Simple Advertising You people are idiots.

28Jul/08Off

The Price

We all know that we need to have competitive pricing. Manufacturers missed an important change in their own markets a while back–-say, a couple of decades ago. The companies that make things started giving their best prices to their worst customers.

I learned early in my working life that if you want to make money--You just have to be willing to take the money from someone. Who? Your choices are limited to who you exchange money with: customers, suppliers or employees. Really big companies also take from the government sometimes, but us plain folks don’t get that option. The sales prices in small business are not as competitive as they could be because of some outdated thinking in the manufacturing world. Big retail in particular has decided to take the money from their suppliers.

In the business to business world, like between you and your suppliers, the worst customers now get the best price. Long ago, small businesses really were the worst customers because the paperwork made it cost more to sell in small amounts. But with computerization and supply chain management, there’s little cost difference per unit in shipping 10 or 1000 of the same item and almost unlimited locations. The advantage that manufacturers thought they were getting from discount pricing are gone.

Where is the business advantage in granting big discounts for large purchasers if there is no cost difference? In short, there isn't one. No benefit.

Small Business buyers should ask their suppliers why they have to pay a higher price.
Those suppliers are actually undermining their own pricing (and profits) by granting discounts to discounters. And they are almost certainly guaranteeing that their future profits will continue to decline because as the discounters grow, they become more bold in taking the manufacturer’s money.

Flat Pricing for Everyone.