Customer Etiquette Part I: A Small Business Owner’s Perspective

I may get a some backlash on this blog especially when talking about customers but I think it’s worth pointing out. There are days when a customer will browse through the store and openly comment to me about our prices.  Comments like:   “I’ve seen this at XYZ for five bucks less!” or “I can get this at XYZ for A LOT CHEAPER.”  We have been criticized for having higher prices than other retailers especially when products go on ‘sale.’  As a human being, I do feel a sting when comments like these are said to me.  I’m not sure how to respond without being defensive.  I agree that no one likes to feel they are getting ripped off.   In 425 words or less,  is my explanation for our higher but FAIR prices.

There is a downside to getting the volume discount price from the distributor.  The keyword is VOLUME.  We don’t buy in volume because it  means commitment to storage space, minimizing ‘facings’ or number of unique products, being stuck with an overexposed product, and making our business less nimble to move on current trends and demand.  If we had to buy 10 cases of blah blah just to get the discounted price, then we have to get it out the store quickly before the next hot product comes  which means a ‘sale!’  At SWAM, we will rarely discount items at 50% off. Why? because we don’t normally mark anything up over 50%. In the clothing world, you can expect to sell a t-shirt 75% over cost and still maintain customer loyalty.  If I priced Crown Royal at 75% over cost, I can assure you I will not be in business very long.  Keeping in line with competitive pricing is relative to how low you want your profit margin to be.   I’ve recently attended a Johnny Cupcake seminar and he made a great point about ‘sales’ and markdowns.  When we continue to discount 20 to 50% off the retail price, we train our customers to shop only for discounts and therefore decreasing the value of the store’s image.   We have recognized that having a ‘sale’ is not always good thing at SWAM.  Regular customers will often question why an item is discounted.  They will ask ‘Is it junk, Jill?’ or ‘Is it old?’   We appreciate that customers hold us to a higher standard that we are capable to sell what we have and bring in new items consistently.   And about getting ripped off at SWAM,  no I don’t drive new Mercedes every year.

For an interesting read, check out this book…

Feb 8, 2012 Update:  Just received the February Hawaii Beverage Guide which coincidentally shares a story called “Small is Beautiful” by Brandy Rand

Category : Blog Posted on February 8, 2012

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