November 30 - December 15, 2005
Volume I Issue 20
A Deal is a Deal
A deal is a deal.
Except when it isn’t.
I alluded to this is my last issue, and said this was a topic for another day.
This is that day.
We all know that Christmas is coming, and that there are sales before
Christmas. We also know that there are often even bigger sales after
Christmas. Now, you might not do this, but if you have the receipt, you can
take that Christmas gift and go back to the store and get the lower after-
Christmas sale price. If the store gives you a hard time, you can simply
return the gift and then re-buy it at the lower price.
Now some might consider this kind of behavior to be petty, cheap… choose
your own adjective. Others might consider it to be just plain smart.
In some businesses, like paper for example, this sort of thing is standard
practice. You cut a deal and set the price for 90 days, but if the price moves
lower, you have to re-negotiate. Or, you win a government bid (the infamous
TSB – tax supported business), but never see an order because the market
price has fallen, and the buyer can do better in the open market.
Can you imagine going into a casino, placing a bet, and collecting when you
win but getting a refund when you lose? I’d love to find that casino, but such
a casino wouldn’t stay in business long enough for me to find it.
Unfortunately, paper companies are too often running their businesses
pretty much like that mythical casino.
As I’ve been known to say, when you quote on a bid, two things can
happen, and they are both bad: you can win and you can lose. If you lose,
you lose, and if you win, you have a commitment at a given price, but it’s a
one way street. If that is a good deal for you and a bad deal for the buyer,
you might never see an order. On the other hand, if it’s a bad deal for you,
you’ll see plenty of orders – possibly too many.
Why would anyone do business this way? That should be obvious, but if it
isn’t, go back and read my last issue: “The Tonnage Disease” at http://www.
Fortunately, it doesn’t have to be this way. While the tonnage disease is
very difficult to cure, some of the symptoms are treatable, and even
For help with the Tonnage Disease, call the Doctor at 203 925 0326, or email
Jack Miller at email@example.com
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