Do you believe in what you’re selling? Do you believe that the hours you put in tracking down merchandise, digging through junk - some of it hazardous to your health, cleaning and/or repairing diamonds in the rough, sitting through hours and hours of auctions, wandering the country side, not to mention tagging the items, hauling them to and from booths, and styling all of it to create attractive displays has value?
It's a Yes or No Question
If the answer is yes, then stop apologizing for your prices. If the answer is no, then get and/or stay out of the business. It’s really that simple.
Now, let’s move on to the various strategies to pricing your merchandise. Think of pricing as being on a linear spectrum where two camps sit on each end: on the right (no political references intended) are those who want top dollar and will sit on merchandise until they get it; and those on the left who prefer to sell lot's of stuff for less profit per item.
On one hand, you can wring out every last penny of profit in an item by pricing it on the high end. On the other, you can price merchandise so cheap that your booth turns over every day. And, of course, there are many points in between those two ends on the spectrum.
Personally, I prefer a booth that turns over rather quickly - but not daily! So, I opt for a pricing strategy that creates a higher volume of sales. For me, a stale booth - one that has the same merchandise every time I visit it, is a business killer.
"Obviously, everyone thinks that stuff is crap," customers think to themselves, "Why should I want it?"
When a booth gets stale, there are two ways to freshen it - with a sale or a complete change-out of merchandise. The sale will cost you more than just the lost profits of that particular sale (I plan to write about the pros and cons of sales in the future). Changing out an entire booth will cost you mountains of time.
Every single one of us succumbs to impulse buys as shoppers - especially when the prices and deals are great. Good deals and lower prices lower the resistance level of your customers, too. And just like you, customers tend to return to booths where they always find the best stuff at great deals.
Too many new dealers just double the price they paid for an item and call it good. That's wrong. What you paid for an item has nothing to do with its value.
That item could very well be worth 100 times what you paid for it. And it could also be worth much less than what you paid for it. I hope the latter doesn’t happen to you too often, but rest assured that it will happen in the vintiques business.
So, get the idea of doubling your price on every item out of your head.
Doubling Your Price
I'm not really sure where this double the price idea comes from. Maybe it comes from wholesalers whose suggested retail prices are double their wholesale prices. Who knows. One thing I do know is that it's bunk - at least in the vintiques business.
I have bought items for a buck or two that I sold for a $100 or more. And I have bought items for $20 that I sold for $30. All dealers will spring (pop as Mike and Frank would say) on the former. Most will turn up their noses at the latter - even if that $10 profit is made in mere seconds. Somehow that ten bucks isn't worth the effort.
Let's do a for-instance
Let's pretend that I'm at an auction. Got my handy-dandy list of items on which I plan to bid and a fabulous yellow-ware bowl comes to floor on which I hadn't planned on bidding. The starting price is a bit high - $25, probably because the owner demanded at least that price. I could probably get $45 bucks for it in my booth. With a 10% buyers premium to the auction house, the mall's 10%, maybe a customer discount of 10%, I'd earn $10 when it's all said and done.
No one bids on the lovely bowl, so I do.
Look. I'm already at the auction buying other stuff. There's no additional time required from me to get the bowl. The bowl is in good condition. A quick dusting and a price tag, it's ready for the booth in mere seconds. In mere seconds, I made ten bucks.
If I can make a quick profit on an item, even if it's a small profit, I'll buy the item. The key word there is QUICK.
Why Doubling Your Price Isn't Doubling Your Profit
Don't think that doubling your price, doubles your money. Buyers premiums at auctions, sales percentages taken by your mall, discounts for customers, the costs of tags, marking pens, cleaning supplies, gas and insurance for your vehicle -- all these things and more are called overhead.
Take your gross sales, subtract the overhead and there's your profit. If all you did was double the prices you paid for merchandise, you have NOT doubled your money.
Again, I say, throw away the idea of doubling price. Look at the actual value of the item to determine its price.
Devise Your Own Pricing Strategy
My strategy may not work for you. You may be in a boutique mall where your fellow dealers have come up with a strategy that everyone in the mall must follow. Your booth may be in an upscale spot where customers are accustomed to, and willing to, pay big bucks. Woohoo! Go for it in that case.
Devise a pricing strategy that is right for your business. Then, make no apologies for your prices!