We were buying a pool fence, and like everyone else I checked around the prices. It was clear that the local hardware shop (Abbott Supply) was a little cheaper and closer (less trouble for me) so I dutifully fronted up with the trailer and bought the necessary parts.
Now my wife is one of those people who likes to torture hubby by finding whatever he has just bought cheaper in a junk mail catalogue. Sure enough there was the exact fence at Bunnings Bendigo, 10% cheaper.
Any way I couldn’t help myself so the next time I was out there I took my invoice and compared. This is what I found:
Fence panels: Cheaper
The overall cost was very similar
So what’s going on here? I think it’s this: When I check prices I check the big items, once I get there I just buy what I need without further thought. It would make sense to have a lead item cheaper and pick it up on the back end.
Lessons: for a small business:
Look at the average margin on the whole package, if you must discount then consider up selling items that are higher margin to get the average back.
Dig a little deeper when someone wants you to cut your price.
People seek value, cheapest price is not necessarily the best value.
Make a point of difference– better service, more convenient, delivery, expert knowledge. There is always something.
Many stores offer cheapest price or we will…. Deals. They can’t all have the cheapest price, that tells me most people don’t bother checking.
Business Coach Bendigo and Central Victoria
Ph 0407 335 991