What a Road-Side Fireworks Retailer Taught Me About Supply, Demand, and Old Inventory – And Why It’s Critical for Painters

July 5th is a terrible time to be selling fireworks, but it is a GREAT time to be buying them!

On my way back to Tennessee from Alabama on Sunday, July 5th, I was on the lookout for small road-side fireworks stands. Kristin spent her 4th of July with family in Knoxville, TN and I had spent the day with my family in Albertville, AL.

However, we were planning on doing our own little family celebration on the 5th of July – at home in the comfort of our backyard in Chattanooga, TN.

For this reason, I was looking to pick up an assortment pack of fireworks to delight and amaze our three-year-old, Sylvia (or as I like to call her Spanky Doodle!) I like shopping on July 5th for fireworks for one simple reason:

Small, Owner-Operators Who Only Open Their Stands for 1.5 Months Out of the Year Will Essentially GIVE Their Un-Sold Inventory Away Because for the Next 12 Months, It Has Little or No Value and Cannot Be Sold!

This is information worth knowing if you enjoy fireworks like I do. It can save you quite a bit.

I’m always the inquisitive sort when it comes to making any purchase. I tend to ask the clerks and owners a lot of questions. You would be surprised how much you can learn doing this – and be amazed at how much owners will TELL you about their businesses.

I asked the owner of the stand how much he made in the weeks leading up to Independence Day and he quickly rattled off his sales numbers. July 4th and July 3rd were his most profitable days.

New Year’s Eve, to my astonishment, pales in comparison to Independence Day in overall sales – representing only 15% of total revenue.

“Why do you essentially give away these fireworks to people who drive a hard bargain like I do on July 5th?” I asked him as he was ringing me up for the all-cash transaction.

“I buy these fireworks wholesale and I have to guess how much people will buy. Some years I over-guess and some years I under-guess. If I don’t sell these fireworks to you at a bargain price, I’ll have to hold on to them for at least twelve months or longer. Plus, I know if you do not buy them from me, you’ll just go down the road and buy them. That’s why I sell them cheap,” He told me bluntly.

Here are a few observations that are CRITICALLY important for owners of painting companies:

• Painting Services Unsold During the Summer Do Not “Wait Around” to be Sold In the Fall – When the market demands painting services, they will not wait around for you to hire the painters necessary to meet demand. They simply buy from your competitors and those profits are forfeited forever. They’ll go “down the road” to buy!

• Your “Inventory” of Painting Services, or Your Employees’ Capacity to Deliver Painting Services, Have the Highest Value In the Summer and the Lowest Value in the Winter – If you want to get top-dollar for your painting services, and if you intend to market to past customers to produce self-generated demand, your services are worth the MOST and your lead-acquisition costs are the LEAST RIGHT NOW! In the fall and winter months, your services are worth the LEAST and lead acquisition costs the MOST!

• Seasonality, and Its Unforgiving Nature, Should Be Embraced and Not “Fought Against”– Many painters eternally wish for steady, even demand for painting services. They have not figured out, as the fireworks retailer has, that you market hard in Summer and ramp up your capacity (HIRING) because consumers are buying NOW – not later.

Since we have little control over market demand, we must then, instead, build our businesses AROUND what the market wants to MAXIMIZE our profitability. So, take this advice ASAP!

1. Ramp Up Recruitment – If you are 6 weeks out on your production schedule, or if you are unable to market to past customers because you are at capacity currently, then you are losing thousands weekly. Ramp up and hire the painters you need TODAY!

2. Market Hard, NOW! – If you want to get the highest ROI for your marketing dollars, spend them when the market demands your painting services MOST – not when you need the money. Now is the time to put your lead generation systems into high gear.

Turn your attention to these efforts now – you’ll get the most for your painting services and your marketing dollar! Now, please excuse me, I think I have a few sparklers left over…

Need help maximizing your profitability during the peak season? Click here for a no obligation assessment of your painting company’s marketing and recruitment systems.