How do you calculate your sales expenses? Do you have examples of that, any type of formula? I actually, again, three separate categories, and then honestly one has two, we'll call them sub categories. It's basically on the sewing machines. The margin is going to be much higher than on the vacuums. You have what I'll call, I don't like the word premium because this really isn't a premium price point, but you basically, the way it's going to break down margin-wise is, you have the units that we're selling for more than 300 and less than 300. At less than 300, it's really by and large, once you factor in shipping costs, which obviously you have to, you're dealing with margins that are higher than big boxes but not substantially. The third category is the bags belts, all that. We have been increasing our prices at about the cost of tuition, about twice that of inflation, over the past say 10 years or so, because we were just simply too cheap. We're still probably below what a lot of boutique shops would sell for a specialized product, but in a sense, our products are not specialize, they're very commoditized. It's just that we aggregate them in a way that is specialized to the one-stop-shop. Having said all that, a big percentage of our sales and it's a very fast growing percentage, is the repairs, and that's, in terms of gross, it's been growing for probably the past five, maybe not quite five years, at a huge rate, but there the labor costs are a cost of sales. But honestly, since it's just the two of us that are working in the store, we're going to be here whether we're doing something or not. The salary, I look at as a fixed expense. How long it takes to do a particular repair? I look at competence, and sometimes you hit a run where you get very complicated repairs and a lot of them, then you can go a long time of just simply routine stuff. The cost of parts on the repairs that we do is very low. On the sewing machines it's negligible. It's all time which is highly variable from machine to machine, repair to repair. Your repairing the same gear on the same model of Singer Sewing Machine, when literally it could take more than twice as long, because the machines are 50-60 years old, and one comes apart much easier than the other. Some machines are still working the way that they are supposed to, some aren't. On the vacuums, there is because of Chinese manufacturing is sometimes intriguing, and you have pieces of plastic from Malaysia that are made to snap together. They're not really made to snap apart. So again, same manufacturer, different models, or it might take you five minutes to get this one freaking plastic thing separated from this other freaking plastic thing, but on the very next machine that is the same model, it might come off in 15 seconds. So, on that, those are the three retail areas plus the repair, and on the vacuum and of the retailer is again two different margins at above 300 and the below 300. On the above 300, I will say that in terms of points we are making not a whole lot more than half of what we were back in '93, '94, '95. Back then, this was a very, very high margin industry. The Internet and the American consumer have changed the industry, and so the pricing structure is not nearly as strong as it used to be. On the, well under $300 machines, like if you're talking $189 and less, the machines have really been commoditized to the point where again, you're selling machines that there's no way that you could keep the doors open, if those were dealing machines that you were selling. When we opened up in '93, there was a machine that we were selling for $129 that the big boxes had, but for $129, we were selling for same thing that it was totally different. We were making a very large margin at $129. Now, what we sell for $129 is costing us with shipping, at least 40 percent more, and I would say that that translates any thing in the sub 300 for sure and maybe even a little higher than that. The sales expense program should be designed as aid to the sales employee in their sales effort, and provide enough budget to help employees develop customer relationships. How do you as a sales manager and owner address this in your business and keep customers coming back? We really don't except that both of us have, honestly, God-like powers of discretion, and we won't second-guess the other's decision. Well, maybe we do, but we don't tell each other if we do. If it's a customer that has purchased several units from us, or there are some customer that just come in on a very frequent basis. If they happen to need a chord replaced on a unit, it might not cost them anything, it might cost them half as much as what it would another customer. When they buy a fourth vacuum, there's the line that I use as, and I say, as a loyal brand X customer, we value your business, and I say it in a theatrical way even though it's 100 percent true, and they can send a mole down here the next day or the next hour and that mole will be told a different price than the price I'm giving them. I just want to convey to them that, "Yeah, you're not paying what everyone else is going to pay for the same service or the same product that everyone else is getting." That's how we handle it. Neither one of us, I think, go out of control on that, and there's always special circumstances where one of us might have a relationship with that person, or it's a cousin, or I used to play ball with this person, whatever. Once [inaudible] break and that's what happens. Honestly, we probably should use it maybe more aggressively than what we do, but it's kind of scattershot and it's rare enough that bottom line I don't take it impacts is very much. Well, I know it doesn't impact us very much. It is something in a way I mean, because they're not just customers, we do have relationships, just banter, and I'm not sure how much of that we actually have to do. We probably could do half as much and just pocket the money, but A, I'm not sure that that's the case because it might negatively affect our retention rate, and B, I feel good about making them feel good that they are special. I do perceive it as a win-win, even though we're making a few dollars less.
