As some of you know, I've been struggling to find the right balance in pricing my merchandise. To that end, I've been doing a lot of experimenting. I believe that I'm getting there, and sales are up!
One of the best pieces of advice that Andy Birol gave to Karen Klein in this Business Week interview was
"You've got to make sure that your pricing, purchasing, staffing, and servicing decisions are based on real facts and current information—not emotion or old data."
Much to my chagrin, my typical customer just wants a chotchke to put on their wall unit, and could care less about who made it or how long it took to make. If they can buy something at a big-box retailer for $5, why do they want to pay me $10 for an item that they perceive has the same value?
And it's all about the customer's perception, right? Perception is reality.
I can certainly buy the same type of items that I am now selling, at lesser quality, for a lower price, and sell them for less. The majority of my customers will be just as happy, blissfully unaware that there is even a difference. The niche customer who does know and care what they are buying can still be served, but as a start-up, that niche is not going to pay my bills.
And, let's face it, I love what I'm doing, but I don't have an endless supply of money to pour into the business. So, I'm really glad that I seem to be finding the price threshold that both myself and my customers can live with.
I just noticed that Maria Palma also wrote about this interview in her blog, Customers Are Always, albeit from the customer's point of view. Great minds think alike!
Posted by: Cathi Kent | July 24, 2006 11:30 AM | Permalink to Comment