Photo Credit: JoePhoto

Tablets are the popular thing right now. Apple sells the iPad at a $499.00 starting point and Amazon is selling the Kindle Fire at a $199.00 starting point.

I read this nice article this week that points out the difference in business practices between Apple and Amazon.

According to the article:

Apple focuses on profitability for its hardware products with content providing a supporting role at much smaller margins, while Amazon is willing to sell hardware essentially at cost in order to support profitability in its massive shopping and content offerings.

There is a lesson to be learned in the battle between Amazon and Apple. While Amazon is apparently caving to the pressure to treat the Kindle products like a loss leader to grow customer base, Apple continues the time honored practice of making a reasonable profit on their hardware. Value is added by a community that creates extremely cost effective add-on’s.

Small business owners would be wise to follow Apple’s example and not Amazon’s.

Free and break even do not scale in the world of business. Amazon will probably get by with this because of their customer base, but as small business owners we cannot get caught in the tap of following Amazon’s example. All we will do is create downward momentum for our companies. As we drop our prices in an attempt to be more competitive (or carve out our own niche) we will only devalue our products and services, and our perceived value will go with it.

Amazon will suffer greatly if their customers purchase Kindle products but only use it for free content. With Apple’s approach they stay profitable regardless of the the way customers use the iPad.

Let’s keep the profitability of our businesses in our own hands, not the hands of our customers.

Photo Credit: kpcauchi

He stormed in the front door of the shop. After a quick glance around the room he barked loudly at the lady behind the counter.

“Hey, do you unlock cell phones here?”

“Yes we do.”

He left the building, and headed down the row of shops. About five minutes later he walked back in.

“How much do you charge?”

She spun around right where she is standing and walked into the back room. After returning she had his answer.

“It is fifteen dollars.”

Again he left the store and went back down a few doors. Five minutes later he bounced back in the door.

“I do not have much, can you help me out here?”

A voice emerged from the back room.

“Tell him we can do it for ten!”

“We can do it for ten.”

“Alright, thanks.”

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Photo Credit: The Barefoot Executive

There are 2 banks where I live. One of the banks I used for my business. They don’t come across as all that particularly friendly. It’s not so much the staff, really. They are just part of a very large group of banks in Kansas City and it just feels like this branch has had the life sucked out of them by corporate mandates. They can’t seem to make a decision without first consulting the manual. They do have all the amenities you would expect from a bank. That’s why I used them for my business.

The other bank is quite different. It has been in Oak Grove for over 100 years. My wife and I have had some kind of account there since we were both kids. They know us by name, ask about our parents and for the most part getting anything done inside the building is a complete joy.

We have two accounts currently. One for or normal banking and one for our emergency fund. Last week when I got my bank statements a flyer for getting a loan at the bank dropped out of the envelope. This is normal, right? I mean, that’s why this bank is there. They want their customers to have more than a checking account. They want us to walk in the front door to borrow money. The only reason they let us even have a checking account is in the hopes that we will come in the front door to borrow money. A checking account, for 95% of the account holders is nothing but a loss leader. Banks don’t make money on deposits into checking accounts. Most people keep such a low balance that there isn’t much they can do with the cash.

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1. Stand around with your mouth wide open

Photo Credit: Tamboko

This one confuses me. Can’t you tell if you leave your mouth open? Mine gets kind of dry and I just feel dumb doing it. Still, I see it all the time on job sites. Please, put a piece of gum in there if you need to. Anything is better than waiting for a bug to land on your tongue.

2. Wear pants so loose that I can see your international date line.

Photo Credit: My wife's camera and an Olive Garden!

This one is confusing too. This is a hint that maybe you’ve had some kind of injury that keeps you from sensing temperature or something. Here’s a hint. If you have to pull up your pants every time you stand up….you are probably showing the dark side of the moon without knowing it.
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Photo Credit: The Silver Brick

I run into this debate quite a bit. Whether or not you should get a newer truck or an older one.

Older truck argument:
Pro: It doesn’t matter what you drive as long as you do good work.
Con:  Customers will think you’re not successful and don’t have the talent to do their work with a high level of quality.

Newer truck argument:
Pro: Customers will be able to see that I’m successful and do good work.
Con: Customers will think you are overpriced and won’t want to use you.

I think both of these arguments have misplaced focus.

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