12 June 2012 - 7:06The Dangers of Retail – A Parable

I realize I’m probably going to cross a line here, but I don’t care.

Once upon a time, there was a bike shop, and one day a young gentleman came in with a broken front quick release skewer.

“I need the cheapest one of these you have”.

The owner happened to be working, and quickly found a new Shimano steel skewer, much like the broken skewer that had been presented.

“How much?”
“$10″

Digging through wallet. “Would you take $8?”

“No, it’s $10″
“I have $8 and a Bic lighter”
“Sorry, the price is $10″

Customer leaves to go digging around in his car for $2, comes back with $8, a Bic lighter and $5 CAN in Loonies.

“I’m sorry, but I don’t take Canadian money. There is a bank across the street, and they can change it for you. The skewer is $10 US.”

Customer leaves again, and finally comes back with a $10 bill, plus $3 for the owner’s “trouble”, and promptly begins a line of questioning that could come across as slightly insulting, if not borderline hostile, to the bike shop owner.

“Are you from around here?
“Are you the owner?
“Well, I work in retail and… barter is an important part of the sale, and… hear bad things about the service in this shop, and…”

The owner quietly listened to the concerns of the young man who had to jump through so many hoops to get a cheap wheel skewer and thanked him for his feedback and bid him good day.

Now take a few minutes to think about this. Is someone in the wrong in this situation? Was the customer wronged by an unobliging shop employee? This story is not fictitious in any way, in fact, it played out before two other witnesses. This story was the defining interaction of my Monday. Now I did take the liberty of omitting some of the circumstances that might have changed the tone of this interaction, because, let’s face it, the customer is always right. Right?

Customer walks into said shop talking on his cell phone. Does not stop talking on cell phone after part has been produced and price has been established. Customer leaves in a huff to find “correct change”. Asks strangers in the parking lot for money to complete the transaction.

Now, let’s think about simple economics shall we? We are in retail why? To make money. And we all now there isnt much money to be had on the biking industry. We do this for love.

I present to you, exhibit A:

the skewer

Available from QBP at $9.22 wholesale.

$10-$9.22 = $.78, not much of a margin, but the customer did come in looking for a deal. And I was in a managerial position to oblige. Now think about what it takes to get that item in the store. It had to be shipped there, so there is some sort of shipping charge associated with it. I calculate that for the size and weight of this single item, it may have added another $.55 to the cost of the skewer. So really, it costs $9.77. You can’t really pay rent or really any other bill with a $.23 sale can you?  In fact, that isn’t really worth anyone’s time.

So let’s back up once again.

Customer talking on phone apparently did not hear me say, “these are $15, but I’ll give it to you for $10.”  Seems like a pretty damn fair price right? On both counts really…

But I can completely understand his frustration. It must have been humbling to have to leave the store not once but twice to get the $10 necessary to procure the necessary funds for the part. Every time I go to the Ford dealership and ask for one of these:

Raptor

they ask for $50K. I do not have $50K, and therefor no Raptor. I don’t even have a colorful Bic lighter to sweeten the deal. So I leave in a huff.

We have in this particular instance, reached the epic climax of this transaction. Customer needs the skewer, and is now so pissed at me for being so unyielding in my price, that not only has he had to battle the Hydra to get the missing $2, he also came up with a little extra, to toss me some “fuck you bucks” so he could in good concience buy my time and tell me how I should run my business. Question my fairness. Let me know how I have wronged him. To teach me a lesson on how retail and “barter” works. In front of other customers. Who he had asked for money from in the parking lot.

The last paragraph in the story is exactly what happened.

The owner quietly listened to the concerns of the young man who had to jump through so many hoops to get a cheap wheel skewer and thanked him for his feedback and bid him good day.

$10. I could have just said I didn’t have the damn skewer. Maybe I should have just said it was $15 and saved both of us all a bunch of harrumph. I wanted to tell him something else, and invite him to never show his face in my establishment again, yet I held my breath.

So, what is the moral of this story?