Should not be profit a dirty word in Material Handling

No one benefits when they are discarded profit of the economic equation.
With the economy improving, many people in dealing with the materials industry and expects the good times without having to make changes in how to do business. Unfortunately, this means that the quest for a particular practice that played a major role in the revitalization of the economy in trouble a few years ago.

Witnessed while and "dot-com" was flying high, and the rapid growth with the simple offer incredibly low prices and continued expansion in the markets in which they knew nothing. Operated at a loss for years on the head, promising investors that it would turn around when achieved enough of the market share. Finally, of course, this "lose a little on each transaction, but even in the size of the" business model exploded in his face. Popped balloons, one by one, and the economy followed in the tube.

In the material handling industry and this business model is still very prominent credibility. Also many companies have played the game of mergers, and get themselves involved in the markets because they do not know anything. Also played a lot of people to the numbers game, transfer money from one pocket to another to make themselves look good for the last quarter (and this is called shareholder value management) completely forgetting about long-term planning.

Worst of all, many companies have subscribed very idea of ​​abandoning the pursuit of market share in the benefits with the idea of ​​becoming profitable as soon as it is to eliminate competition. This is called "buying a job", which means trying to allow for-profit or very little. Theoretically, this has two advantages. It allows you to work, which makes your rotation (if this is not your earnings) are impressive. More importantly, for some people, and prevents competition at work.

But see below. Without benefits, you do not have the money to invest in capital expenditures in research and development, and so your growth is everything on paper, and disappear as soon run out of money to buy with jobs.

With small margins, you do not have the money or inclination to reform after the sale. The result is a dissatisfied customer, and it is never good news for the long-term prospects of your business.

Finally, I would say that you have a strategy to weaken the competition works, and your closest competitor went bankrupt. What's going on? Someone buys assets for 25 cents on the dollar and to open a new business. Since the initial investment was too low, can undermine your price. You do not eliminate competition, you have made things worse.

Profit is not a dirty word. No one - especially the customer - after the elimination of the profit benefits of the economic equation. I'm not saying that we should not look for savings that will allow us to keep prices low while maintaining a reasonable profit margin. Of course, the customers benefit from lower prices, but the economy in general and the sector in particular to deal with, and will be healthier if we all agree that want our fair share. If you are satisfied with a 3% profit, and I suggest you buy government bonds. It is safer.