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UPDATE == "Net" pricing



Nov 14, 2009, 10:49 AM

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UPDATE == "Net" pricing Can't Post

For awhile now, we've been marking a lot of items, especially precious metals and findings "net".

What this means, is rather than applying a standard markup, and then giving some "fake" discount, we've been marking the items at our bottom-line price, which is based on what we paid for the item. This makes it easier for some things -- especially "catalog items" -- to compare prices. If you like our prices, buy with us. If not, see if you can find it cheaper elsewhere.

The other effect of this is allowing me to move to a business model where I might be able to have help running the shop, and stay open past our Feb cut off date. That is not for certain, and requires a lot of things to happen. But, you will be seeing a lot of our items move to "net" pricing.

Originally, when we opened, that is what we did. But everyone wanted a "discount." So, to make them happy, we _RAISED_ our prices, and applied a discount, which brought the item back to our original marked price. We've never hidden that fact, and if you search the forums, or our old mailing list messages, we've said this many times.

But, this created a problem with getting anyone else in to run the shop. They wouldn't know the discounts, and since different items had different discount levels, it would create problems. Even Marie would be calling me many times a day when I wasn't in with pricing questions.

So, we started "net" pricing. Actually, we started 3-tier pricing on our precious metals and findings. That was "retail", "good customer" and "wholesale" pricing. Most people got the "good customer" price, while our larger customers and resellers often got the wholesale prices. This too created a problem, since all the packages had to be marked, and it only worked with the items we kept "behind the counter" as it were.

When you go to the supermarket, the home store, or the garage, you don't "bargain" for a discount, unless you have some large order or a special need. You just look at the prices, and either accept or reject it.

In order for the shop to continue, I would need to go to that sort of pricing model. "net" pricing. The price marked is the price paid.

Since we are not a "retail" shop any more, we don't have to figure in retail pricing, costs, and overhead for the the $2 custome who takes 2 hours to pick a bead.

I've always liked the "one price" policy, since if you can sell it for $2 to one person, why not sell it for $2 to everyone? I don't like minimum quantities, and such (though I understand the labor/time savings in pre-packaged items). I also understand _TOTAL_DOLLAR_ purchasing. For large businesses it's not quite the same as for small ones. But, for a small business (under 20 employees by currennt definitions), TOTAL DOLLARS spent by a customer on a single order, or several regular orders, counts for something towards the bottom line. So, even though we have a "net" pricing, there is (or would be) a little wiggle room for TOTAL DOLLAR orders that go over a certain amount in different categories (precious metals, gemstones, etc).

So, look for our prices to contain the word "net" more and more often. All new items are being marked "net" or with one of our two colored pricing discount levels - "orange" for half-off (usually on our lower end and machine cut beads), and "blue" for our 40% off standard discount on the basic mid-range strands. The reason we are still doing that is we do sell to a lot of shops, and it makes life easier for them if the strands are not marked with the price they paid until they can re-price and set them out with their own pricing.

All our precious metals, findings, center piece beads, higher-end, and such will be "net" pricing.

The actual price you pay at the register is not going to change (except as costs dictate), and in most cases, the overall price has gone down, since we are not doing retail and our costs/overhead has gone down. Gold of course is at record highs, and silver is pushing toward $18. We have no control over that, but we still do hvae some gold and silver at pre-rise prices! (Most gold at under $800, and most silver at about $12). All new precious metals are at market prices, but the stuff we already have marked, we are selling at the marked prices.

I need to clear out all the precious metals before we close. If we stay open, we'll only stock the very, very basics (or what our customers are actively using), and order in what people need when they ask. That will cut overhead greatly too.

IF you have questions, please post here in the forums, send a PM, or email, or STOP BY!! We've gone through a lot of changes in the past few months, and it's a shame it's drawing to a close. Catch us while you can.
PUGDOG's Rock & Bead Shop
Pittsburgh, PA 15217


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