Run8secs
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Registered: Nov 2001
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Posts: 129 |
Re: Saving pennies....to lose DOLLARS!
quote: Originally posted by Spork
"We can save like 3 dollars per vehicle if we take the wheel cladding
off....and no one will notice... and $3.00 X 200,000 sales mean we'll
get $600,000(!!!) more profit!...."
Ford is being penny wise and pound foolish. This accounting savings thing assumes that taking the cladding off will not lose any sales, and I'm sure it will. And unlike multiplying the small savings per truck by the total sales over a year (200,000) to get the $$ savings just think if just 40 people don't buy an Escape because of the styling change that is $880,000.00(!!!!) dollars in lost gross revenue (assuming an average price of $22,000 per XLT Escape-- 40 X $22,000= 880,000). The 880,000.00 is more than the $600,000 and that's just assuming that they only lose 40 sales out of 200,000! Obviously, the profit loss would be less since sales aren't pure profit, but you see the point here... it doesn't take many lost unit sales to wipe out the savings that Ford thinks they might get by shaving off something so inexpensive as the cladding pieces that really have a large effect on the looks of Escapes. 
Somebody is going to figure out a way to sell these cladding pieces in the aftermarket and we will buy them like crazy and that profit will go to the aftermarket manufacturers, not Ford. Really dumb move here Ford.
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