Your SlideShare is downloading. ×
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Pricing Strategies For Profits Plus By Tom Shay
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Pricing Strategies For Profits Plus By Tom Shay

2,674

Published on

Too many small businesses think that they must establish one margin for all the goods they offer in their business. This session by Tom Shay shows how to maximize margins while also having a price …

Too many small businesses think that they must establish one margin for all the goods they offer in their business. This session by Tom Shay shows how to maximize margins while also having a price competitive image. www.profitsplus.org

Published in: Business, Economy & Finance
0 Comments
6 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
2,674
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
0
Comments
0
Likes
6
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Tom Shay, CSP Certified Speaking Professional
  • 2. www.profitsplus.org
  • 3. What is value?
    • Quality
    • + Service
    • + Information
    • + Price
    • Value
    www.profitsplus.org
  • 4. Quality
    • Can we change the opinion of quality?
    • Can we define quality?
    • Can we change a customer to another brand?
    www.profitsplus.org
  • 5. Service
    • How do you define service?
    • Can sales be increased by changing the level of service?
    • What type of cost is there to change service?
    www.profitsplus.org
  • 6. Information
    • What does the customer need and want?
    www.profitsplus.org NEED Want
  • 7. Price
    • The relationship of quality, service, information, and price in giving value is …
    www.profitsplus.org
  • 8. Pricing 5 strategic points
    • Blind Price Items
    • Everyday Sale Price Items
    • Promotion Price Items
    • Price Sensitive Items
    • Variable Pricing
    www.profitsplus.org
  • 9. Blind Price
    • Items that the customer has no idea of what the price should be
    www.profitsplus.org
  • 10. What do these items sell for?
    • 8” taper
    www.profitsplus.org Crayola 24 pack crayons Deck of Bicycle brand playing cards Duracell 9 volt battery
  • 11. How do you determine a blind price item?
    • Takes extra time to price
    • Requires extra handling for the customer
    • Is a natural “add on” sale item
    • Seldom used
    • Is a repair or replacement item
    www.profitsplus.org
  • 12. How do you determine a blind price item?
    • Has luxury or status appeal
    • Is seldom promoted
    • Is not a seasonal item
    • Is a recreational item
    • Not sold in mass merchants
    www.profitsplus.org
  • 13. Possible margins are:
    • Score one point for each yes answer:
    • 1 to 3 points: 40% - 45%
    • 4 or 5 points: 46% - 55%
    • 6 points: 56% - 60%
    • 7 points: 61% - 65%
    • 8 - 10 points: 66% - ?
    www.profitsplus.org
  • 14. www.profitsplus.org And your current gross margin is: If you raise your price: 10% 15% 20% 25% 30% 35% 40% 50% 5% 33.3 30.0 25.0 16.7 14.3 12.5 11.1 9.1 6% 37.5 28.6 23.1 19.4 16.7 14.6 13.0 10.7 7% 41.2 31.8 25.9 21.9 18.9 16.7 14.9 12.3 8% 44.4 34.8 28.6 24.2 21.1 18.6 16.7 13.8 10% 50.0 40.0 33.3 28.6 25.0 22.2 20.0 16.7 11% 52.4 42.3 35.5 30.6 26.8 23.9 21.6 18.0 12% 54.5 44.4 37.5 32.4 28.6 25.5 23.1 19.4 15% 60.0 50.0 42.9 37.5 33.3 30.0 27.3 23.1 16% 61.5 51.6 44.4 39.9 34.8 31.4 28.6 24.2 18% 64.3 54.5 47.4 41.9 37.5 34.0 31.0 26.5 20% 66.6 57.1 50.0 44.4 40.0 36.4 33.3 28.6
  • 15. www.profitsplus.org
  • 16. Everyday Sale Price
    • Items that you have to match your competitor’s prices in order to not have an image of being overpriced.
    www.profitsplus.org
  • 17. Everyday Sale Price
    • To find the everyday sale price items:
      • Shop the competition
      • Watch their ads – both internal and external
    www.profitsplus.org
  • 18. Everyday Sale Price www.profitsplus.org
  • 19. Everyday Sale Price
    • Another way to announce everyday sale prices:
      • Purchase the item at the competition
      • Display the item and receipt on an end cap
      • Create an “insult card” noting the comparison
      • Complete the end cap with a blind price item
    www.profitsplus.org
  • 20. Promotional Price Items
    • Items that are your sales items with a definite ending date to the special price
    • Two types of items:
    • 1. Your everyday sale price items
