Hidden costs

Posted by Mitchell Gooze on August 24, 2011

0 comments | 753 reads

When I was leaving the Ontario, CA airport the other day after watching the Southwest Airlines credit card people at work (as discussed in an earlier blog post), I decided I needed an ice cream. (People who know me realize this is a regular condition of mine.) There are few shops to buy ice cream in the Southwest terminal (just one actually), so I stopped in and picked up a Drumstick from the freezer.

When I approached the cashier she said, “Ice cream is expensive.” I said, “That’s ok.” She then rang it up at $5.00. Well, that is expensive for a Drumstick … anywhere. I paid for it, and then asked her if she got a lot of sticker shock from buyers, and if that was why she warned me in advance. She said, “Yes.”

I then asked why it was so expensive, since their candy was very reasonably priced. She told me it cost a lot of money to bring food products into the airport, especially frozen food products. They had a small freezer so they did not stock a lot of ice cream, and the truck had to be stopped and searched on arrival at the airport. The actual ice cream was searched at least once more in addition. These costs added up given the small amount of ice cream involved, making the transportation costs significant as a total cost of the product.

One more (albeit minor in the scheme of things) annoyance and cost of the terrorists.

What hidden costs are you having to pass on to your customers … and can you find a way to cut them?

Republished with author's permission from original post by Mitchell Gooze.

Mitchell Gooze

Mitchell Goozé is the president and founder of Customer Manufacturing Group. His broad scope of business experience ranges from operations management in established firms, to start-up and turn-around situations and mergers. A seasoned general manager, he has headed divisions of large corporations and been CEO of independent firms, always focusing the company strategy on the most important person in business . . . the customer.

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