Don't complain that you can't make a buck selling, do something about it. Just so we're all on the same track here, let's have a look at what makes up the equation of profit. The cost price less the sell price, right? That's not including other factors, such as your expenses, of course. But we'll say that right now you and your box-mover competitors have about the same expensesIt's obvious that in order to raise your profitability you've got to make either the cost price lower, the sell price higher or both, correct? I can almost hear you saying: "Smart alec, what does he know?" You're probably thinking that your cost is fixed because your supplier is screwing you and you can't raise the sell price because the buyer is so aware of advertised street pricing.
So you already figured this out a long time ago and you're still not making money? It goes without saying that you're not doing anything about it. You're still selling too low or buying too high.
From tomorrow you could be making more money selling almost any line if you follow these simple steps.
Let's assume you're talking computer printers.
Reduce your purchasing of the biggest and hottest selling (yet unprofitable) model, call it One. Reduce the buy number to "just in time" stock levels. You know, the barest minimum you need to achieve a reasonable price on the item. In other words, don't stock up, you mightn't need to.
Talk to the number two and three manufacturers, explain that you are willing to try their brands if they will help with promotional pricing, advertising rebates and so on. Tell them you're going to help them shoot One out of the water.
If they feel you're going to support them in the long term, they should provide you with good competitive knowledge. They should also provide you with the features and benefits of their range and the lowdown about any problems One may have (and even the best manufacturers have some skeletons in the closet). You may already be well aware of some problems, such as lousy warranty terms, service or cost of consumables.
Stock, and make highly visible, the number two and three brands.
Start staff training. Teach them about One's downsides and Two and Three's good points.
Advertise very keen pricing on One but also include Two and Three in the same ads.
To make this plan work you need to advertise regularly. Let's assume you already do. It follows then that if you advertise One with the same pricing, or lower, than your biggest competitor, you'll get punters in though the door.
Now here comes the hard part. From that day on you can no longer go for the easy sale. You must do your absolute best to feed the doubts of your clients by advising them of One's downsides and Two and Three's good points. In order to succeed you must sell Two and Three over One almost every time.
If you have quite a few staff members, you may want to rally their support by offering them a small reward whenever they sell Two and Three over One. The incentive need cost you very little. Try an hour off for each successful cross sale up to the maximum of a day off after eight sales. (Give the day off on a Monday or another slow day.) What's important here is that you're encouraging your staff to become sales people, not box movers.
If all else fails and it seems you're going to lose the sale, give your customers One at your advertised price. Better than your competitor scooping them up, right?
Try this system, it works. Not convinced? Well, this system is widely used every day in the car stereo industry. I'll bet that if you walked into your local store and wanted to buy the advertised special, they would almost always advise you that in their opinion they would personally choose Two and maybe even Three over One. This is all dependent on the store's buy price.
I'm not saying this system will work for every store. It assumes you and your staff are sales people and not just box movers.