Set your price 137
Even the cheapest supermarkets charge as much as they can
possibly get away with for their products. They deliberately
sabotage their ‘value’ brands (I don’t mean putting in nails).
They put them in cheap and nasty packaging, and hide them
in other parts of the store where only value shoppers go. The
‘premium’ products have little to justify their much higher
prices, beyond a string of adjectives. It’s not simply ‘Bacon’, it’s
‘Finest Maple-cured Canadian Back Bacon’.
The problems with being cheap
Being cheap in business can be extremely difficult to maintain.
You can always come down in price. I don’t mean drop your
price at the first whiff of trouble. I mean, ‘Well, I can offer you
a special discount, seeing as it’s
you,’ or, ‘I can add an extra service
for free.’ That way, they feel good,
you feel good.
In the nineties, an ebullient Frenchman set up a bistro called Pierre Victoire.
He wanted to sell cheap French food with a minimum of fuss. He borrowed
the food to open up, got the chairs from a charity shop and charged £5 for
a set lunch. People loved it. Demand grew.
So he started opening bistros around the UK, and before long he had
over 100. But margins were minute: 50 covers at lunch, at £5 a head =
£250. Take off the cost of food, staff, overheads. If you smashed a plate at
lunchtime, your profit was wiped out. The chain collapsed spectacularly into
liquidation, and he left the country.
I’m pleased to say though, he’s back now, and like the true entrepreneur is
trying it again. Only this time, his prices are that much higher.
you can always come down