Thursday, August 28, 1997

Begin your journey to independence

By PAUL TULENKO / Scripps Howard News Service

There are only four classifications of jobs: You either think it up (designing), make it (manufacturing), distribute it (distributing) or service it (any of the servicing tasks).

That's it. Everything fits into one of these categories.

I don't care what they tell you in school; all the fancy names they give to the various jobs into which they're trying to slot you can be condensed into one of the four. Try it yourself. Think of a job, then break it down to its elements. You'll quickly discover it fits one of the four classifications listed below.

-- Designing: Overall, designing is probably the poorest paid job of the lot. Those who engage in"thinking" jobs are trying to second-guess American taste, and with America in the state of flux it's in today, that's a scary task. Thinkers engage in all sorts of tactics to justify their thoughts, including focus groups, test panels, trial balloons and the like.

Scientists of all types fall into this group, as do clothing and car designers and curriculum specialists in education. Each is trying to outguess something or someone to come up with a more unified universe, a breakthrough in learning or a new tank-top for Madonna.

If you decide designing is for you, prepare to meet the fickle universe of reality. You may come up with a new hairbrush or face cream, or maybe even a warp drive for exploring the stars; but it's still a lonely, frustrating, poorly paid job.

-- Manufacturing: While designing often is frustrating, manufacturing often is extremely frustrating. Manufacturers take the ideas and designs of designers and reproduce them for consumption. Manufacturers bet their bottom dollar on the hope and dream that they'll build the better mousetrap that will cause buyers to beat a path to their door. It doesn't work that way. If you believe manufacturers make the right thing at the right moment, why do you suppose there are close-outs, discounts, manufacturer's rebates and such?

Manufacturers depend on feedback, and if that feedback is late or wrong, warehouses fill with unwanted merchandise. Manufacturers are highly paid, but can lose as fast as they gain. Even the largest manufacturer is unstable at best.

-- Distribution: If done right, distribution can be extremely profitable. If distributors take on the task of warehousing, it's a risk. The standard distribution channel includes jobbers, wholesalers, distributors, retailers and customers.

Jobbers take a 3- to-5 percent bite from the retail selling price to locate places around the country or world where the manufacturer's products can be warehoused. Most jobbers have telephones glued to their ears and many work out of their homes. Their task is to locate people who will take a chance on stocking large quantities of the products manufacturers produce.

Next in the distribution chain is the regional wholesaler, who locates local area distributors who will stock a few items with the idea of servicing their retail network. Most distributors are large, centrally located warehouse facilities stocking a limited number of products. A distributor who stocks products directly from the factory is taking a lot of risk that the product will sell. Another 10- to-15 percent of the selling price disappears here.

The distributor has one, two or 200 items on hand to meet the anticipated demand for the product. Distributors handle a lot of paper for not much money. They're expected to feed back information on demand for products, back through the wholesaler and jobber to the manufacturer so the speed of the assembly line can be regulated to meet the consumer demand. Another 15- to-25 percent of the product price disappears here.

Retailers eat up another 20- to-35 percent of the product price. Most retailers do not stock goods, but take them on consignment so that if the item doesn't sell, they can return the goods to the distributor. Not all retailers do this, and this is why you have clearance sales to move merchandise no one wanted at the regular price. Retailers have to deal with the public, sales persons and overhead -- lots of overhead.

-- Service: The final type of job is servicing everything sold to you. Service persons must include teachers, attorneys, judges, carpenters, plumbers, taxi drivers, mechanics, physicians, truck drivers and a host of people you never thought of as"service persons." Most service persons make a fair wage, but they're on the abusive end of many conversations and the butt of many a joke. If you opt for this as a career, you must be prepared to take the abuse that goes with it.

There you have it: jobs. For most of them you either have to work 40 hours a week for 40 years, then hope you've saved enough to retire. If you decide to be the boss and own your own business, you work 50 to 70 hours a week for the same privilege. If you decide to buy a franchise from someone, you're not the boss, you just bought a job and the franchiser allows you to work 60 to 90 hours a week for the privilege.

There's got to be a better way! Next column we'll outline one answer.