Are You Treating Your Business Like A Garage Sale?

posted 21 Sep 2013, 21:41 by Dean Allan   [ updated 21 Sep 2013, 21:47 ]

We have been holding a garage sale this weekend and a number of the interactions that have taken place have got me thinking about how we business owners price our products and services.

During this garage sale one particular person dropped by to peruse what was on offer and became interested in some fine china plates we have for sale.

I recall the full set costing several hundred dollars, but one of the plates has been broken so what is left is on sale as a "partial set".

You could easily ask $50.00 to $100.00 for these plates, but my wife wants to be rid of them because they have no sentimental value to us and are just taking up space, so she has a $10.00 price tag on them.

Well, this person perusing the plates takes one look at the $10.00 price tag on them then puts on a "song and dance" routine in front of us, claiming that he would be "ripped off" if he paid $10.00 for them and will not pay a cent more than $5.00!! 

My wife looked at me and said "What do you think?".

I looked this person straight in eye, politely explained that the price is $10.00, he is getting a bargain at that price and if he was not happy with this, could he get off our property!!!

He left, still grumbling about the price and the crockery was sold about 10 minutes later - for $10.00!!!!

How many times do we feel obliged to drop the price of our products and services simply to get the sale "over the line"?

If we are properly costing our products and/or services, there shouldn't be a "highest" or "lowest" price - there should simply be THE price!!

I fell for this trap myself many years ago, where I had a heap of bookkeeping clients and I was working ridiculously long hours to service them, but my prices were so low that I could have made more money on unemployment benefits!!! 

So, what did I do? I almost doubled my charging price overnight - sure, I lost "clients", but the income I made from the ones I kept (and new clients I took on after increasing my prices) more than doubled the amount of "take home" pay I made - and I was working half the hours!!!

Your products and/or services have a value - work out what this value is and the next time someone says "is this the best price you can do?" tell them "this is the only price I can do!!" - the clients you get will be worth keeping.