I understand the fat margins of the old days are gone, but how do I know I am setting high-enough prices?
When it comes to hard-to-find items, you can pretty much keep raising your prices until consumers stop buying them, in line with the law of supply and demand. But for the bread-and-butter items that keep most ECPs in business, such an approach overlooks the fact that time is your enemy — which is why the expression is turn and earn, in that order. The real money comes from moving goods, not slapping fat margins on them. That’s why when a certain line takes off, your thoughts should be focused on how to make it move even faster — with advertising, special events, maybe even small price inducements. This is especially so if it’s a product that’s easily available down the road. There IS a caveat: You must understand what the item really cost you: Analyze your true inventory costs (fixed costs, labor, tax, your own salary, etc.). If it’s simply not possible to make the profit you need to support a healthy business, move away from that particular item, line or category.
Last year we were having a terrific holiday season until a snowstorm hit on Dec. 21. We lost our last three days, and our season was a major disappointment. How do we prevent that from happening again this year?
If your customers can’t get to you, you need to go where they are. In the weeks ahead of Black Friday, make sure you have a selection of “Top 10 Holiday Gift Ideas” in a separate gallery on your website (cover all the main targets: The Wife, Weekend Sportsman, Teen Son or Daughter … as well as important price points). Back this up with a telemarketing plan. Arthur Klein, a marketing consultant at the Match Marketing Group, suggests this “snow day game plan”:
- Create a phone script for your sales associates that goes something like this:
- “As a service to our favorite customers we have created a ‘Storm Customer Service Department’ to help people deal with the conditions today. We are contacting you to recommend that you NOT come out today and to recommend a few gift ideas. (Offer to email photos of the gift suggestions.)
- Inform the prospect that all the items will be gift wrapped and ready for you to pick up as soon as the weather clears. Their credit card will not be charged until pickup.
- Have a sales contest to reward the top selling optician with either a cash reward or a restaurant gift certificate.
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