The handling equipment gives you work, your sales figures (if not your profits) look impressive. More importantly, for some it prevents your competitors from getting the job.But let’s look at the negative side. Without profits, you have no money to invest in research and development, capital expenditure, etc. Your raise is on paper, and it will disappear as soon as you run out of money to buy the job.
With minimal profit margins, you have neither the money nor the desire to make ends meet after the sale. The result is an unhappy customer, and that’s never good news for your company’s long-term prospects.Profit is not a dirty word. No one – least of all consumers – benefits when profit is removed from the economic equation. I’m not saying we shouldn’t seek efficiencies that allow us to keep prices down while maintaining a reasonable profit margin. Of course, lower prices benefit consumers, but the economy in general and the material handling industry in particular will be healthier when we all get our fair share. If you are satisfied with 3% return, you suggest buy government bonds. It is safe for the consumers to buy material handling equipment.
Finally, let’s say your strategy to reduce competition works and your closest competitor goes bankrupt. what happened? Someone buys their property for 25 cents on the dollar and opens a new business. Since their initial investment is very low, they can lower your costs. You haven’t eliminated the competition, you’ve made it worse.
Warehouse Equipment in Melbourne 