Other than politics, religion, money and in-laws, nothing stirs up a conversation quite as much as a simple question: "What should I charge?" Ask eleven people and you will get a dozen answers.
The question is equally important to very new and very experienced retailers, for the same reason. Both groups need to be competitive, but want enough profit to make owning their own business worthwhile.
Since this is a newsletter (we could write a book on the subject), we will only share one very important idea for each group.
If you are new, and ever hope to own a profitable company, you must set it up as a profitable business at the start. Even if it starts in your kitchen (unless you plan on staying there) and even if it takes a while to turn a good profit.
The best pricing guide and method is to scout the best competition in your area. If you are in business, you are competing with someone: always! It makes more sense to us, to compete with the leaders, than the followers. When scouting, figure out what they do that you could do better. Select a few things and learn to do those things well and add to it.
Remember that you will always be competing with someone in your business. Perhaps it is just our competitive spirit, but we would rather compete with the mountain lions over the big game, than the kitty cats over the scraps.
Successful pros usually have a good feel for pricing most of their work, except in one area. Raising prices! With few exceptions, most pros hate (or don't even think about it) raising prices. They are also very good at rationalizing why they don't.
The understandable fear is always the same. "If I raise my prices, I will lose customers."
Perhaps you will. Two other things however, are facts. Every year that you don't raise prices, you are losing money you have earned (you earned it, you just didn't get it) and lost money (like lost time) cannot be recovered.
In your showroom, 80% of your sales will come from one group (different for each company), and 80% of your profits will come from one sub group. For example, plaques may be the group and cherry-finish the sub group.
Focus your attention there. That's the real meat and potatoes sales
If there is a secret of getting customer acceptance to changed prices, it is this: Change the look! Change the showroom location, even just a little. If it's plaques, change out the plates and make every layout new. If you have price stickers in the lower right-hand corner of your plaques, put smaller ones in the lower left-hand corner. Put a much more expensive "knock-out" plaque in the middle of the group.
One dealer, dissatisfied with her trophy profits, followed our "Change The Look" motto and raised her prices 15%, across the board.
She rearranged her entire display (and dusted them), put small price stickers on top of the marble bases (not on the plate) and then sublimated three lines of Comic Sans lettering for every plate on the trophies. Nobody does that! Of course, since they don't, everyone coming into her showroom thought the trophies were so exciting and "different" they told a lot of their friends.
She confided in us that she was tracking at about a $6,000 net profit increase for the year, and was quite happy with her "raise."
Do your changes first-class and your customer will be too busy admiring your "new" and "different" look (which is a justification in their mind) to complain about prices and you will receive the profits you should earn.
We will close the "Toner Times Extra" with a really neat sign we recently read-
"You only have two choices in this world. Follow the path others have made, or forge a new path for others to follow you."
Back Library
Contents