Wednesday, June 11, 2008

How is the Price of Gas Affecting Your Business?

On our sister Website at, Lee Distad looked at the price of gas and how it's affecting the custom installation business; and gave some tips on how to help your business save money. Installation staff and salespersons are most certainly feeling the heat, since they're quite often on the road visiting clients. But there are other areas of the CE business that's feeling the gas gouge just as hard, if not harder.

Sales representatives are the first people that come to mind, many of whom work independently, and spend a huge chunk of their time driving from store to store. At my last fill-up in Toronto, gas was more than $1.30/litre! This has to put a dent in their wallets, not to mention cause their visits to become few and far between. Can this lead to strained relationships with dealers? After all, if Bob the Sales Rep used to visit every week, and now all of a sudden he's only in once a month, can this be wrongfully interpreted?

Then we get to delivery guys. Can retailers, especially small independents, continue to offer free delivery services to customers when the price of gas keeps inching higher and higher? Where will these extra costs be placed? On the price of the product itself? Or will retailers simply have to "eat" the extra few bucks per delivery? It might not sound like a lot, but it adds up.

That leads to the manufacturers/distributors who often ship products through third-party courier services. Are they charging additional transport fees to the retailers? Will couriers increase prices to offset the growing numbers at the pump?

As you can see, the rising price of gas affects more than just the consumer. So if you're buying a big ticket item and have to pay for delivery when you never had to before, don't blame the retailer, at least not during these trying times. And if you don't have to pay, appreciate that offering even more now. As for retailers, if your sales rep is skimping on visits as of late, it probably has nothing to do with your relationship, or your importance as a business partner.

Let's hope that pricing comes down to a reasonable level soon. Thankfully, it's summer in Canada, so we're bound to see more and more bicycles and roller blades on the streets anyway. And with the current price of gas, we might see more of these alternative means of transportation than ever these days!

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Lee_D said...

As it happens, I was talking today with one of my sales rep friends. He puts in about 100km a year covering. He said that last year his average fuel bill was $500/month. His bill last month was $1500! That definetely hurts.

Reg said...

As a Manufacturer Rep selling mostly US-based product lines throughout Canada, I've had to deal with the effects of the shrinking US$ exchange rate putting the squeeze on my income compounded with the ever increasing costs of gas, air travel, shipping, etc...

Unfortunately, I'm not able pass on a "fuel surcharge" to my customers when I visit them...