Profit Siphons Exposed

After 18 years serving clients as an office equipment sales representative/employee, I accepted a partnership opportunity to start a new dealership.

During my transition from sales rep to dealership principal, I discovered how much “I didn’t know I didn’t know” about the inner secrets of my industry. It was a humbling experience after having invested over 18 years and thinking I already was an “industry insider”.

It occurred to me that if I didn’t know these “industry insider” secrets after working inside the industry every day, there was no way that as a customer you could know either…and that fact is costing you hundreds of thousands of profit dollars. I coined the term “Profit Siphon” to describe the gap between information that’s available to you as a customer and the vendor’s “industry insiders” secrets.

When asked why I maintain that Profit Siphons are invisible, in response, I ask what information you feel is available to you as a customer. Depending upon your company and the effort invested by your procurement team the answer varies from one to all the following:

• Your current product/service, current costs and vendor support offering
• Results of a bid request to your incumbent and competing vendors
• Cost and vendor support information from peer sized company
• Cost and vendor support information from a GPO organization

Even if you know all 4, you still don’t know what’s possible.  And not knowing what’s possible is what makes Profit Siphons invisible.  It’s this gap where Profit Siphons live.

Every organization has Profit Siphons and they’re always larger than imagined.

For more a complimentary Special Report exposing the 19 reasons Profit Siphons are stealing your hard earned profit,           click here.

To effectively eliminate Profit Siphons it requires 4 critical components:

• An intimate knowledge of an industry’s cost components and cost of goods benchmarks. And this knowledge needs to come from inside the vendor side of the industry, not the buying/end user side.

• Firsthand knowledge of an industry’s service support capabilities and cost of goods benchmarks.

• A thorough knowledge of the industry’s language and unique jargon. You must be seen as an “industry insider” or peer to be presented the very best the industry has to offer.

• Daily involvement in the industry.

If you immerse yourself in an industry only once every 3-5 years (managing your current vendor doesn’t count) the refamiliarization ramp-up is time consuming, brain numbing and you’ll inevitably miss nuances and details that will be costly. 

After selling my interest in the dealership, one of my business owner friends asked if I could determine if he was losing profit. I reverse engineered the vendor’s sales process to eradicate the Profit Siphons that I already knew were draining his profits.

Vendor communication was constructed in a way that the vendors understand they are working with an industry peer and respond accordingly.

The hard dollar results for my friend’s company were staggering.  It was here that BottomLine Advantage was born.

Then we designed a business model for you that ensures profit loss recapture to be stress and risk free: