Do I live in Baltimore?

 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.