Saturday 1 June 2013

Sums


The first truck I bought here hasn’t moved now in eight months, we are doing everything with the newer drop side truck.

It cost me $28,000 six years ago.  I ran it for four years before the driver finally trashed it by running it into a ditch and ripping the front suspension off reducing its value in his instant of inattention to zero.  It cost me, therefore, $583.33 per month.  I was paying the driver (now permanently disabled and unable to drive anymore, not because of the accident but as a result of the subsequent debrief)  $800 per month so the use of the vehicle cost me $1,383 per month.

I could have sold the vehicle for scrap but I didn’t.  Instead I invested $4,000 and had it rebuilt.  If you write a commercial vehicle off the books over five years, at the time of the accident the vehicle was worth $5,600.  Add the four to repair it and I was in for $9,600.  Even on a bad day at the auction, it was a solid $12k so I was still ahead.  If I chose to sell it.

Marcia had other ideas.  I had already bought a new truck so the old one just sat there.  Now any operator of a fleet of commercial vehicles would wince at the thought of all that revenue lost by an idle vehicle and I have to agree.  The situation was not just stupid, it was irrational.

In the metropolis, a vehicle like mine could rake in $500 a day.  But I do not live in the metropolis, I live 80 kms south.  There is no way I could find cargo for it or trust a driver to do so.  He would just run his own loads and return to me just enough to cover his salary.

Consequently, for the last 18 months, this fully refurbished light commercial vehicle has been sitting here doing nothing.  Now in the big scheme of things, $9,600, what the vehicle owed me, was diddly squid in comparison to some of the bills I have been paying but, as I tried to explain to Marcia, if we look after the pennies, the pounds will look after themselves.  Besides, it just irritated me to see a vehicle standing idle.

Many times I suggested to Marcia we ought to unload it.  Sell it.  Many times I was ignored.  The new truck performs faultlessly but Marcia’s supply chains are now so intricate, so sophisticated she  relies on a fleet of trustees all of whom know what she wants and where to buy it and deliver to a central collection point in Benfica.  At Benfica, the bus driver, evidently completely under Marcia’s spell, as I suppose I am, loads it all up and delivers it all to our door.  I defy Fortnum’s to beat Marcia’s distribution system here in Angola. Even the new vehicle has been downgraded to local duties and the old one just sits here.  It’s a case of simple economics.  A truck costs money to buy, it costs money to run and it costs money to maintain.  Added to that, the cheapest we could hire a driver for would be $800 per month even though we only really need him one day a week.

Whereas before it was costing me $1,383 per month not including fuel and maintenance to keep Marcia’s shop supplied,  now it was costing me $200 a week all in.  You have to admit, Marcia knows her sums and with the $600 she had saved, she reckoned she was the bee’s knees.

It was about time, I thought, I showed her how to cut a real deal.

Just to remind you, the vehicle, doing nothing, owes me $9,600 and it costs $800 per month in transport to keep the shop supplied.  I’m writing this up on the blackboard now because I know you are not paying attention.

Yesterday Roddie rang me saying he was coming to visit.  Roddie  (Rodrigues), and I go back.  Roddie lives in Luanda.  He needs a truck exactly like mine,  just he doesn’t know it yet.  And this is the art of selling, you point out a need the client never knew he had.  It doesn’t matter what it is.  It can be a painting.  Unless that painting is on that wall, that wall will forever be boring.  In this case I needed Roddie to realise he needed to get into the trucking business and for that, obviously, he would need a truck.  Just like mine.

I cleaned the truck up and parked it in the middle of the driveway.  This meant when Roddie arrived he would have to park his car up short and walk round the truck.

I had an ice cold beer waiting for him and Marcia, as usual, had a plate of local food to offer him.  Roddie is an ‘Amigo de Casa’, a friend of the house so he gets the full works.

Marcia, as is the custom, was sitting quietly in the back ground just in case a guest needed a refill so could hear everything that was said.

It took an hour and several refills but finally Roddie asked me about the truck.

‘Yeah, I meant to ask you about that Roddie, how much do you think I could rent it out for?  It’s doing nothing as you can see.’

‘You’d need to score three grand a month just to cover your costs’

‘Roddie’ I said, ‘this truck can earn someone $500 a day just running loads between Luanda and Viana’

Marcia was now getting very interested in this conversation.

Please don’t forget, all I am trying to do is sell a truck that owes me $9,600.

‘Jesus, Roddie, ten loads to Viana and ten back again.  That’s ten grand.  But I can’t do it from here.  How the hell am I supposed to find cargo sitting in the Barro de Kwanza?  I guess I had best sell it.  How much do you think I could get for it?’

Roddie looked at the truck, rubbed his chin (a buying signal) and said, ‘Ooh, I don’t know, maybe ask 25 and accept 20?’

‘Roddie’, I replied quickly, ‘It would take me ages to find a buyer at that price, I’ll tell you what I will do, I’ll sell it to you for 12 grand cash’

Roddie had pitched up with a mate, also an ex-employee of mine and he pitched in, ‘I’d buy it for that!’  Now a salesman cannot get a better buying signal than that but this wasn’t the deal I really wanted to cut.

‘Roddie’, I continued before he had time to think, ‘I know you like the truck and haven’t the money to buy it so let’s do it this way.  You said a rental was three grand a month.  How about I rent it to you (with emphasis on the ‘you’ to bond salesman and potential buyer, this deal was unique for him) for $200 a week? ‘

Please note, my budding trainee salespersons, the subtle switch to a weekly rather than monthly cost.  The punter himself suggested a monthly rental of $3,000 per month and had agreed a run to and from Viana was worth $500.  I was now offering a rental of $200 per week.  The only figures in his head he is comparing are 3000 versus 200 and 500 when we all know it is 3000 versus 800 and a lot of hard work getting the loads.  Still, it’s an amazing deal.  So amazing, in fact that Marcia leapt out of her chair and protested.  Excellent, I still have the touch, I just knew she would plug herself into the mains and dive in.  She was now playing the role of a patsy, someone market traders plant in the crowd when they are giving their spiel about the goods responding favorably and buying the first lot in order to encourage the punters to start shelling out.  No one likes to go first so seeing someone else go for it inspires a bit of confidence.  Hence the expression, ‘Confidence Tricks’.

Now I had Roddie’s mate, who has already offered me 12 grand cash for the truck, and Marcia protesting that I had taken leave of my senses and there was no way she would allow me to sell the truck that cheap.

First, I needed to appear to appease Marcia.  I had to convince her.  I could ignore Roddie’s mate for the time being but obviously, if I didn’t cut the deal I wanted, his offer was a nice fall back.

‘At that price, Roddie, you know you are responsible for everything, keeping it road legal, maintained, the lot, how does that sound?’

‘Fantastic!’ he replied.

‘But when the new shop opens, I will NEED that truck’ Marcia protested.

‘Marcia, we only need transport one day per week, for that we should employ a driver at 800 a month and pay the fuel and maintenance?’  Note, once again the shift from weekly to monthly costs. ‘I am sure Roddie would help you as he always has.’  I looked to Roddie and he did not let me down.  God, I am good at this.

‘Marcia’ he said, ‘I will provide you the truck, complete with driver, anytime you need it’

I could tell he was sincere.  Marcia could tell he was sincere.  It was time for me to slip in the fine print, drop the sweetener and close this deal.

‘OK Roddie, you run the truck and pay me $800 per month.  Marcia gets four shopping trips a month into town.  Let me down and you have to provide an alternative vehicle and driver or I charge you 200 bucks to cover her costs.  You are responsible for all running costs but the vehicle remains mine for one year, fuck up and I take the vehicle back.  Wreck it and you owe me 12 grand.  If you haven’t got 12 grand, I take that car’.  I pointed to the car he had arrived in. ‘Are we clear so far?  You really need to be because Marcia will draw the contract up with a Notary Public and I will have the lien on your car as security.  Don’t forget, I know where you live.’

Again, my dear students, note how I asked for only four trips a month rather than one per week.  Four a month sounds like a lot less than one a week.  Also note how I am tying him into a legally binding contract and making him aware of the consequences should he break it.  Since Roddie and I go back, he knows I’m not joking.  Note, however, the phrase I used, “but the vehicle remains mine for one year”.

Roddie was sold on the deal but was now considering the possible consequences of not being able, for whatever reason, to comply with the terms and conditions.  No-one likes to consider the possibility of having their knee caps attended to by a maniac on the end of a hammer action drill.  He took a look at his car which, next to his wife was his pride and joy so it was time to throw in the sweetener.  His wife, by the way, is also called Marcia which led to a hilarious roadside confrontation when, as my driver, I ordered him to stop because I finally really, really wanted to know why when his phone rang he would say, ‘Marcia, darling, I can’t talk to you right now’.  Call me Brian Ferry, I’m just a jealous guy.  Roddie was just being a professional driver and would not talk on the ‘phone whilst driving.  Oh how we laughed afterwards at such a coincidence as we dabbed bloody noses and swabbed roadside dirt from our tunics.

‘Roddie, you pay me 800 a month without fail and give Marcia a shopping trip to town every week, and after one year, the truck is yours.’

‘WHAT?’ Marcia screamed.

Asking Marcia to trust me would be futile.  After all, we have been living together for eight years and I am famous for fucking things up.  But Marcia is one of those very rare creatures, a loyal wife.  Even though her spit was running backwards, she kept schtumm as I held out my hand to Roddie and asked him if we had a deal.  He shook it. I had closed the deal.

The very least I could offer Marcia afterwards was an explanation.

Let’s deal with the risk first.  Obviously, if it isn’t cash on the nail, it’s a risky deal.  I had an offer from Roddie’s mate but I knew he did not have the cash and, like I said, it wasn’t the deal I wanted.  He offered me twelve grand.  It can’t have escaped the attention of any of my dear readers that the fact I elect to live in Angola and am willing to take a swing at blokes far fitter than me suggests I am a bit of a gambler.

