Pricing

We are working hard to keep our margins up. As Inventory is judged by the profit margins they maintain and increase by buying and pricing merchandise, it is imperative that they be able to control what things are sold for. Minimums are set to maintain this margin.

ONLY INVENTORY SETS PRICES. The reason for this is so that there is a check and balance and so that the pressure from the salesperson and the customer doesn’t cause us to lose margins.

Yes, there are some times when an error has been made or we “make a deal” but this should be done through inventory.

DO NOT MAKE A DEAL AND THEN GO TO INVENTORY OR YOU WILL END UP LOOKING LIKE A FOOL WHEN YOU HAVE TO TELL THE CUSTOMER YOU TOLD THEM THE WRONG PRICE.

As a salesperson, you can go to the Sales Manager and then he or she can go to inventory to explain the situation. Or you can go to inventory direct if the Sales Manager is not available. Once a price is settled on THEN you can go to customer to negotiate. In the event inventory won’t budge and you feel there is a valid reason to change the price you can ask inventory to check with the V.P. of Production.

There are exceptions but they should be few. If they are happening frequently then I would first suspect the salesperson is not using their sales ability and substituting discounting for sales technique.

Does this take a little longer? YES! Money should come in here fast and leave here as slow as possible!

It should be further understood how pricing works and it might help you to hold the line better.

We know what percent of GP we need to allow us to make payroll, pay all the bills, take on new products from time to time, raises, give bonuses and fun stuff. Pricing is set so that we hit this needed GP amount. Every time we discount we must take money away, first starting with the fun stuff then if it continues, bonuses and then further and further down the line. It is really no different than your own finances. When money is tight at home then what gets cut first? Then the next thing you cut is? And so on.

If we maintain the margins set by inventory, which are fair to us and the customer then everyone wins. Less than this and we all lose. Discounting = lost profits that we need to keep things going well.

This is not an effort to make your job hard. Your job is to sell not to give things away as the customer would have you do. Inventory’s job is to create enough profit for us all to survive. Help them do their job and they will help you do yours by pricing things correctly and fairly in the first place.