Monday, August 17, 2015
The Worst mistake I Ever Made Story
The Worst Mistake I Ever Made Story
A true story about doing business with the wrong kinds of people
Written 1/2010 and rewritten 02/12/2016 unedited
Over the years, there have been many business lessons that I have learned, and this story is about one of them, it is one that I learned early on.
Not every business deal is a good one, In order for a business deal to be successful all parties need to be happy and sometimes due to dishonest people, mistakes or stupidity this does not happen, hopefully when those things happen no one is hurt and it becomes a good lesson for the future.
After correcting the mistake, an honest business person will usually say “I’ll never do that again”, I have sure learned my lesson.”
However if any of the people involved in a bad deal are dishonest or just plain stupid, it’s hard to tell who learned the lesson.
In 1965, I was twenty six years old and a junior partner in an automotive parts rebuilding company called A.P.I. which was located in Hialeah Florida.
I had bought into the company in late 1963, and by 1965, I was involved in sales, and calling on our customers all the way from South Miami to the City of Homestead.
My business partner’s son Don covered our customer sales in and around the
Sometimes to make an extra buck, Don and I would buy something together and then share a booth at a flea market to sell it on the weekends. Don’s father, the owner of the company, didn’t mind if we made extra money on the weekends, as long as it didn’t conflict with our normal business duties.
Every Wednesday, I would make a sales trip, calling on all of the auto parts stores and trucking companies doing business with us all along U.S. 1 heading south.
Once I reached Homestead I always stopped in to see a surplus and junk dealer, who had a scrap yard right outside Homestead Air force Base. I stopped to see him for several reasons, one was because he was buying all the scrap out of the Air force base, and sometimes he had parts that I could buy for our company to rebuild. The other reason was that I just loved to look at all the different kinds of junk he would haul off the Air Force base. This fellow had what was called a “Term Contract”, which meant he bid every year to haul off everything the Air Force base was throwing away. He once told me he only paid them 2 cents a pound, and he bid and got the contract every year.
Sometimes he would go on the Homestead base and pick up stuff that he just took straight to the dump, items that were pure trash and there was no money to be made on. But that was unusual because most of the stuff he picked up, he brought to his own scrap yard where a steady stream of people like me came by and bought it from him.
So every week, when I stopped by to see him, he would usually have a small pile of parts waiting for me to buy, and every week we would go through the same ritual, he would always want more money than the stuff was worth, and I would have to dicker with him. I hated dickering with him as I found that he was always a bit difficult to deal with, he seemed to lack common sense.
Now I had been doing this consistently every week for about three years. And by that time you would have thought he would have known the routine, as I was a regular customer. But strangely, every week he would act like it was the first time we ever did business together.
One day I drove into his yard and it was filled with stacks and stacks of boxes of magnetic computer tapes. They were each in a square flat box about two feet in diameter and about one inch thick. I picked up several of the boxes and they were from companies like IBM, or 3M, so I opened up one box and inside was a big aluminum reel, filled with hundreds of feet of magnetic computer tape. It appears that Homestead Air Force Base, had converted their old reel to reel computer tape over to a more modern system of floppy discs. They just erased all the reels of magnetic tapes and threw them in the trash.
The owner of the junk yard saw me looking at them and came over to see me. I asked him what he was going to do with all the computer reels. He said he was getting ready to haul them all to the dump, he told me that by the time you took the reels out of their boxes and then tried to get the magnetic tape off, you, would have wasted more time than the aluminum reel was worth in scrap. He said that he had over 2500 of them.
I told my junk man friend not to be too hasty by throwing the stuff in the dump, I said, let me take a sample and see if I could sell them to someone. In the back of my head I had remembered seeing similar aluminum reels at a surplus dealer’s warehouse in New York City.
When I got home, I dug around and found the company in New York’s old business card and I called them up. They said they were very happy to hear from me, and yes they always bought magnetic tapes on aluminum reels. I think that they were very excited to hear that I had 2500 pieces available and they asked if I could send them a sample, yes I said, I would sent them a sample by express mail, which I did.
