Basing Strategy on Price = Bad

By April 2, 2015 February 4th, 2020 No Comments

Found myself with some time this weekend to write a short post on an issue that is unusually common with some of the small businesses I speak with, especially those outside the U.S.
Discussions about marketing and placing products with retailers or distributors is an important conversation to have for a small manufacturing business. Promotions, competition, and other factors are quickly brought up, which makes sense..
However one of the most basic and fundamental strategies, especially when going into retail, is the pricing strategy.
Retail and distribution fees can be more than expected, and when you`re selling a lower-end product, you could be making mere pennies or even losing money on your current price. Why would anyone essentially give their product away for nothing?
It`s crucial to go over fees ranging from freight to potential product call-backs to be properly prepared for what retail can bring.
The other main issue I see with small product-based businesses, is their willingness to sell themselves short. What I mean is that instead of competing off of innovation and marketing strategies, they decide to cut-down prices to encourage purchases.
While sometimes deals can be a good thing, when you`re talking about supporting your business in the long-run…it just doesn`t work. Retailers might want products that sell off shelves, but if your business is lacking financial stability then they`ll never buy from you!