Unless you've been living in a cave, you know that gas prices are approaching, or even over, $3.00 per gallon. And, naturally, that's causing a lot of discussions on-line, in the mainstream media, and at the local Starbuck's. The conversations seem to fall into three categories.
One is who's to blame. Depending on who you listen to, it's either the democrat's fault or the republican's fault. Or, for the non-partisan, it's the government's fault. Or, it's the fault of the greedy oil companies. Or, blame the people who drive the gas-guzzling SUV's. Or the auto makers. Or global warming. Or the war in the Middle East. I know there are others, but you get my drift.
The second area of controversy is whether gas prices are really at an all-time high or not. At three bucks a gallon, there's no question that buying $5.00 worth of gas is no longer an option. Even filling the gas can for my lawn more costs more than that!
But, if you factor in inflation, are gas prices really that high? According to The Seatle Times, a gallon of gasoline averaged about $3.25 per gallon in 1918 and nearly $3.00 in 1980 when measured in 2005 dollars. As a percent of our total paychecks, we may actually be paying less for fuel than we were 20 years ago.
The third topic of discussion is what are we going to do about it? Of course the politicians are all looking to make points with the voters by suggesting all kinds of remedies. But, nothing is going to make a major difference in the price of a gallon of gas in the short term. Giving me a tax rebate of $100 when I spend that much in a WEEK isn't going to be much help. Temporarily dropping the Federal gas tax isn't going to give us that much relief either. It's taken us a long time to get into this situation and it's going to take a long time to get out.
So, what can you and I do? We have businesses to run and for the most part we deal in realities, not theories. Whatever the root cause of the current situation, we have to live with it. How can we take this lemon and turn it into lemonade?
Have you considered giving away a free gas card with a major purchase? According to USA Today, a lot of businesses are adopting that strategy. For some reason, the value of a tank of gas seems to have more of an effect on consumers than even it's inflated price deserves. A twenty dollar gas card seems to have more of an impact than a twenty dollar bill or a twenty dollar price reduction.
An even better strategy might be to promote items that are associated with staying home. While car dealers and tourism related industries may be facing serious problems right now, there's no reason why retailers of stay-at-home products shouldn't be having record sales.
You don't have to burn gasoline to sew, or to take care of your home or business. Sewing machines, vacuum cleaners, fans, commercial cleaning, none of these things are travel-related. Offer them something to make staying put more enjoyable, more convenient, more pleasant and you'll help your customers save fuel. Throw in a free tank of gas with a suitable purchase and you've got a winning promotion.
Small business is the backbone of the American economy. One reason is because independent retailers are flexible. We have to take action to survive. Every economic situation contains opportunities for those who are willing to look for them. May, 2006 is no exception.
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