I’ve known Roddie longer than I have Marcia.  He is the only Angolan employee of mine with whom I have fought but that was because, paradoxically, we were becoming friends and as men, had to redefine our relationship.  Just because I was the boss no longer meant I was always right, he had the right to an opinion as well as his own wife called Marcia. 

Roddie, having agreed the deal would never intentionally let me down.  Sure, if the vehicle breaks down and he can’t afford to repair it or his driver wrecks it, he may have difficulties meeting his obligations but don’t forget, the reason the vehicle was replaced with a new one and I was faced with a big repair bill in the first place was because Marcia’s driver trashed it.  So whether I give the vehicle to Roddie under these terms or employ my own driver and put the vehicle to work, I face an identical risk.  It’s all a question of greed and trust.  Am I that greedy I would try to extract the full potential from the vehicle with all the headaches that may entail?  Or do I trust Roddie, who will earn nicely out of this, and accept a reasonable return?

So let’s look at the figures.

The vehicle is idle at the moment; it’s earning me nothing and owes me $9,600.  Or…

I will receive $9,600 over the next year in rental.

I will save $800 per month in shop resupply runs over the next year, also $9.600.

So what I have done is turn an idle vehicle that owes me $9,600 into a deal worth $19,200.  And both parties are very happy (a situation ALL professional salesmen know is essential not only to repeat business, but referrals).  Roddie will make a mint, Marcia’s shop will stay full, I have recovered my investment and I have one less vehicle blocking my driveway.

All successful salesmen earn bonuses.  Mine is being able to refute Marcia’s allegation that I am drinking and smoking more than I am earning.  Nearly ten grand?  That’s got to be good for at least three months.

Yes I know it is chicken shit but as they say, look after the pennies…  and the liver will look after itself.

Oh, the video.  I nearly forgot.  If you want to survive two divorces and convince a third wife you are worth hanging onto, this isn’t a bad training film.  He climbs the objection staircase; he overcomes buyer’s remorse, handles numerous distractions and still cuts the deal.  If you want to enjoy a very funny film in which the hero uses all the classic salesman’s techniques to talk his way out of a sticky situation, watch this!

12 comments:

  1. 3.20 am. Why can't I sleep?

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    1. Probably because you're wondering if you'll ever see that truck again! I think I'd have gone for the lump sum... and slept at night.

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    2. It's not the truck, Cro. My health is deteriorating rapidly and Fat Hippo's is still not open. Once I wake up, everything just plays in terrifying technicolor through my mind and I can't fall asleep again. I can't put the TV on to distract myself. We live in a room of 16 square metres. This is our lounge, dining room and bedroom. Just because I have difficulty sleeping doesn't give me the right to disturb my family. So I usually just grab the fags and whisky and go and sit outside in the Jango and fight off mosquitoes waiting for the sun to come up on yet another miserable day in paradise.

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  2. Sounds good on paper. I hope it works out as good as or better than you anticipated. Do I sound convinced?

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    1. No, my dear Columnist, you do not sound terribly convinced. One should never gamble with funds one is not prepared to lose but in this case I am willing to risk a truck that is doing absolutely nothing while Nature transforms it gradually into it's constituent molecules, in this case ferrous oxide. I thought it worth a spin of the wheel. Besides, its presence on my drive was a constant reminder of my own inadequacy.

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  3. You cunning s.o.b.! I don't know why but at the end I still feel that Roddie has been duped. Mind you I was always an idle and confused bugger when it came to Maths...And the reason you can't sleep is whisky. Try a week without your customary "nightcaps" and you'll find you are sleeping longer and more deeply. This will benefit your daytime demeanour.

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    1. You don't just get your own reply, you get your own post!

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  4. Being shy and retiring I have developed only one negotiation tactic over the years, and it's only of use when folk really, really want to sell to me or hire me. Silence.

    The last car salesman I had dealings with couldn't handle it. I went in just before the end of the month and just before the quarter was up, chose a cancelled order that was sitting guiltily in the showroom next to his desk and let him talk. And talk. And talk. I didn't bite until he was in tears and down 30%.

    Once had a Kirby vacuum salesman knock on the door and ask to demonstrate - oddly for vacuum salesmen they're known for high-pressure tactics. I told him on the doorstep that the answer was "No". I was bored, I let him in. Two hours later, after he'd vacuumed every nook and cranny AND shown me how it could shampoo the entire lounge/dining room carpet he gave up. He shook my hand, told me he'd run out of tactics and that this had never happened to him before. I had a really clean house...

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    1. I'm sitting here dead silent. I have a full bottle of scotch and two packets of fags, Let's see who cracks first.

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  5. I remember a time when a driver earns $200 per month. I guess things have become more expensive/equitable in the last 7 years. Hmmm 7 years is a long time. Perhaps not as long as it will take for either you or Ian to crack first.

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    1. Salaries are improving Nige but you can still get a 'driver' for 200 bucks but don't expect the best service!

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Please feel free to comment, good or bad. I will allow anything that isn't truly offensive to any other commentator. Me? You can slag me without mercy but try and be witty while you are about it.