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June 23, 2009 |
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"Is it Low-balling to Pass on End Quantity Pricing to a Client?"
Dear
Top Secrets Subscriber,
Looks
like last week's message on "low-balling competitors"
struck a nerve!
I
received many comments... most from value-conscious
promotional advisors who appreciated the reinforcement,
and a few from people who had questions about low-balling
vs. passing on savings. Here's one variation on
the
question:
Is
a Distributor "Low-Balling" if They Get End Quantity
Pricing and Pass the Savings on
to their Client?
Great
question!
|
Top
Secrets Author, Entrepreneur & Business Consultant,
David Blaise |
Before
I answer it, let me say that the main point I wanted
to make in last
week's issue is that clients who buy
primarily based on price are normally the least loyal clients you can find... The
moment someone else comes along with
a lower price,
they're gone!
Also keep in mind, that end quantity pricing normally
means you get a SMALLER profit margin on a LOWER selling
price... which means that
much of the "savings" you
pass along comes right out of your own pocket!
For
example: Let's say you have access to end quantity pricing
on the
following grid:
Quantity |
100 |
250 |
500 |
1000 |
2500 |
Unit
Cost |
10.00 |
9.05 |
8.25 |
7.58 |
7.00 |
CODE:
PQRST
|
So
your unit cost on the item is $7.00 (T) or $4.90 regardless
of quantity.
If your client wants 100 units and you offer to "pass
on the savings" and sell them 100 units at the end quantity
price of $7.00, you give up $290 in gross profit.
Observe:
100
units @ $10.00 = $1,000 (P) = $500 gross profit.
100
units @ $7.00 = $700 (T) = $210 gross profit.
Same
order. Same amount of work, $290 less in profit to pay commissions!
Is
that Low Balling?
You
have to decide for yourself... Just go in with your
eyes wide open and understand what's really happening
to your money!
-
If you're a business owner in need of ideas and strategies, turn on your speakers and click
here.
-
If
you're a salesperson in need of more
sales and clients turn on your speakers
and click
here.
Sincerely,
David Blaise
Top Secrets of Promotional Products Sales
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