emv@math.lsa.umich.edu (Edward Vielmetti) (12/02/89)
In article <1989Dec1.232137.11584@ddsw1.MCS.COM> karl@ddsw1.MCS.COM (Karl Denninger) writes:
One of the things that REALLY pisses off a dealer is when the local college
sells 3,000 machines BELOW THE DEALER'S COST to students -- and the dealer
gets stuck supporting those units. Some of those, inevitably, find their
way into the grey market and outside of the university.
The result of this? Ask the dealers in Ann Arbor, MI. More than a couple
have gone out of business in the last couple of years due to the U of M's
"Truckload sales". Happens every year.
This is not good folks. Remember, this isn't like signing a dealer on
-- the universities are literally opening up the backs of Semi
Trailers and selling the machines off the loading docks! Support and
service? That's for the local dealers to provide (free, of course,
since the system does come with a warranty!)
This topic has been thoroughly hashed out at Michigan in a local
conference, with participation by both U people and some dealers.
Here's some summary of stuff here. Remember, we're not selling NeXT
machines by the truckload (ha! we're barely selling any at all!) --
these systems are Macs, Zeniths, and IBMs.
When you purchase $6.3 million and sell it in a weekend you hope to
get a pretty reasonable volume discount. Probably a better volume
discount than a typical dealer order. You should also expect some
nice treatment from the vendor and some extra work on their part.
I seriously doubt whether the dealers in this town could push that
much gear in a weekend without some help from the University (let's be
real folks, not a chance). The Engineering School gets similar
purchasing power by doing outrageous things like buying 760MB SCSI
drives by the gross.
You've got to remember in a competetive market there are companies
that make it and companies that lose. I would expect a few computer
dealers to go belly up every year in this town, and a few others to
take their place. The U doesn't sell every imaginable computer
peripheral, piece of software, cable, modem, floppy disk etc etc.
Here's the income statement from Computer Kickoff '88. Note the
$81,000 figure as "dealer payments" -- several dealers that
participate in this $6.7 million dollar sale get compensated for their
effort to the tune of about 1% of net sales, or about 20% of gross
income.
& RESPOND, FORGET, OR PASS:
157
Nov30/89 18:55
902:157) Tom Diroff:
computer kickoff 88 income statement
net sales (less sales tax) 6765602.35
less cost of goods sold 6364997.59
gross income 400604.76
operating expenses
dealer sto payments 81000.00
crc support fees 50000.00
itd salary & fringe benefits 50000.00
hardware 13851.98
food&beverage 6837.58
advertising 4842.16
space rental & renovation 1946.40
security 1446.25
supplies, carts 1284.57
itsc setup fees 1250.00
total itd operating exp 212458.94
p&cs order processing 43298.50
stores event planning 16500.00
stores material handling 16110.00
stores material reconciliation 5000.00
stores after sale pickup 2350.00
stores system support 5584.00
stores order processing 2811.50
incremental event labor 2671.00
Mac technics fees 2500.00
printing 19158.89
postage 5327.28
coliseum rental 9875.86
coliseum renovation 1138.19
euipment rental 2096.89
dsc chrges 1925.94
supplies 1923.00
- - - - -
Nov30/89 18:55
902:158) Tom Diroff:
trash removal 1240.00
high low rental 997.50
phone service 843.47
insurance 700.00
space rental 135.00
total stores 98889.36
total operating expenses 354646.80
net gain 45957.96
- - - - -
Nov30/89 22:57
902:159) Charlie Clark: Thanks for entering this Tom. Do you think that this
shows that the U does make full cost recovery on this sale, or doesn't (ie
are there more than 46k of unrecovered costs to be found?)