Business Update as of 8/27/2021
Hey Everyone!! I just wanted to share a bunch of things that have been on my mind with the group.
I prefer to do it here on the Forum, to cut down on all the BS that happens on Facebook, and happens because of Facebook.
Some of these are just totally random things I am sharing with people, that I normally deal with myself, but feel need to be said.
I'll do my best to keep it organized, but assume it will look like a train wreck to some people.
Here we go!!
FIRST and FOREMOST, due to the reasons below, we are having a MONSTER SHOP CLEARING SALE for awhile, so please, check out the website, and get your orders in for all the reasons stated below!!
DON"T miss this chance and then be "One of those guys" who bitches about not having stuff, or having to pay a higher price when SHTF, which WILL happen again here before long.
A lot of people have no clue what it takes to run your own business, and especially what it takes to run one in such a niche market. I had no clue when I started, but I sure have found out over all the years.
In the last 3 years, I have seen more changes in the market, the world, and the way that people in general are, and it has been very dis-concerning to me.
My shop has seen a lot of people come and go. Some good people left that we miss dearly, and some people just weren't cut out for being here (Or anywhere for that matter).
It is always a constant struggle to find, and keep good people around the shop for various reasons.
The biggest issue in this industry which is different from any other I have seen, is how to pay people. It is a VERY slim margin industry, regardless of what people think. Almost every business has to make at least 35% profit just to stay alive, and many more have to be way higher than that. During the entire time Trump was in office, and Pro 2A people relaxed on the shooting sports, hundreds of businesses in this industry went broke and closed their doors. It was due to lack of sales, and all the businesses fighting to get to the lowest price as quickly as possible. All of them were not in a position to spend 4 years losing money to still be around once the industry "Woke Up" again.
Every one of us goes to work, and has to make a living wage. It is just the way of the world. If we don't get what we need, we have to seek other employment, and hope we can do better somewhere else. In this industry, paying by the hour is an absolute killer (And I believe it is in most industries) because people tend to saddle the time clock, and ride it eve if they aren't doing anything at all. They spend 20 hours a week really making money for themselves and the company, and the other 20+ hours, milking the clock for themselves, and costing the company money.
I was NEVER in a position where I could have kept this company going like that. Hourly was never going to work in this environment. When I started this company, I had to sit down for countless hours per day, and figure out what was an effective "Piece Rate" for every job in the shop. People are paid by the bucket to sort brass, by the piece to process brass, per box to ship items out, etc. The list is literally 100 "Jobs" long, and each has a piece rate associated with it.
The issue with piece rate jobs is, if there is no "Pieces" to be done, there is no paycheck until there is work, and that is truly a tough lifestyle for a lot of people. Not knowing from day to day or week to week what you will be able to make when you go to work. That is part of why we have lost so many good people throughout the years.
When I started this business, it was out of necessity. A work related accident left me partially disabled, and unable to work for anyone else. I needed a way to support my family, and used the thing I knew the most about in my life to try and make a go of it. For YEARS, I did my best to take care of my guys, and give them as much as possible to do the jobs I physically can't do. I had an average take home pay of less than $400 a week, working 16hr days for years after starting the business.
This market is usually feast or famine, and the last year I have watched people post all sorts of horrible things about small businesses, and even the big ones, when it comes to pricing of items during the "Panic" we saw. I would like to explain it to any of those misguided people here. Obviously they have never run a business, and have no clue how the business world actually works.
I saw tons of people call businesses 'Price Gougers" or complain about prices that were 2x or 3x higher than they used to be. Bo you know why that is? Here is a little scenario, and how it really works. The numbers are just for reference.
A company, in normal times can get all the product it wants, and has to make their 35% minimum profit, so they price it accordingly, but in a normal market, there is serious competition between all the people in the niche market. Everyone tightens their belts, looks for the best deals, but ultimately has to cut people and take other steps to make sure they can keep the doors open. Some win, and some lose. Some are still here and tons had to close up shop.
We'll say the company, with 4 people total, was selling $100,000 a month in product, and was making $30,000 profit. The IRS takes about 25% TO 35%. So we'll say they have $20,000 left. Add in the overhead like Rent, Utilities, fuel, maintenance, and about 10 other things like insurance that eat into that money, they have $12,000 left over. Divide that by 4 people, the average guy takes $3000 a month, and still pays income tax on it, so his take home is $2400 for a month, or $600 a week. People deal with it, some months are better, some worse, but they keep cruising along. Some people stay, some go, but they keep it rolling.
NOW, we have a panic like we all saw for the last 16 months. Now the company can only get 1/3 of the products they were averaging before, if they are lucky. So now they get $33,000 in products, to last an entire month. The rent, utilities, insurance, etc don't change at all. Now their NET profit that was $12,000 is now $4000 for a month. Every one of the 4 guys now makes $1000 a month, Minus taxes, and takes home $200 a week or less.
So what does that company have to do to keep the doors open, and keep employees that are a vital part of the business? You have to sell the 1/3 of your normal products($33.333 worth) you are able to get, for the same $100,000 as before, just to keep on with a "Sub Normal" lifestyle, and to keep the shop open.
Then you see people calling you "Price Gougers". It is business, and people do what they HAVE TO DO, to be there again when things return to normal. If they could still get unlimited products, at normal prices, and jacked them up another 66%, then they are Price Gougers, but that NEVER happens, as they can't get the supply, and at the same price.