About a week later I received a letter from them in the mail with a purchase order in it that they could buy all two thousand five hundred reels @ $1.00 ea. I was so excited that I could hardly talk.
That day, I went to work and told Don, about the deal that I had just made, and if he helped me, we would share in any profit equally, Don was as excited as I was.
That very afternoon, we both drove down to Homestead together to see the junk yard owner, and once we were there, I proudly took out the purchase order and showed it to him. He read that we had an offer of $1.00 each. I said, we could pay him fifty cents each, and my partner Don and I would pay for the packaging and shipping to New York.
After closely studying the letter, the surplus dealer asked me, “How do you know they will pay you?” Well, I said, I had done business with them in the past and I never had a problem with them, they always had appeared to be honest.
O K, he said, “How do you guys want to do it”.
Well, I said, my partner and I need to rent a U haul trailer and bring all the tapes to Miami where we can box them up. Then we need to call a freight company to come and pick them up to ship them to New York. Then he said, “I think you should pay me more”. I explained that the U haul trailer and the packing and the freight to New York, left Don and myself only a very little profit.
What I was really thinking was, here, this bum had gotten the stuff for almost free, and it was going to cost him hundreds of dollars to take it to the dump. But with us he would both get rid of the stuff and make a profit, he finally agreed.
The next day, Don and I rented a U-Haul trailer and we made two trips to the
Homestead yard, and we hand loading all the tapes to ship to Miami. This was horrible work to do for my partner Don as he wasn’t used to such physical labor in the heat.
That weekend we spent all day Saturday and Sunday packaging up the boxes of magnetic tape reels into larger and stronger, used, corrugated cardboard cartons and then we strapped each box with metal banding. It was summer, and it was very hot, but we finally had all the magnetic tapes packed up.
I called a local trucker named Southern Transport, and they said they would haul the whole lot to New York for $300.00, so the next day they came to pick the stuff up, but somehow they had forgotten to send a truck with a lift gate, so we had to load the entire shipment by hand again.
At this point we both agreed that the profit we were earning wasn’t enough to cover the costs and labor we were incurring.
The next day I called the buyers in New York to tell them that the shipment was on its way, and I asked them how long it would take them to pay us the $2500.00.
There was silence on the other end of the phone, finally he said, $2500.00, where did you get that figure from?
From your purchase order, I replied. I have it right here, you offered us $1.00 each. “No we didn’t he said, we offered you 10 cents each”.
I said, it’s impossible for you to offer 10 cents each when the freight to send it to you costs more than 10 cents each.
I looked at the purchase order, and I saw they had written $ .100 ea. I said, you purposely wrote it on your purchase order to look like $1.00 ea. Well that’s your problem the fellow in New York said to me.
I hung up the phone, and when my heart stopped pounding, I immediately called the trucking company, and the dispatcher said, I was in luck, the shipment was only in Atlanta Georgia, and they can turn it around, and return it for a cost of about $100.00. As I had no alternative, I had them return it to us. The next day the truck arrived in Miami and we unloaded it. This time Don rented a much larger and much more expensive U haul truck. And we drove the load of tapes back down to Homestead.
Once we were there, I explained to the junk yard guy what had happened, and I took out the purchase order from New York, and we all looked at it again. He agreed that it looked like they would pay $1.00 ea.
I told him that I was sorry, but Don and I were out the freight to Atlanta, the cost of the U haul trucks, and all the packaging labor. As long as we had all the tapes on the U haul truck, did he want us to take them to the dump for him for free, and we would pay for dumping it.
I told him I felt really bad about the situation and even though Don and I had lost quite a bit of money, I would pay for dumping the stuff in the garbage, which I knew was his intention in the first place.
He said, “No leave it all here, I can dump it after you give me the $1250.00.” you owe me.
Don and I unloaded the U Haul truck by hand again, and I again apologized to the guy, I said, look Don and I already have lost way over $500.00. I’m sorry for what happened, but I don’t intend on losing any more money. Especially as you really didn’t lose anything, let’s all shake hands and remain friends, he didn’t want to, and needless to say I never went to see him again.It was indeed the worst mistake I had ever made back then in 1965, and I am sure I learned something, however, I think I have made some worse ones since.