From bruce@ashbysolutions.com Wed Aug 25 09:35:32 2010
Subject:Re: Epoch

Hi Scott,

>> It's hard to explain just
>> how badly some customers treat demos and loaners.
>>
> Of course there would have to be restocking fees if a unit did not come back in the condition it went out. People expect this when they buy from Sweetwater or anyone else, too. You can even use digital photos to document the conditions in and out. Beat-up units can be sold more cheaply to bargain hunters, and the company won't take a hit on them because they will have collected the restocking fees.
>

We're talking about two different things here. You're describing a
brand new piece of gear that I, as the customer, decided I don't want,
and decided to return. In that case, of course I'm expected to try to
return the gear in good shape.

I'm talking about a demo that has already been returned at least once or
twice. At that point, it probably has some nicks and dents, so it's
purchase desirability is down. Think: rental car. I guarantee that
potential customers will treat that loaner with far less TLC. After
all, a) it's already got scratches; and b) it's 'obviously' not for
purchase. Places like BJ's and Costco deal with this all the time.
They drop the price by 30-40% of floor models to compensate, or they
write it off. I'm not sure if that works well on a niche product like a
clone keyboard.

Another classic problem for rental companies: How does one define "the
same condition as when it left"? The first time is easy, but from time
#2 on, not so simple. Do we charge for missing manuals? Dented packing
foam? All I'm saying is, it gets messy in a hurry.

>> Handling the logistics of returns can turn into a full-time job.
>>
> Okay, checking out a returned unit might take a half hour. Let's pay someone $50 an hour, and figure there's a $25 cost to check out a returned unit and make sure it's prep'd to go back out. Build that cost into the pricing structure to make sure it's covered for those times that someone does not keep the demo.
>
Yes, but I wonder if the realities of this situation will get in the
way. If I have say, 25-30 of these coming back every week, paying
someone $25 each to test them makes sense. But what if it's only 2-3
per week? That's not enough to live on, so no one is going to sign up
to do that as a full-time job. But we still need a quality inspection
done; and promptly, when they come back. Otherwise, we need more demo
units to keep the queue flowing. It's not impossible to solve, but
tough-but-sporadic needs are a classic reason why business plans fail.

Regards,

-BW

Bruce Wahler
Ashby Solutions.com^(TM)
bruce@ashbysolutions.com
http://music.ashbysolutions.com
877.55.ASHBY (877.552.7429)

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