Can a Service Be a Commodity

Well Enron dealt with this a little for instance an intangible such as the available bandwidth in fiber optic lines. So what is a commodity in a service business? Well, a commodity could be considered are capacity to wash cars for a mobile car wash business like the company I own, the additionally created capacity coming from increased efficiency in studying production rates. In a service business, increased efficiencies will allow more time to do more work and thus make more profits from additional work.

Our biggest customers sign contracts with us to clean cars, concrete, fleets, etc. by signing the contracts with us in advance, what they are able to do is the guarantee that we will do their job first, no matter how busy we get or no matter how much in demand we are to other potential clients. Service Contracts could in fact be commoditized too you see, just like Enron had decided it could do with excess bandwidth in fiber optic lines or timber futures for new home builders. The excess capacity for washing cars could be the capacity of our units to wash cars in advance directly to the general public after those important pre-scheduled and contracted fleets produce. By using prepaid carwash cards we can sell carwashes in advance to our customers at a predetermined price. We guarantee we will deliver those carwashes even enough the relative price of carwashes go up due to the demand that occurs both from seasonality, changing demographics and that change in more sunnier weather (which makes our phone ring off the hook).

Our customers are able to lock in the price of a carwash, or many carwashes, or a contract for our capacity to wash cars. Like Starbucks we are smart, we are constantly improving our capacity to wash more cars, while we eliminate other market players by bundling services, providing better services, afford better equipment, better marketing dollars or lower prices to the customer who signs up in advance. With these contracts in hand any company can use those against bank loans for influx of capital for expansion, those who sell their products and yes, services too will be able to better judge their future obligations and needs. Those who buy the contracts can also have their costs known and locked in. Those who trade on the float and provide a system for doing this also tend to assist the system by risking their monies on their perceived future possibilities of price fluctuations in that market.

So in fact a service, which becomes a commodity stabilizes prices, promotes efficiency and allows customers to lock in guaranteed deliver and price and that is a good thing, think about it Enron did.

"Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs

---

Suppliers as Your Partners in Cost Reduction

This article is one of the many articles still to... Read More

Negotiating Tactics: Don?t Let ?Good Guy ? Bad Guy? Control the Sales Negotiation

Counter one of the classic negotiating gambits by addressing it... Read More

Embarrassed To Discuss Your Prices? Seven Common Reasons We Cant Talk About Them

Last week, a wonderfully-skilled electrician installed a new light fixture... Read More

Business: Keys To Negotiating Well

Whether it's buying a car, asking for a pay rise,... Read More

Ask for More - You May Get More

If you are involved with sales, how do you feel... Read More

How to Change Somebody?s Mind

Believe me, it's not easy! And sometimes, it doesn't work... Read More

Negotiating: Forcing vs Compromising

Forcing is a hard-nosed approach that makes heavy demands from... Read More

How To Communicate Using Space

What Is Proxemics?The study of the communicative aspects of personal... Read More

A One Stop Financial Solution

Amy Wright, 34, was extatic when her realtor showed her... Read More

Power Pricing - Getting the Right Price for Your Products and Services

There's an old joke about the New York City blackout.... Read More

Negotiating Skills: Ask For More Than You Expect To Get

It creates some negotiating room, and you might just get... Read More

Better Internal Proposals

A colleague of mine has a problem. We belong to... Read More

While Youre Waiting

Not long ago, I made a partnership pitch, on behalf... Read More

Just Ask!

Ask and you shall receive & knock and it shall... Read More

Barter and Its Benefits

What is Barter? Barter involves 2 parties. Each party wants... Read More

Games are a Reflection of Behavior

You are standing on a small stage yelling, "What's the... Read More

Dont Be Afraid Of Silence

In any conversation with two or more people, there is... Read More

Guidelines for Ambassador Appointments

Ambassadors to other countries are a vital part of international... Read More

What Are The Four Types Of Negotiating Outcomes?

Negotiating outcomes are the types of results that can happen... Read More

Making the Deal: Women as Negotiators

Negotiating is no game. It is not for the weak... Read More

Negotiating Technology Contracts

Have you ever tried to negotiate a deal for software,... Read More

Barter: Its Not Just for Doctors Anymore

Time was, in the country, the local "doc" was as... Read More

Cross Cultural Negotiations

Cross cultural negotiation is one of many specialized areas within... Read More

Negotiations: The Art, Science, & Sport of Online Deals

Negotiations can seem as complex as physics, and in fact,... Read More

Negotiate Your Way to a Better Salary

1. Be persuasive: It's hard to force your boss to... Read More

Four Ways To Work Out Business Disputes

Business owners have four options to resolve disputes with partners,... Read More

Resolve Conflict In 6 Easy Steps - The BEDROL Method

The principles of Negotiation can work for you in any... Read More

Determine Your Rate And Negotiate Carefully With Unreasonable Clients

Consultants who offer executive assistant or computer services on a... Read More

Neogtiation: How to be Right Without Making Other People Wrong

What exactly are we trying to accomplish by proving to... Read More

Negotiate Like a P.R.O.

Whether you're negotiating a peace settlement in a war-torn country... Read More

Can a Corporate Executive Really Use The Beautiful Mind; To guide decision making?

I would like to comment on the "A Beautiful Mind"... Read More

So Whats Your Argument?

Arguments aren't always bad things. Sometimes They're used to convince... Read More

How To Deal With A Complainer

How To Deal With A ComplainerA Complainer Is Characterized by:1.... Read More