coffee or the price of the material means as much if not more than a check to me at this point in my life.

[junkman42]

Rv-Safetyman, As a former business  owner in Florida I had to pay unemployment tax on both Myself and My partner even though We owned the business and had no other employees.  The best part was because We owned more than Two percent of the business We could not draw unemployment benefits.  We had to carry 3 and later 5 million of liability insurance in order to gain access to industrial plants to service machines.  Did We get rich?  I think You already know the answer to that!  Regards ,John

[rv_safetyman]

Sorry to keep posting, but the replies keep triggering more thought.  When I was going to school, I worked for Sears.  I worked in the hardware department (kid in a candy store?).  Our books that we used for inventory showed the purchase price for all the product.  I could not believe the markup (4 times in some cases)!!!!  Now in my wiser old age, I understand why.  Along the same lines, when I was working for Gates, I knew what our belts sold to John Deere for.  When I saw what John Deere sold them for (again in that 3-4 times range).....same story.  These companies have huge overheads and tremendous inventory costs.

I will share with you that we have a markup of 30% on our PressurePro product (that is the case for every "small" dealer for every tire pressure system - I checked).  You read that correctly THIRTY PERSENT!!  By the time I pay shipping to me (and to the customer - freight free at that sale level) and CC processing, I am down to about 20% margin.  I have even thrown in a significant discount to bus folks in the past.  Throw in having to swallow a few sensors, and you can see why I am not very smart to stay in business

Craig, back to your original question (now long lost because of folks like me), Onan is now owned by Cummins.  I have found that the dealer's prices are not that far out of line - at least on some things.  You might check with them.  

Jim

[luvrbus]

Most of your parts are dropped ship.I tried to pickup parts at PPL in Houston once to save the shipping only to be told that they didn't have the parts there and shipping was the only way I could receive the order.  

Same thing happen on a 2500w Onan I bought in Oregon it had to be shipped.
As a retired business owner after 30 years you guys can have all the business large or small I for one do not miss the headaches of a 120 employees and taxes.
The 50% profit margin you are talking about my bussines wasn't setup that way we had labor, taxes ,insurance and overhead then a whopping 5% profit if lucky but it still was not a 50% markup  good luck

[HighTechRedneck]

rv_safety - Nicely put. It does annoy me how so many people seem to think a 50% profit margin is unscrupulous, if not borderline criminal, when in reality it often barely covers the businessman's costs. Oddly enough though the people who think that have invariably never been in business themselves.

Jeremy

My business related credentials:

Supermarket industry - 10 years in a major regional chain supermarket, 8 of those in management, 2 as store manager (received the top District Level award both years).  That career included formal retail management courses via Texas Tech University.

Wholesale to grocery industry - 10 years in $1B+ snack food company.  5 in field sales management (received awards each year, inclding the top award once), 5 in HQ Marketing management (received the top level performance based bonus each year).  That career included numerous formalized training programs related to business management, sales and marketing.

Self employment - 8 years.   

• 6 of them operating my online photo gift business that did quite well until Wal-Mart and every other major retailer jumped into that niche.  I charged actual shipping cost plus actual packaging cost.  My gross profit margins were 50% on mdse we produced and 35% on inventoried pass through mdse (stuff I had to pay for first) and 25% on drop ship pass through mdse.
• 2 years doing contract work for the govt.  That wasn't much of a "business" and had nothing to do with sales, but I was completely on my own and planned out, managed and executed my own operations, supplies, expenses and risk.  So it was something of a primer for future management/business ownership positions.

So, in a nutshell, I think I am qualified to make observations on the topic.

[Jeremy]

HighTech: My comment wasn't aimed at you in fact, but perhaps I should have gone a bit further and explained that I was of course refering to the profit margins required in the type of businesses being discussed in this thread, which obviously are worlds away from, and shouldn't be compared to, those acheived in the FMCG sector (ie. supermarket / grocery / high volume household etc). I remember from my time at university that the most profitable supermarket group here was acheiving a 6% gross margin at the time, but that was 20 years ago and I've no idea what it would be now.

Jeremy

[rv_safetyman]

Hope this does not come up twice - hit the wrong button.

From redneck's reply, it sound like some of us have ruffled some feathers.  I sure hope not!!!!  I think we have a communication problem here.

Just to make sure we are all on the same page, I (and I think Jeremy) are talking about what I call product margins. When I say that my margin is 30% on TPMS systems, that DOES NOT translate to PROFIT.  That is the difference between the raw price I pay and my selling price.  It DOES NOT include any costs of doing business.

Luvrbus and others, I also wonder why a 66 year old fart would want to be in business.  Not a day goes by that I don't ask myself why.  Well, you folks are part of the reason.  I get to meet a lot of neat folks and do a lot of fun traveling in our bus.  I loose money every day and am in hock up to my eyebrows, but for some stupid reason I can't find the courage to pull the plug

Jim

[jackhartjr]

Jim, I am pretty sure nobody has been offended here.  I think we have probably learned a lot.
I beleive in profit...we are all in it for a profit...one way or another!
I do not like being ripped off.  And some of the shipping costs do that.
I ordered a little box of set screws in SS for our sailboat from Jamestown Supply...I think I paid $9.00 for shipping...I turned around and mailed friends with sailboats 13 set screws each...@ 50 cents for the envelopes and less than a dollar each for the shipping!
Jack

[HighTechRedneck]

Thanks for the clarification Jeremy.  I just wanted to be clear that while I may not be able to speak with experience and authority on how to rebuild a 6V92, I do have the credentials to back up what I have said on this topic. 

My supermarket tenure was back in the 80's. 

When I am referring to Gross Profit Margin in the context of this thread, I too am referring to product margins, not the overall business.  Gross Margin After Operating Expense is a whole other matter.  And Net Profit After Taxes is yet another (and the one that truly matters most).

Running a small business anymore is a mental illness every bit as much as being a bus nut is.  Once you have it in your blood, it is very hard to go back to work for someone else.  What work I do now is self employment and I may yet take another run at a full scale business.  (I am HighTechRedneck and I have a problem.  )

[belfert]

I worked at a large computer retail chain in the early 90s.  We were told that the store needed a 14% margin to break even.  Some items such as HP laser printers were basically sold at our cost because that is just the way HP did business.  We had to make up the zero margin on HP printers by selling lots of cables and accessories with mind boggling margins.

The store I worked at did $100,000 and up in sales per day.