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Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
Featured Biz Question
We are a small business which sells apparel and have local stores which carry our product. We are planning to open an online store. How do we price our item so as not to anger our stores which have been our "bread and butter" to this point. If a person can get our product on-line for 15% less (because we are now the retailer) than an in store purchase, wouldn't we be creating a problem? Do we have one suggested retail price for both? Also on our hangtag on the garment in the stores, is it inappropriate to put your website on that tag so customers can see your entire line and purchase all your products? Would stores object? We want to make money but also do the right thing. Help would be appreciated.
Answer from our Guest Expert Lillyvette Montalvo
Retail Business Prices
Dear Idea Cafe Schmoozer,
I'm sure you feel like you're really in a pickle. In truth, though, you'd definitely be in one with some of your retailers if you decide to undercut their prices on your new website. The problem is there's a manufacturer's suggested retail price here -- your price. So, your price suggestion guides the retailers. If you take your products online and reduce this price, can you afford to lose these relationships you've nurtured with these stores that have carried your products? If you severe that relationship, will you be able to survive solely with your Internet-based store?
Look at it this way�you're automatically shutting out the people who've helped you get where you are today. Once you advertise lower sales prices, you're already cutting out the retailers from the picture completely. You're not even giving them a chance to compete�and you sold them the product.
Are you willing to break that relationship forever? Will the retailers feel betrayed? Will they then provide you with negative word-of-mouth marketing that could damage your business beyond repair? Are you willing to accept all of these factors?
If you believe you've had a good relationship with these retailers, you want to save this relationship. And if you believe that without the retailers you couldn't have gotten to where you are today, then "share the wealth!"
Here's what I mean....continued
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About the Expert
Lillyvette Montalvo
Lillyvette is a Certified Diversified Cash Flow Specialist who used her years of public relations, marketing, and financial experience to create Star Capital, Inc. which helped biz owners get the dollars they need to make their businesses grow and succeed. more
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