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other thoughts

Me as a businessman

[Today’s run: ran 6 miles yesterday, nothing yet today]

I do not have a good sense for business.  I think that I have a reasonable understanding of things like interest and opportunity cost.  I do less well with ROI-type calculations, maybe because I’m not very experienced with trying to estimate the total cost of some activity and therefore the necessary margin.

The whole idea of margin somewhat escapes me.  If I can get widgets for $5,  why would I mark them up to $10 to sell to someone else?

I’m too much of a consumer.  I figure if the widgets are worth $5 to me, who would pay $10?  Why would a shopper not not call up the $5 source and get their own $5 widgets instead of paying me $10?

Anyway, I think we had good luck with our little adventure in brokering VHF cavity filters.

We traveled to Georgia last year and picked up these big combiner racks.  That was a day of vacation, an overnight motel, food, and gas for a few hundred miles, and the joy of riding in the old truck on two lane roads with the windows down (no AC).

After getting the thing home I advertised some parts on Ebay and brought in a bit from that.  Then we finally have moved all of the cavities as of the end of this week, having spent another overnight in a motel, a few more miles on the road, a vacation day and a day sitting at the hamfest in Jackson.

Some of that effort I chalk up to experience and learning.  This is about the only way I would have to get my hands on some nice VHF filters.  So I learned quite a bit about them.  And I got to meet some interesting people.  And we spent a few hours on the Atlantic shore (which I had never done before).  And we got to drive across Alabama and Georgia (and most of Mississippi).  So there is some “vacation” time in there.

And I most likely would have gone to the Jackson hamfest either way. My back-of-the-envelope calculation has us making a bit of a return once the dust settles.

Retail scares me.  I don’t understand how retail stores figure their markup or how they know what to stock.  I have a bit more understanding for “service” operations, consulting, etc.  Clothing stores: how do they know they can charge $100 for this pair of shoes but not for that other pair of shoes?  Isn’t it obvious that the markup on a materials basis  is outrageous? So what differentiates the $80 shoes from the $100 shoes?

I see that JC Penney is going to try the “always low prices” gag.  I don’t think it will work.  I think the people that shop at JCP are addicted to the “sale” concept.  Going “always low” will put them in conflict with Wal-Mart instead of the department store level they want to inhabit.  But they are retail and I don’t understand retail.