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  #1  
Unread 09-10-2011, 12:32 AM
Uwharrie Uwharrie is offline
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Join Date: Dec 2007
Location: NC
Posts: 52
Default How Much is Enough?

What margins do you feel is right for you?
It should vary by products and individual items. For example, where I live we have a Lowe's store and not a Home Depot. 25 miles north we have both companies (Lowe's & Depot) competing against each other where there the Lowe's store prices there are lower than here in our town. Same Lowe's stores with different Prices. Why?? Because these store's have learned to adapt. Most distributors and manufacturers believe all their customers should listen to them and let them tell us how much our store should sell our products for. Most times they under price and give us lousy margins.
Let's take one brand and look at our local competition and see what we need to be price sensitive on and what not to be price sensitive on. Don't use a straight margin across the board. If you have a product that deserves a full margin and it still gives the customer a great value, then go ahead an make a good margin. Most customers that buy from you are making money and wouldn't consider selling their products or services that make them a living for what the OPE dealers sell for. The OPE industry needs to learn to make money so they will not fail and provide a good living for their families, I have seen lots of dealers come into this business and have an idea that they can beat that other dealer because he is higher on his prices. I disagree for the most part as the only ones that stay in business are ones that maintain a profit.
I go to the barber shop and pay the posted prices plus I tip, the barber comes in my store and wants a discount cause he knows me. I bought tires from a customer that bought a mower from us and paid his price, Wish I'd made him pay regular price for that mower, well my bad. Wanted to buy my Dad a Lazy-Boy for a Christmas, went to local dealer and asked if he would give us a discount since I know him and he said, that's the best we can do so I bought it. He comes into my store and wants a discount on a new mower and I remember his line and tell him that's the best I can do. He leaves and has his son call and he made me an offer on what they would do, I decided to sell. Sounds like I need more training.
More on this later.

Tony
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  #2  
Unread 09-10-2011, 12:37 PM
roym roym is offline
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Join Date: Nov 2007
Location: Surrey, British Clumbia
Posts: 293
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Having worked for commission in a retail outlet, I will not grind when purchasing. If the price is fair and I have the money I buy. When we purchased our truck at a very good price,(they made the initial offer) I asked the sales person if he was comfortable with it. He assured me he was getting paid.
I have walked away from lowballers while I attended to the next customer. I was not being paid to stand there and argue, neither are you.
Don't fret over a lost sale if you are not making a fair margin. If a line cannot be moved at a competitive price then you need to examine why. Are you buying enough to get the best discounts from your supplier? Are you taking advantage of freight terms? Maybe you can find something else that will be a better fit. Remember that the box stores are buying a huge volume factory direct, you cannot possibly match that. Just my 2 cents.
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  #3  
Unread 10-01-2011, 08:35 AM
bob11x bob11x is offline
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Join Date: Oct 2010
Location: upstate NY
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Don't be afraid to stand your ground. If you feel the price is what you need to make a living, then that is it. If your price includes - Setup, fuel, oil, delivery - tell them. I used to always give a break when asked - NO MORE. Most people ask for a discount because they are just asking - explain the costs you have (Freight, setup, etc) and say the product comes assembled, running, and not in a box, and that is the way it is priced.
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  #4  
Unread 10-01-2011, 07:16 PM
retrodog retrodog is offline
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Join Date: Aug 2008
Location: Paris, Texas
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I just wonder what the best way of selling is. Mark up products initially, then say you will sell for this and give a heck of a deal today like car dealers do, or just set it your price and hold it? With badboy its easy for me, this is the price its in the book and the website and all dealers hold it, but with hustler its more complicated. For example, msrp on xone is like 10600, but most dealers are selling 8 to 9000. Do I put 10600 on the tag and say kohler I will blow that out for 7999, or just put 7999 on the tag? Some people want to haggle and some don't, what do you guys do bessides not disclosing price...I think that's bullcrap....
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  #5  
Unread 10-02-2011, 03:25 PM
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tb8100 tb8100 is offline
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Quote:
Originally Posted by retrodog View Post
I just wonder what the best way of selling is. Mark up products initially, then say you will sell for this and give a heck of a deal today like car dealers do, or just set it your price and hold it? With badboy its easy for me, this is the price its in the book and the website and all dealers hold it, but with hustler its more complicated. For example, msrp on xone is like 10600, but most dealers are selling 8 to 9000. Do I put 10600 on the tag and say kohler I will blow that out for 7999, or just put 7999 on the tag? Some people want to haggle and some don't, what do you guys do bessides not disclosing price...I think that's bullcrap....
It all depends on your vision for your store image. Are you a premium store with premium service and price who rarely has sales (think the Apple Store), are you a store with decent prices year-round, but you have a few sales periodically (Best Buy), or are you like a car dealership who has high sticker prices but a different kind of sale for every month, holiday, and occasion depending on where their sales are?

People are trained to haggle- they want to haggle, so I lean toward some sort of combination between the Best Buy strategy and the car dealership. I have a certain margin I want to make, and as long as I average that, I'm happy.

For the most part, you can't change your market and its buying habits. If you want to grow and be successful, you need to study your market and its buying habits and find a way to make them your customers. Apple has done an extrordinary job at being that premium store with a premium price and service, but I think they've especially been successful because they have made their brand and products a source of status symbol.
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  #6  
Unread 10-03-2011, 11:22 AM
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dchd1130 dchd1130 is offline
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Quote:
Originally Posted by tb8100 View Post
For the most part, you can't change your market and its buying habits. If you want to grow and be successful, you need to study your market and its buying habits and find a way to make them your customers.


Spot on Tim. This is something many businesses fight.
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  #7  
Unread 10-03-2011, 07:43 PM
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grouch grouch is offline
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Margins in the OPE business are simply terrible compared to some other types of businesses. Needed a water heater for the house last week, and forgetting that one of my son's wives is the controller for a plumbing distributor, I by one from a plumbing supply. I paid about $365.00 for one she could have gotten me for their cost of $88.00.
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  #8  
Unread 10-03-2011, 11:31 PM
GWB2006 GWB2006 is offline
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Quote:
Originally Posted by grouch View Post
Margins in the OPE business are simply terrible compared to some other types of businesses. Needed a water heater for the house last week, and forgetting that one of my son's wives is the controller for a plumbing distributor, I by one from a plumbing supply. I paid about $365.00 for one she could have gotten me for their cost of $88.00.
Well there you go! Buy water heaters from her and sell them for $200, probably be hard for Home Depot and Lowes to beat that price and give em 10% for too long.
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  #9  
Unread 10-04-2011, 11:23 AM
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grouch grouch is offline
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Now there's an idea.
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  #10  
Unread 10-04-2011, 12:23 PM
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SuperiorPower SuperiorPower is offline
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Something that comes to my mind about the "mark down" is an article I read a few years ago in PET, I think. They said if you mark your products at $100, but then have a sale, or just mark it down, to say, $75, then people will think you knew your product was not worth more than $75 to begin with. I think it also brings to question, is it worth even $75? I don't really have any sales experience but that is what comes to my mind with adding to what I have read in the past about sales.

After all, what is the general consensus about car dealers? They sell their products for WAY too much? Typically, yes. Just a thought.
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