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12-07-2013, 09:58 PM   #151
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QuoteOriginally posted by stevebrot Quote
No. In medical equipment you deal with physicians, administrators, and purchasing agents.
While sitting in a doctor's office last week I got a first look at medical sales. The salesman came in with briefcase and samples and a box of doughnuts. I expected him to ask for the doctor or maybe purchasing agent, but no. He spent the next 20 minutes smoozing the girls at the reception desk. Had a really good line of patter, too. The doughnuts did not hurt either. Managed after about 10 minutes to mention he had a product they might like to look at and he had some samples if they were interested. He still did not ask for the doctor or purchasing agent. He eventually got the receptionist to try his product, some kind of hand cream. He also causally mentioned that he would be glad to bring in lunch for the whole office some time. He left after extracting a promise from one of the receptionists to "see if the doctor would like me to buy lunch for you guys". No mention about any product or any sales pitch, just lunch.

At first I thought he was a complete idiot, but after watching him work I realized I was watching a master at work. He knew he had zero chance of talking to a doctor on a cold call. But if he could convince the receptionist to pitch his free lunch for him he was in. How much profit does there have to be in a product to warranty buying the entire office lunch just on the chance you might get to pitch your product? Not a small office either, 4 doctors plus receptionists, office staff, nurses, assistants and so on.

Next day at a different doctors office, (don't ask) a delivery man shows up with a cart of food. A complete Mexican theme lunch for the whole office courtesy of xyz medical something or other.

When I was in retail you were lucky if the salesmen showed up, much less bought you lunch.......

12-08-2013, 07:25 AM   #152
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QuoteOriginally posted by jatrax Quote
How much profit does there have to be in a product to warrant buying the entire office lunch just on the chance you might get to pitch your product?
Tax writeoff, business expense.
12-08-2013, 08:15 AM   #153
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I honestly don't know. There is a very good camera store near me but they dropped Pentax years ago, I was there earlier this year to get my daughter in law a Canon Rebel 5Ti. I would have gone Pentax with her, but they were only in town for a short stay and I wanted her to be able to handle the camera before I got her one.
12-08-2013, 10:20 AM   #154
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QuoteOriginally posted by THoog Quote
Tax writeoff, business expense.
Which still has to be paid for by profit. Just calling something a tax write-off doesn't make it go away. Advertising, smoozing clients, electric bill, secretary's salary are all legitimate business expenses but they still have to be covered by profit.

12-08-2013, 10:29 AM   #155
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QuoteOriginally posted by jatrax Quote
Which still has to be paid for by profit. Just calling something a tax write-off doesn't make it go away. Advertising, smoozing clients, electric bill, secretary's salary are all legitimate business expenses but they still have to be covered by profit.
You make it sound like "profit" is something other than the money of those who end up paying for the use of the equipment. If they sell medical equipment, and you end up paying to use that equipment, you're going to pay for that lunch, out of your own pocket. It will be built into the cost of what they charge.

Last edited by normhead; 12-08-2013 at 02:10 PM.
12-08-2013, 11:14 AM   #156
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The one camera store in town which carries Pentax DSLRs is not a friendly place. I had my last visit to that store quite a few years ago, when I described a lens I wanted, and the salesperson/owner's daughter said it didn't exist. I was describing the DA 17-70 which had been released 6 months earlier. These folks really put no effort at all into keeping up with the product line.
12-08-2013, 01:38 PM   #157
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QuoteOriginally posted by jatrax Quote
Which still has to be paid for by profit. Just calling something a tax write-off doesn't make it go away. Advertising, smoozing clients, electric bill, secretary's salary are all legitimate business expenses but they still have to be covered by profit.
True, but neither is it eating into profit if it can come out of the tax burden. The real question is "how big does a company / advertising budget need to be for this to be a worthwhile marketing tool?" A few hundred dollars, fairly well targeted, out of, say, millions - I can see the logic.

Oh, and to try to be a little on-topic: so far as I know, four hours' drive to the nearest camera store selling Pentax, in Northern VA. The last time I was there (over a year ago), I knew more about Pentax than everyone else, combined, but it was a holiday weekend.
12-08-2013, 03:24 PM   #158
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QuoteOriginally posted by normhead Quote
You make it sound like "profit" is something other than the money of those who end up paying for the use of the equipment.
Not my intent, you are correct, ultimately the consumer pays. What I meant was that any given product has a particular margin, multiply that by units sold and you get gross margin dollars. What I was trying to say was that the margin on that product has to be huge in order to cover the marketing expense demonstrated by that sales call since I don't think the potential is there for very many units. Not counting salesman's time he ate up $100plus in lunch money so that has to come from the margin generated by units sold. Just guessing but 20 - 30 units per year? Pure speculation of course.

