Monday, November 10, 2008

Fair Business in an Unfair World

I hate it when being a small business owner presents me with moral dilemmas that I have neither the desire nor the capacity to confront.

I recently made the decision to split my grocery order in half and receive two small deliveries a week rather than one large delivery once a week. This works much better for us all around, in terms of making the best use of my limited storage capacities; plus, it controls labor dollars by keeping me from having to bring on an additional staff member just to help put the stock away. My supplier requires a $500 minimum per delivery, and since we are (finally) able to meet that requirement with bi-weekly deliveries, this looked like a no-brainer to me.

But, of course, it can’t be that simple, can it?

Ever since my old grocery company made the misstep that forced me to make the change to a new supplier, I have been very vocal with my new sales rep about how difficult it has been, as a small business in a small town, to get any service from any supplier, much less decent service. Every time I see this poor guy, I beat him up about prices and products I can’t get, just because I’m a small independent restaurateur. The whole system is skewed to favor huge, multi-unit operations. He knows it and I know it. And he knows I know it, and I’m not going to let him forget it.

This supplier’s entire pricing system is based on volume: The more you order, the lower your prices. For instance, if I buy an average of $4000 per month, my price on a case of widget sauce will be $X. If my average purchases are $5000 per month, my price on that same case of sauce will be 95% of $X. If I should be so stupid as to ask them to split that case of widget sauce for me, I will pay 25% more per unit. And, I have discovered, there are products out there that they literally will not sell me because some big chain restaurant has “confined” the stock. If this doesn’t look like a conscious, deliberate effort to put the little guys out of business, I don’t know what it is.

So, poor Mr. Sales Rep has had to sit across the table from me, twice a week for the past four months, and listen to me gripe about the system. He has tried and tried to assure me that The Company values my business, and that my puny little account is as important to them as any other. I want to believe him, but the evidence proves otherwise. In fact, last Monday he showed me something that put another nail in that particular coffin…which happens to be the “moral dilemma” I am trying to deal with now.

When I finished reading him my order last week, Mr. Sales Rep spent a few moments tickety-ticking on his laptop, then he turned the thing around so I could see the screen. It showed the total cost of my order, the total profit margin on my order, and my salesman’s total commission on my order. The cost of the order met the $500 minimum. The profit number I was not particularly interested in, but my sales rep’s commission was ZERO. Zero. He did not make one dime on my $500 food order, and he spent at least an hour just sitting there with me, not to mention the gas it took to get here and etc.
It seems the profit on any given order has to be a minimum of $60 before a salesman can collect commission. And apparently, that $500 minimum order does not necessarily guarantee a $60 profit for the company. So, if I place my orders in the way that makes the most sense for me—dividing it into two smaller orders instead of one big one—my sales rep makes NO MONEY on my account. How very motivational! Tell me that he is going to be just as solicitous of my business as he is of a larger account when he makes no money from me.

What the hell kind of a way is this to do business? Why is business so skewed toward the negative nowadays? Time was when sales people were compensated for any sales—maybe not very much, but if they brought in a dollar for the company, they made something on it. If they were very good, very successful sales people, they would receive bonuses for increasing sales or making large sales. They could make a good living for being good at what they did. In this day and age, however, if you bust your ass and over-achieve, you might be able to make ends meet as a commission sales person.

Why do big companies believe that the only way they can make money is to rip off their employees? The executives and the stockholders get the best of the spoils. The leftovers are thrown to the employees—those people upon whose backs the money is brought in—as if they were the dogs under the banquet table. And if there are no leftovers, the employees get shafted.

So here I am now, looking at one of the few companies willing to do business with a small restaurant in a small town…and their stupid, avaricious business policies just make me sick. I SO want to tell them to go to hell; that I won’t do business with a company that can’t even pay their sales people a fair wage. Of course, I don’t see how I can possibly do that, since there doesn’t seem to be a company available to me that does compensate their sales people fairly. But I’m not entirely okay with simply ignoring the situation. No, I’m not responsible for that company’s crappy compensation package. But I can’t help feeling that as long as we all acquiesce to the daily rip-offs of big businesses, they are not going to go away. And this doesn’t even address the havoc their policies can wreak on ME as a small business owner.

Sometimes I wish I could just keep my head down and NOT think about the more global nature of the things I do every day, or even about how the way I conduct my business affects the other members of the small community of folks that inhabit my immediate world. I wish that I could just worry about getting myself through every day, and let everybody else take care of themselves. Unfortunately, I just don’t work that way. And it’s kind of a pain in the ass...


  1. Oh, I know what you mean here. Your empathy for your sales rep is so touching. I just hope he gets a bonus based on total volume as well as individual sales commissions. That's where working the smaller clients can really get rewarded. After years of people hinting, asking and sometimes outright demanding that I cut my income to get their business, it's nice to hear a sympathetic client's perspective.

  2. What a mess, I am so sorry you have to deal with that. If it isn't one thing, it seems to be another, equally crappy thing.