January 30, 2019

It's Just A Game!

I'm on the phone with a professional, somebody a lot of you know and respect.

He's not happy with my position on discounts and promotions, and he explains why:
  • "The discounts and promotions are irrelevant. All that matters is that there is sufficient markup to allow the discounts and promotions to yield a gross margin of 40%. If the brand delivers a 40% gross margin, the profit and loss statement takes care of itself and everybody is happy. It's just a game!!"
It's just a game!!

Is he right?

Of course he is right.

And that's the problem with a subset of business professionals. You chose an alternate path. You decided that business was a game, and you made that choice years ago, and now you are complaining that business isn't good, and it isn't good in part because you decided that business is just a game". You need to deliver a 40% gross margin and the "game" requires that you deliver a 35% gross margin and the p&l hates that and you think somebody else can fix the problem you created. 

It's just a game, you said so. Now you have to go play the game smarter than everybody else. Are you smart enough to do that? I think you are, and I think you know what you need to do. Go do it.

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