Author Topic: Micro Economic Zones...  (Read 1996 times)

Offline TimSuggs

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Micro Economic Zones...
« on: December 22, 2008, 08:45:40 PM »
And for Number 300...

Micro Economic Zones…

Most of us live, work and play within a 50 mile radius of “home sweet home”, wherever that is.  We also consume from within that same 50 mile radius.  Food, gas, clothing, all come from within that little 50 mile circle.  I first became aware of “Economic Zones” when I was working as a salesman for what was at the time the largest home remodeling contractor in the USA, American Remodeling, which was the nationwide authorized contractor for Sears Home Improvements.  I sold Vinyl Siding.  We had two offices in Alabama, one in Birmingham and a tiny office in Mobile.  So it wasn't uncommon for us to head into the office for our morning sales meeting and then get a sales lead that was all the way at the bottom of the state that was set for 3 hours from then.  I burned up a lot of highway back then.  It was always hard to find “good” salesmen, so we would often be pulled to other offices if we were willing to go.  I enjoyed the change of scenery and would always take them up on the offer to work out of our Memphis Office anytime I could.  Loved Memphis! 

As a salesman, it’s hard to find a good sales manager, one who really understands the in’s and out’s of “the sale”.  The Sales Manager for the Memphis Office was a “master” of the sale and I learned many valuable sales principals from him.  And every salesman has his/her own technique.  Mine was quite simple and insidious.  Honesty.  I knew more about my competitors products than I did about my own, and I knew EVERYTHING about my product!  All you had to do was slip up and say a simple but “key” word about the “other guy’s” product, and I had you, cold.  You might refer to “Ultimate” vinyl siding, or “Bonded Laminate” vinyl siding, or “Solid Core” vinyl siding, and I knew right then and there who I was up against for this sale.    No, I didn’t bad mouth the other products, I went to my car and got his product for you, showed you the differences and why ours was superior and then I let you bad mouth his product and tell of the lies you had been told.  Simple honesty.  I told you it was insidious.

Here in Birmingham, AL. a “square” (100 square feet) of our “Premium” Lifetime Guaranteed Vinyl Siding was $495.00 a square, but when I worked out of the Memphis office, the same product was $795.00 a square there.  And I wandered over into MS and AR a lot from the Memphis office, and each of those states had their own prices for the same product as well.  I asked why the difference in price and was simply told Memphis was in a different “economic zone” than Birmingham.  And it didn’t take me long to figure out it didn’t just apply to vinyl siding either.  Gas was more, cigarettes were more, food was more, EVERYTHING cost more in Memphis.  But then Memphis had more:  Country/Western Stars, tourists, motels, tourist attractions, people, gas stations grocery stores, and on and on.  So there was a lot more “disposable income” floating around Memphis than in Birmingham and according to the laws of supply and demand, the demand was greater, and so was the price for anything.

My oldest son has 5 acres in the next county from mine, and he’s recently been plagued with non-stop vehicular issues resulting in me putting on the Road Rescue Ranger” hat and making many a trip to “supplement” his vehicular activities, such as going to work, etc.  I used to be the type of person that never asked “how much” when it came to something I needed.  Gas?  I just pulled in, swiped my card and filled up, usually didn’t even get a receipt because it really didn’t matter.  And that was pretty much the norm for anything I purchased.  Well, with the economic downturn, consumables price upturn, gas at $4.00+ a gallon (although I never actually paid more than $3.99.9) and milk at $5.00+, well…  I have started watching prices, a lot.  And I’ve actually gotten pretty good at pinching a penny.  It makes no difference how much money you got, it only goes so far.  And with one son just graduating college and our daughter about half way through, well, the “Suggs Family Slush Fund” is getting a little thin in places.

My recent “Road Rescue Ranger” activities have opened my eyes to what I’ll call a “Micro Economic Zone”.  In taking my son to and from work, I’m traversing about 4 counties.  Well outside of my own 50 mile radius “Economic Zone”.  This morning (5:am yawn…) instead of filling up at my local BP, I waited until I was near his house and filled up at the BP there.  The difference?  $1.89 a gallon a block from my house, $1.51 a gallon a block from his house.  .38 cents a gallon difference, and my fill up was 30 gallons, so I saved $11.40 that is still in my pocket.  He usually has me stop off on the way home in the evening at his local supermarket.  The 4 pack of 9 Lives cat food I buy a block from my house is $2.79, at his local foodmart, it was $1.49.  That’s $1.30 PER pack I could save if I buy it there (yes, I got 10 packs and kept $13.00 in my pocket).  My cigarettes were about $1.00 a pack cheaper there too.  And let me point out these were all the same, identical items I buy here, BP gas, 9Lives cat food, Vantage Ultra Lights, AND from the SAME stores I shop here in town (BP and Foodworld).  The only difference is, that’s right, location.  And I call that a “Micro Economic Zone” boys and girls.

Now I can look up the numbers and figures and work it up into nice little charts for you if you need me to, but let me just sum it up by saying where I live and usually shop, has over 1 Million people in The Greater Birmingham Metropolitan Area as the “demand” component of the demand/supply equation and where my son lives and shops has around 20,000 people.  Simple math.

So…  It really wouldn’t pay me to make a trip up to his neck of the woods every time I needed to pick up another 4 pack of 9 Lives Tender Morsels for our 2 pack of furballs.  But, with a little planning, forethought, thinking…  I could combine our normal,  somewhat regular trips to his place AND stock up on the items that we normally need/buy and save a ton-o-money in the process.  Now might be a good time for YOU to take a little trip outside of your 50 mile comfort zone and see what goodies you might find!

Tim.