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February 01, 2017

Never Pay Retail

I’m usually a bargain guy and almost always try to negotiate a better price on any big ticket item that I purchase. However, we have a philosophy at MIDFLORIDA that it’s better to pay a premium for a good corner than to get a bargain price on a poor site.

Several years ago we heard that a new Walmart was being built on Highway 92 in Auburndale. This was big news for Auburndale, which sometimes has an identity crisis being sandwiched between the much larger cities of Lakeland and Winter Haven. I contacted Walmart and discovered that they would be selling several outparcels, and had assigned an estimated value on each parcel. However, the parcels would be sold through a closed, written bid system.

In other words, you would identify the site you wanted and place a written bid prior to the auction deadline. Well, this created quite a bit of discussion among staff regarding which site we wanted and how much we should bid. We agreed that we wanted to be on the corner of Highway 92 and Berkley. But now the question was how much to bid!

We decided that we really wanted this site, and I proposed that we bid the full asking price. We were going that direction when Dennis Pershing, our CLO, suggested that we bid 10 percent over the asking price. We had never paid retail before, let alone a premium, so he got a lot of push back. But after much deliberation, we agreed that he was right. We really wanted the site, the asking price was reasonable, and the only way to ensure winning the site was to pay a premium.

However, we now had to convince the board. Luckily, we had two board members from Auburndale who we knew really wanted this branch. But, over the years, the other board members had heartily joked about Auburndale’s lack of amenities and some felt that our north Winter Haven branch was adequate to also serve Auburndale.

Fortunately, the board agreed that the site was a premium location, and that it deserved a premium price. Since building the office, that site has become one of our busiest branches. That corner is now a major hub for retail development along Highway 92. Every board meeting, our Auburndale board member makes a point of reminding his colleagues of how smart they were to place a branch in Auburndale.

“Every Branch Has a Story” is a blog series by Kevin Jones, President/CEO of MIDFLORIDA and an employee of the credit union since 1992. The blogs chronicle the history of the MIDFLORIDA branches, and discusses how each came into existence.