QuoteOriginally posted by THoog Quote
True, but neither is it eating into profit if it can come out of the tax burden.
Doesn't work that way, not in any business I ever owned or managed. Expenses reduce the profit on which you pay taxes, and thus reduce the taxes but only at the expense of profit. If you are running an honest business anyway. I do have an acquaintance who owns their own business and writes off their lunch every day as "marketing". That's not legal unless you can demonstrate that you had lunch with a client and discussed business. The "tax write off" where you spend money and just deduct it from your taxes is almost completely fictional. I won't say there isn't one, but I cannot think of anything that works that way. If your tax rate is 25% and you spend $100 on a lunch for a client, you reduce your profit by $100 and save $25 in taxes.

And just to show that I know what the topic is I stopped in at a camera store on my way back from the doctor. I asked if they carried Pentax, "no only some used stuff" was the reply. "No one carries Pentax new anymore, they've dropped out of the market." This from a camera store with a big lighted Pentax sign in the window............

12-08-2013, 04:29 PM   #159
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Hmm, the expression "creative accounting practices" comes to mind. Someone must think it's worthwhile, or it wouldn't be so common.

I could never figure out who could possibly afford the $200+ per seat, per game, season tickets to our local hockey franchise. Every once in a while, a "friend of a friend" has free tickets, and not in the cheap seats. It usually turns out to be one of the larger companies, who (theoretically) uses them for schmoozing clients.
12-08-2013, 05:00 PM   #160
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QuoteOriginally posted by THoog Quote
Hmm, the expression "creative accounting practices" comes to mind. Someone must think it's worthwhile, or it wouldn't be so common. I could never figure out who could possibly afford the $200+ per seat, per game, season tickets to our local hockey franchise. Every once in a while, a "friend of a friend" has free tickets, and not in the cheap seats. It usually turns out to be one of the larger companies, who (theoretically) uses them for schmoozing clients.
Yeah, I've seen a lot of that as well. Generally I assume the CEO wants tickets to a couple of games so the company pays for season tickets and the sales staff get to use the ones he doesn't want. All my experience is with what I consider "small business", I suppose "big business" may have different rules. I'm just a little sensitive about the "write it off your taxes" thing, after being told for years that since I own my own business I can pay and "just write it off". Doesn't matter where I "write it" to, I still pay out of my pocket.
12-08-2013, 05:11 PM   #161
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QuoteOriginally posted by jatrax Quote
Yeah, I've seen a lot of that as well. Generally I assume the CEO wants tickets to a couple of games so the company pays for season tickets and the sales staff get to use the ones he doesn't want. All my experience is with what I consider "small business", I suppose "big business" may have different rules. I'm just a little sensitive about the "write it off your taxes" thing, after being told for years that since I own my own business I can pay and "just write it off". Doesn't matter where I "write it" to, I still pay out of my pocket.
I hear you. It seems like when the dollar amounts get big enough, "lies, damn lies, and statistics" comes into effect - there's fraud, tax fraud, and "sophisticated accounting tools".
12-08-2013, 05:32 PM   #162
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QuoteOriginally posted by THoog Quote
there's fraud, tax fraud, and "sophisticated accounting tools".
Yup, if I do it it's fraud, if a big company does it then it's "just an accounting maneuver". Oh well, I suspect a lot of that "creative accounting" goes to help out politicians who then vote on the loop holes that allowed them to receive the help in the first place. Hey, that's a circle..... hmmm
12-08-2013, 05:36 PM   #163
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My nearest Pentax store is about a 1/2 mile away. The next closest one is about another 500 yards from there. Then the next one is about 2.5 miles away.
12-15-2013, 08:56 AM   #164
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OK, now here is a Pentax store….. sort of…
Pentax Square, Tokyo
12-15-2013, 09:00 AM   #165
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QuoteOriginally posted by THoog Quote
True, but neither is it eating into profit if it can come out of the tax burden. The real question is "how big does a company / advertising budget need to be for this to be a worthwhile marketing tool?" A few hundred dollars, fairly well targeted, out of, say, millions - I can see the logic.

Oh, and to try to be a little on-topic: so far as I know, four hours' drive to the nearest camera store selling Pentax, in Northern VA. The last time I was there (over a year ago), I knew more about Pentax than everyone else, combined, but it was a holiday weekend.
If the tax is less then 100% then a tax write off still costs money. I would rather pay 35 cents more tax and keep 65 cents for myself than spend a dollar, get 35 cents back on taxes and still be out 65 cents.
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