I just read Beverly Hills, Baltimore and Baghdad - Server Makeup and Mogging Sales by Jim over at Power Word: Gold.
I may edit this post with more thoughts later on but here is a story of a guy who lives in Baltimore enjoy!
I live in Baltimore and visit
a new store in Baltimore
and they charge $10 for a shirt, $10 for some pants, hmm $10 for some gloves.
When I next come back to the store I would expect to pay $30 total for those three
items. If I went into the shop and they were asking for $20 for each of these
items I might be shocked, angry and maybe cry a little. This shock may change
my buying patterns maybe I’ll go to another shop or try to make the clothes
myself, maybe I’ll rummage around the city and try and get some clothes, this
might take a long time because even though I might come across some clothes
they may be the wrong colour or size. Over time I might realise that $20 is the
new going rate for a shirt, when I come back to the shop I’ll bring more money
with me. I go back into the shop and the price of a shirt is $17, hmm I might
feel a greater urge to buy a shirt maybe some pants they have come down to $17
as well. I am a little concerned because I don’t want to come back to the shop
and shirts are again $20.
I visit a new store in Beverly
Hills and they charge $100 for a shirt, $100 for some
pants, hmm $100 for some gloves. When I next come back to the store I would
expect to pay $300 total for those three items. If I went into the shop and
they were asking for $200 for each of these items I might be shocked, angry and
cry a little. This shock may change my buying patterns maybe I’ll go to another
shop or try to make the clothes myself, maybe I’ll rummage around the city and
try and get some clothes, this might take a long time because even though I
might come across some clothes they may be the wrong colour or size. Over time
I might realise that $200 is the new going rate for a shirt, when I come back
to the shop I’ll bring more money with me.
I go back to Baltimore I’ve got a date with Miss Proudmoore,
I have most of my outfit sorted but I am missing one last item, I need an
awesome looking shirt. I visit my local shop and /gasp the price of this
matching shirt is $100 that is crazy. This is not Beverly Hills! But damn I really need this
it’s my last piece, I buy the shirt.
I finally figure it out the store in Beverly Hills was a boutique and had awesome
stuff that was priced higher. The Baltimore
store was a wholesale shop where they had tonnes of stuff and sold it cheap.
But hold on a minute the Baltimore shop had a $100 shirt! Maybe the Baltimore shop caters to
a wider range of clientele, they offer the bargain basement stuff but also the
high end couture stuff. The shop is aspirational, today I can only afford the
$10 shirt that’s cool but I can look at the $100 shirts, I might go out into
the world and try and make more money so that one day I can come back and buy
the $100 shirt.
A guy in Beverly
Hills would love to buy a shirt for $10 but if the
store is charging $100 and he wants the shirt he will buy it because it is the
going rate.
Shirts have been sold for a long time now, perhaps you think
the high prices are behind us, maybe the ideal way to run your store is to
price low, to price high or to price certain things high and price certain
things really low. Only you as a store owner can decide this. You might open
your shop right next to a huge mega store that has lots of inventory and uses
varied pricing. In this case you might have to focus on building up your own
inventory, maybe buying up items from the mega store and pricing them for much
much higher.
You might have heard I recently sold a shirt for $10,000 and
the best thing about that was I actually purchased the item for $100 a few days
earlier from another shop. The buyer would have preferred to pay $100 but was
willing to pay $10,000.