From AOL small business this morning.
Q> I was wondering if it might be a good idea to slash my prices right now? Business is so darn slow. The problem is that I don't know if I will be able to make up for my lower profit with more business. How do I figure that one out?
http://smallbusiness.aol.com/2010/10/17/how-to-cut-prices-the-right-way/?icid=main%7Chtmlws-sb-n%7Cdl2%7Csec1_lnk1%7C181926
This is a pretty interesting article from my side of the negotiating table, where supply meets demand and prices are already forced downward. yet still I have to force something to happen sales-wise in order to feed these damn cats and keep them cool in the Florida heat. Electricity ain't cheap anymore, boys and girls.
I began lowering expectations and attempts at high profit margins as sales volume began ever so relentlessly to shrink a few years ago. From my standpoint as a small business owner, it was not unusual 5 years ago in the Florida art market to expect a double your money on everything you purchased for inventory. And it was generally perceived as FAIR and justifiable. And the cash flowed, demand was strong.
Now, due to the lack of public confidence in spending, resulting in low sales volume, I no longer attempt to sell a 1000 purchase for 2000. Instead we go for 10 or 20 % profit margin, about half of an auction house's commission. Hopefully that makes my product more attractive. I think of my product as paintings by Harold Newton and Alfred Hair, Emmett Fritz and A E Backus. Anthony Thieme and Martin Johnson Heade.
This guy, Steve Strauss, Q & A guru apparently for AOL, is pretty clear about the cost to a small business of lowering prices from a psychological customer / client viewpoint. I couldn't agree with him more.
The quandry I face in dealing with my product is this : what about the hundreds of paintings I've sold to good people for much higher prices just a few years ago ? I'm helping to devalue their investments if they purchased average, run of the mill, plain, uninspiring, lack of effort Harold Newton paintings at rock bargain prices. If my customer had been savvy enough to pay a premium over perceived value at the time and acquire top of the line Harolds, they have held their value better than the former bargains.
And just for fun, there's a nice Harold and a plain Harold. Although every painting is unique, there is no question that there is a lot of repetition in Harold's work.
Q> I was wondering if it might be a good idea to slash my prices right now? Business is so darn slow. The problem is that I don't know if I will be able to make up for my lower profit with more business. How do I figure that one out?
http://smallbusiness.aol.com/2010/10/17/how-to-cut-prices-the-right-way/?icid=main%7Chtmlws-sb-n%7Cdl2%7Csec1_lnk1%7C181926
This is a pretty interesting article from my side of the negotiating table, where supply meets demand and prices are already forced downward. yet still I have to force something to happen sales-wise in order to feed these damn cats and keep them cool in the Florida heat. Electricity ain't cheap anymore, boys and girls.
I began lowering expectations and attempts at high profit margins as sales volume began ever so relentlessly to shrink a few years ago. From my standpoint as a small business owner, it was not unusual 5 years ago in the Florida art market to expect a double your money on everything you purchased for inventory. And it was generally perceived as FAIR and justifiable. And the cash flowed, demand was strong.
Now, due to the lack of public confidence in spending, resulting in low sales volume, I no longer attempt to sell a 1000 purchase for 2000. Instead we go for 10 or 20 % profit margin, about half of an auction house's commission. Hopefully that makes my product more attractive. I think of my product as paintings by Harold Newton and Alfred Hair, Emmett Fritz and A E Backus. Anthony Thieme and Martin Johnson Heade.
This guy, Steve Strauss, Q & A guru apparently for AOL, is pretty clear about the cost to a small business of lowering prices from a psychological customer / client viewpoint. I couldn't agree with him more.
The quandry I face in dealing with my product is this : what about the hundreds of paintings I've sold to good people for much higher prices just a few years ago ? I'm helping to devalue their investments if they purchased average, run of the mill, plain, uninspiring, lack of effort Harold Newton paintings at rock bargain prices. If my customer had been savvy enough to pay a premium over perceived value at the time and acquire top of the line Harolds, they have held their value better than the former bargains.
And just for fun, there's a nice Harold and a plain Harold. Although every painting is unique, there is no question that there is a lot of repetition in Harold's work.
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