Thursday, August 12, 2010

The more things change, the more they stay the same

In 1965 I had my first meeting with a convenience store executive. 'My God has it been that long?' It was at the Southland Corporation (7-11) offices on Fairfield Avenue in Shreveport, Louisiana. I was in my early twenties, green behind the gills and trying to sell the guy some radio advertising for KJOE, a station where I pulled a morning shift on the air and sold commercials in the afternoon. He loved to talk about the convenience store business and he couldn't stop himself from spouting out figures I had no way of understanding; but one thing he told me stands out above all else. He said, "At the cash register, if I could get my cashiers to ask each customer one simple question, 'Do you need anything else', I could double the profits in every store."

A couple of years later, while working for the L.M. Berry company, a company that sold telephone directory advertising for Southern Bell in New Orleans, I called on a business that sold prescription drugs and health and beauty aids directly out of a warehouse to the retail market. This elderly gentleman had a huge, Yellow Page advertisement, a bank of secretaries answering the phone, and six motorcycle riders to deliver the customers' orders. When a customer placed and order, he trained the ladies to say things like, "Mrs. Smith. We have a special on Kleenex today – two boxes for one dollar. Would you like me to have the delivery man add two to your order?" Or, "While I've got you on the phone, why don't you look in your medicine chest and see if you'll be needing any toothpaste, aspirin," etc., etc. This guy had a one of a kind business plan and was making a ton of money.

We all know the 7-11 story, and I didn't keep up with the drug store owner over the years, but I'll bet you a dollar to a doughnut-hole — he died a millionaire.

We all have a calling. Either we find it, or it finds us. I rambled around for fifteen years selling advertising for radio, television, newspaper, city directories and telephone companies — I even made a pretty good living selling check writing machines for the Paymaster Corporation; but when a young man visited my computer sales office in 1978, I met my second convenience store operator. Not only did he have twenty or so convenience stores in the Denver, Colorado area, his father was an oil jobber and he told me all about the horrendously complicated federal, state and local taxes on gasoline, and how some were paid to the supplier, some later to the state, and some after the fuel was sold. I must confess, I didn't have any idea what the dickens this guy was talking about. But two years later, in 1980 I sold my little company and started working for a man that had written a computer software program for 'oil jobbers'. For those of you who aren't familiar with that term, and oil jobber (later called an oil marketer) is a company that sold gasoline, diesel fuel, oil and lubricants to farmers, factories, gas stations and government agencies. The majority were branded — Exxon, Mobil, Texaco, etc. and others were independent, like Ride-A-Rose.

During the next year I had the most fun in my life, traveling all over the country talking to jobbers and selling computers, then I struck out on my own, writing my own software and selling IBM computers for IBM. The main reason I decided to resurrect my computer business is because the fellow I was working with, the guy that wrote that oil jobber software, didn't have any software for convenience store management and almost all the oil marketers I met and spoke to had two or three convenience stores on the side and they were having the devil of a time doing their books.

So, I began working with convenience store operators in 1981. I thought then, as I do now, that their greatest problem was controlling the purchasing, sales and tracking of inside items like groceries, cigarettes, beer, health and beauty aids, etc. But profit on gas and groceries were so high, no one seemed to care much about that.

I remember one time while working with a customer in Texas, I was auditing the store's inventory and I found a quart of Mobil oil that had no price on it, so I asked the guy at the station (I'll call him 'Jim') how much it sold for. I will never forget what Jim told me. "I think Leroy charges $1.79 for it, but I usually get 89-cents."

Flash forward to just last week in a store I was setting up for inventory control. I hauled a jug of some off-brand drink out of a cooler and asked two clerks what the retail price was, and you know what? I got the same answer from them that I got from Jim twenty-five years ago. The bottle wasn't priced and they had no clue. Isn't it strange how the more things change, the more they stay the same?

Well I have startling news. There is no profit in gasoline anymore, and suppliers are raking off all the profit from groceries. Where does that leave you? Isn't it time you started paying attention to what's going on on those shelves?

1 comment:

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