The Pricing Dilemma

What’s your price? As you can imagine, this is one of the first questions that is asked. One of the leading office products manufacturers responded recently to charges that their  independent dealers were “up in arms” over the discovery that many of the products that they (and their customers were seeing online) were below the best price that their national buying group had negotiated with them.

What’s going on? We’re talking about over 500 dealers that belong to the group purchasing organization. The manufacturer responded by saying that Amazon and other etailers were not price leaders, but “price followers.” They tracked Amazon on a number of items and found that on one particular product, Amazon changed their price seven times in one day!

Once WJ Office had a janitorial products provider that would never give us a cost that we could count on. They wanted us to call them to get a quote each time we wanted to purchase that item. That did not work for us. We needed a price that not only WE but also our customer could count on that it did not change from day to day, or in the case above, hour to hour.

How do YOU evaluate cost? Is it just the price at that moment in time? Do you care if it changes over the course of a day? Staples changes their online pricing on Saturday nights on up to 10,000 items!

Price is what you pay for that item right now. Cost encompasses all of the other things. How many shipments does it take to receive your order? Does the price include freight? If not, is freight inflated much higher than it should be? Does it get “dropped” at the door and someone from your office must take it to where it belongs? How are billing issues and returns handled? Are you having to “shop the web” to find the lowest possible cost just to find yourself getting behind in your other more important duties?

Price is a key to the door that opens a business relationship. But it’s not the only key. What separates YOUR business from the competition that may sell below your cost or that may jockey the price all over the board during the day? Something to think about. It’s not always what it seems to be.