A Real FAFO Moment

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I don't wish anyone bad luck or hard times, but when it is at my expense I do not give two hoots. Business is business whether it is family or someone else as there is so much riding on the line. I had been saying this all along that everyone needs to pay their way and we cannot carry people no matter who they are. Costs can be hidden within a business and when you physically break them down only then is the truth revealed.

Two weeks ago we had a family member who had been using our services at a family discounted rate step over the line and we forced their hand. We knew roughly how much the service we were providing was costing and they threw this in our face by being ungrateful. Once we broke it all down it became clear we were being taken advantage of and the family members clearly needed a reality check. Why must we always have the short end of the stick and I would like to be able to pay the staff and family more if we had more. These free costs are eating into the profits as they are significant enough to make others aware.

The good part is their ego got in their way and threatened to pull their stock which we have been warehousing and delivering for the last 3 years free of charge. We gratefully accepted their threat and they have now left the building saving us a complete fortune. All we asked was for them to pay a small percentage because fair is fair. We estimated just on their delivery side and warehousing costs they were liable for R40K ($2.5K) monthly. They disagreed with that number and we have since heard this weekend they did not fully understand the costs. In reality they did not understand their business fully and we made it profitable through our generosity and we will not take them back even if they paid all the costs.

What I found quite staggering is they had been selling online for the last 3 years and argued that this particular company collects the item when it has been sold and there are no collection/delivery fees. They presumed this as we were being billed and not them as this came off our main account. Selling via a platform has it's other costs besides the listing and selling fees.

For a business that was paying nothing they now are paying for a 500 square meter warehouse at R30K per month. The one staff member who was working 80% of the time on their account being R25K and the delivery fees which they did not think were real being an estimated R30K monthly. Imagine owning a business for 3 years and not knowing there was a delivery fee? What a great business if you have no expenses and now have to find R85K ($5K) just to break even.

I know their monthly sales and this business is done and is not a viable concern once you add all the costs together versus the profits from their sales. This will be obvious within the next month and they are either oblivious to this or are already sweating.

This person was handed this business and is about to lose the business through having things too easy and not understanding all the processes. You do sometimes wonder with these types of people who somehow always seem to have money for holidays and the good times with everyone else left wondering with the question of how? I do not follow social media, but my son mentioned they are always away on holiday every other month. I guess the real world has finally caught up with them as their free ride has come to an end and we would say they are not cooked.

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