Timing is everything

People talk about price as if it’s the only thing you negotiate. It’s not, obviously, but pricing can have interesting impacts on your business and the timing of your sales. I was at a family function many years ago when an older Jewish real estate agent, took my hand in his vice like grip, stared into my eyes and said. “You make your profit on the buy, not the sell”.

At first I thought it was simply weird old guy stuff, but the phrase stuck in my head and I realised he was right.

When you at a reasonable price, you don’t have much option but to hold out for the sell price you want to maintain your required margin. But when you buy well, you can alter your timeline, ie. if you need a quick sale, drop the price, if you don’t be relaxed and enjoy super profits.

So the best way to buy well is to buy for free. So how do you buy for free? I can think of a couple of ways:

1. Indent stock: you get paid when I get paid, you’re just using my premise as a warehouse. This is common in retail, and can be applied elsewhere.
2. Buying the right to buy: rights don’t normally get sold outside of equities, but doesn’t mean you can’t. I have seen someone rent a holiday house and pay 12 months in advance for the right to buy that property at a set price.
3. Swapping: you don’t have to pay cash. Consider swapping for something you no longer value.
4. Sharing the yield: an interesting deal is sharing the yield. You obtain the right to sell something, for a pre-agreed share of the profits.

Have I missed anything?

Brendan Lewis is a serial technology entrepreneur having founded: Ideas Lighting, Carradale Media, Edion, Verve IT, The Churchill Club, Flinders Pacific and L2i Technology Advisory. He has set up businesses for others in Romania, Indonesia and Vietnam. Qualified in IT and Accounting, he has also spent time running an Advertising agency and as a Cavalry Officer with the Australian Army Reserve.