    • 2. Items you purchase from vendors for the specific purpose of putting on sale
    www.profitsplus.org
  • 21. Price Sensitive Items
    • Items that are related to the everyday sale price items, and that customers have a sketchy idea as to what the price is
    www.profitsplus.org
  • 22. Price Sensitive Items
    • 1. Has a “sister” product that can be an everyday sale price item 
    • 2. The same item, but in a different size/color, is an everyday sale price item
    • 3. Has additional benefits/features that can be easily demonstrated or explained
    • 4. Not sold in mass merchants
    www.profitsplus.org
  • 23. Price Sensitive Items
    • 5. Not advertised by competition
    • 6. Solves a problem/need better than the product asked for
    • 7. Scores 3 or less on the 8 remaining blind price item list
    • 8. Quality is immediately proven by way of manufacturer name
    www.profitsplus.org
  • 24. Price Sensitive Items
    • Items can be as much as 10% above a competitors price, up to $4.00
    • We can do this because:
      • The customer is already here
      • The customer is in a hurry
      • There is a minimal price difference
      • The competition is too far away
      • The value formula
    www.profitsplus.org
  • 25. Variable Pricing
    • Strategically increasing prices to enhance your overall margin
    • Accomplished by:
      • Departmental margins
      • Fineline margins
      • Rounding techniques
    www.profitsplus.org
  • 26. Variable Pricing
    • Department: Tools
    • 1. Hammers 2. Screwdrivers 3. Wrenches 4. Pliers 5. Sockets - Open 6. Sockets - Sets 7. Miscellaneous
    www.profitsplus.org
  • 27. 24 Cent Pricing System www.profitsplus.org Cost You add Old Retail Add 24 cents Round up to Minimum Margin .01-.10 .10 .20 .24 .49 80.00% .11-.15 .15 .30 .24 .59 75.00% .16-.20 .20 .40 .24 .69 71.00% .21-25 .25 .50 .24 .79 68.00% .26-.30 .30 .60 .24 .89 66.00% .31-.35 .35 .70 .24 .99 65.00% .36-.40 .40 .80 .24 1.09 63.00%
  • 28. Variable Pricing
    • $2.00 to $9.99
    • .29 .49 .79 .99
    • $10.00 to $19.99
    • .99
    • $20.00 to $49.99
    • $_1.99 $_2.99 $_4.99 $_6.99 $_7.99 $_9.99
    • $50.00 and above
    • $_2.99 $_4.99 $_7.99 $_9.99
    www.profitsplus.org
  • 29. www.profitsplus.org
  • 30. The sequence used in our business
    • Everyday sale prices
    • Promotional prices
    • Price sensitive items
    • Variable priced items
    • Blind priced items
    www.profitsplus.org
  • 31. Everyday sale prices
    • Start watching and collecting ads
    • Change the prices as you find them
    • Never have the lowest price in town
    • If you will lose more money than you are comfortable with, do not stock the item. But, …
    www.profitsplus.org
  • 32. Promotional prices
    • Create an advertising budget
    • Don’t forget education
    • Stretch your risks over time
    • Measure the results
    • Promote – not just advertise
    www.profitsplus.org
  • 33. Price sensitive items
    • These items are harder to determine
    • Use the chart to help stretch margins
    • This program is low maintenance
    www.profitsplus.org
  • 34. Variable pricing
    • Review your margins by department and fineline
    • Implement the 24 Cent pricing system
    • Start rounding prices
    www.profitsplus.org
  • 35. Blind price items
    • Identify the other 3 groups first
    • Apply the 10 point rule to blind price items
    • Always look for items to add to list
    www.profitsplus.org
  • 36. Remember this!
    • Price is not where we fight the war.
    • Don’t forget the formula for value.
    • Quality
    • + Service
    • + Information
    • + Price
    • Value
    www.profitsplus.org
  • 37. Does the formula work?
    • “ There will always be enough people who want your service and quality goods. You can make it as long as you remember that. But, if you try to get into our ball game and neglect that element of personal service, we will cut you to pieces.”
    • - James Cash Penney
    www.profitsplus.org
  • 38. If you gain a customer because of your prices, then you will also lose that customer because of your prices ! www.profitsplus.org
  • 39. Final Note www.profitsplus.org
    • This presentation will be specialized to your industry and your attendees’ specific needs.
    • For more information about having Tom present for you, contact us at (727)464-2182 or visit our website: www.profitsplus.org

×