Time To Raise Prices?

7/14/2011 2:18:34 PM #

I totally agree with Merry.  For too long, both brick-and-mortar retailers as well as internet retailers have been competing for a "race to the bottom", price-wise.  Anyone with a good business background can tell you that no one ever really wins the "race to the bottom"  (especially in these times, with all the price increases that we have seen in our industry - plus all the increases in the normal cost of doing business, as Merry says).  At Poolandspa.com, we have been very supportive of the recent attempts by some manufacturers at enforcing MAP pricing policies.  While many in this industry have been not too supportive of MAP pricing, it is a tried and true formula that has been adopted by many other industries.  Why would you want to only make $50 selling a pump and filter system when you could be making $200? Why would you buy, floorplan, stock and sell a spa for only $500 over cost, when you should be making at least $2000 over cost?  It just makes no sense.  Unfortunately it is very hard for manufacturers and distributors to enforce MAP pricing, but that alone should not be a reason to at least give it a shot.  But if everone in our industry would adopt Merry's point of view, we would ALL benefit, especially during these tough economic times.

Dan Harrison

7/15/2011 12:12:19 AM #

Great timing for this article.  I was "competing " on a job opportunity.  But when I found out my competitor was 17k less then myself, I threw in the towel.  No it was not apples for apples.
  I have been around this industry for 26 years.  The product we build is better, managed better, less problematic.  Referrals prove that again and again.   Thanks for the reality check.

Peter langevin

7/17/2011 9:00:06 PM #

I am getting undercut constantly by those lowering margins to steal business.

Kathy Best

7/19/2011 7:44:09 AM #

We definitely have this same problem, but one thing you can do that works some of the time is to try to establish upfront your value-added credentials. I developed a checklist of questions for the  prospective pool customer called "The Matrix" that is a series of questions with a score value assigned to each question- things the client can use to compare companies, such as "Has your company been selected as an Aqua 100 Company?" etc. The total adds up to 100. We give them one already filled out  for our company, and a couple of blank ones we encourage them to require other companies they consider to also fill out, along with a tally sheet they can use to compare scores. It puts the differences between your firm and others in written form, and hopefully shows objectively what  qualities your firm has that is worth the money they will not be getting from your competitors.

My feeling is you have to sell the company first and try on the very first visit  to make them want to do business with your company the most- you are a cut above the rest.

Merry

7/19/2011 1:30:13 PM #

That is a good idea.

Dan Harrison

8/16/2011 12:12:09 PM #

I spent a number of years working for a pool builder that had the highest prices in town, they did cave into pressure from customers wanting us to lower our prices and they are a successful pool builder today.  I am now in a different part of the state where pools are sold for less than I sold them for 8 years ago, why?  We allow this to happen by price matching our competitors, why?  We all offer different equipment, cleaners, concrete decking and services, why would we be priced the same.  I would never consider walking in to a Ruth Chris Steakhouse and try to get them to sell me a Sirloin steak for the same price as a Sizzler, why should someone come in to a nice store and expect us to sell a pool for the same or less money as a fly by night pool builder.

Hold firm on your prices, profit is not a bad word (Thanks for letting me steal that Lyla).

Mark Yates