The New York Times had an article recently on the $5 pizza slice from Brooklyn. It's a small pizzeria that recently raised their price, which was already high at $4 to $5. Here's a video about them. They wanted to maintain profitability. Today's thought is short: how high is up?
Contrary to the many pundits saying to lower prices, add discounts and coupons I ask, "How high is up?" Can you bundle some products or add a service to make more profit? That's all you should be concentrating on: how to increase profits - not play Santa Claus with your markdowns.
Cheap people like the occasional rotten employee will be with us as long as we are in retail. The trick is limiting both and find both the profitable customer and loyal employee.
It isn't brain surgery but it does take thinking. When you get ready to offer yet another $20 coupon to your customers realize you have to sell at least $600 to make up the profit you've given away because the average GREAT business only makes 3 cents on the dollar. (It's even worse if you are not profitable.)
Leave Santa Claus marketing for the others, your goal is to be profitable this holiday. Think about it.
By
Bob Phibbs
