Retailers Forum Magazine - January 2024

FORUM WORKSHOP
Measure your prices against the competitionʼs
– not to match their prices but to find out what
they are really selling at their prices. The competitor
who sells bikes in a box is going to be
the “cheapest.” Let that company have that
market. In small business, a better strategy is to
charge enough to offer quality and service
along with your product. Carry a higher quality
bike, for example, and offer to adjust the brakes
for free for a year.
PRICING PROBLEMS
forumworkshop
Page 64 JANUARY 2024 | RETAILERS FORUM MAGAZINE
Perhaps you are thinking as you read this, if
you can sell a lot of “the cheapest” bikes, you
can make more money and attract more customers.
Let me clarify. What enables one company
to be “the cheapest” is its ability to buy
large quantities of a single product. This presents
two problems for the small business
owner. First, a large quantity requires a large
outlay of capital for a single item. If you are just
starting, you probably should not risk that much
capital on a single product (unless it is your only
product – like the pet
rock). What if it does
not sell? Is your cash
reserve large enough
to sell all those bikes at
cost, or less, and purchase
a new inventory,
which in all likelihood
will cost you more? If
you sell seasonal
items, like womenʼs
clothing, you cannot
afford that kind of
mistake.
continued..
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