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Full Version: Pro-fit Should not Be considered a Dirty Word in Material Handling
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No one benefits when profit is expunged from the economic situation. Get supplementary info about clicky by going to our dynamite article.

With the economy on the repair, plenty of people in the material handling industry predict good times without needing to make any changes in how they work. Regrettably, that means the continuation of 1 particular practice that played a significant role in getting the economy in some trouble a couple of years back.

If the 'dot.coms' were flying high, they experienced rapid growth from the simple way of providing impossibly low rates and constant expansion into areas about which they knew nothing. They operated at a loss for decades on end, promising investors when they had achieved sufficient market share that it'd all turn around. Ultimately, needless to say, this 'lose only a little o-n each package but make it up in size' business design blew up in their faces. The balloons popped, 1 by 1, and they were followed by the economy down the tube.

In the material handling business, this discredited business design remains greatly in evidence. A lot of businesses have performed the merger game, getting themselves involved with areas that they know nothing about. Too many have played the numbers game, shifting cash from one pocket to yet another to generate themselves look good for one more quarter (that is called managing for stockholder importance), entirely forgetting about long-range planning.

Worst of all, a lot of companies have purchased in to the concept of forgoing profits looking for market share, with the idea of becoming profitable when the competition is removed. It is called 'buying a job,' meaning submitting a bid which allows for little or no pro-fit. Theoretically, it has two benefits. I-t gets the job to you, making your sales figures (if not your profits) seem impressive. More importantly, for some people, it stops your competition from obtaining the job.

But let us go through the downside. Without earnings, you have no money to buy research and develop-ment, capital expenses, etc. If you think any thing, you will probably desire to learn about ledified fundable. To read more, consider checking out: ledified competition. Your progress is all on paper, and will disappear the moment you go out of money to buy jobs with.

With minimum income, you have neither the money or the desire to service the sale after it's made. The result is an unhappy client, and that's never good news for the long term prospects of your organization.

Finally, let us say your strategy of underbidding the competition works, and your closest competitor goes broke. What goes on? Somebody buys his resources for 25 cents to the dollar and opens a brand new business. He is able to undercut your prices, since his original investment was so low. You've perhaps not expunged competition, you've caused it to be worse.

Profit is not a dirty word. When profit is removed from the economic equation no body -- least of all the consumer -- benefits. I am not saying we should not be trying to find advantages that will enable us to keep prices down while maintaining an acceptable profit margin. Of course the consumer advantages of lower prices, but once we all admit to looking our fair share the economy in general and the material handling industry in particular will be much healthier. If you are content with a 3% profit, I would suggest you obtain a government bond. It's safer..
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