On Vendor Client Relationships!

[Judah Gutwein]

Friends,

Just an interesting observation with a video to enjoy!

Many vendors get asked all of the time, whether they would be willing to drop their prices on any given item(s) in order to complete a sale. Assuredly, people are free to try and negotiate a discount, this is after all a Capitalistic society.
Within this context, it is always interesting to view the differing approaches and dynamics between vendors when it comes to issues like pricing.

Some vendors will opt to place their best foot forward and will apply razor thin profit margins which are fixed and inflexible. The upside to this approach, is their competitive upfront pricing. The downside to this approach, is their inability to offer further concessions in the event that the client will ask for a (further) discount (beyond the stated website discounts etc.). In addition, not every customer will ask for a discount on well priced merchandise. These customers may have been inclined to pay a bit of a higher premium and the difference is lost profits for the vendor.

(Conversely) Some vendors will artificially inflate their prices with a built in cushion and in anticipation of a negotiation process, whereby they will drop the asking 'retail price' and make you (Joe Q. - customer) feel like you got a great deal, while they come away with their originally intended profits. Upside to this approach is the way they cater to and capitalize on consumer psychology, as wel as their ability to be 'flexible'. Another upside to this approach is assuredly the fact that not every customer will ask for a discount, in which case, said vendor nets a larger profit. Downside to this approach (aside from any consideration other than a business per$pective), is the higher upfront requested premiums.

Vendors can argue the merits of each approach, with the knowledge that it is rather difficult to incorporate both in the same business model.........and remain in business!

Similarly, it is always interesting to view the differing approaches and dynamics between consumers when it comes to requesting a discount.

Some consumers will ask for a discount, with the knowledge that Vendor will say 'yay' or 'nay'.
Other consumers will make a statement (not an inquiry) of what they are willing to pay (or what they will be paying) for same merchandise.....with the knowledge that vendor wil say 'yay' or 'nay'.

Suffice to say, I found this video online and got a real kick out of it!!

Hope you will too!

http://www.youtube.com/watch?v=R2a8TRSgzZY&feature=player_embedded

 

[strmrdr]

I know you intended it to be funny but I want to pimp my article hehehehehe

http://journal.pricescope.com/Articles/23/1/What-makes-for-a-great-client.aspx

 

[Judah Gutwein]

Funny for sure.....but serious with respect to the actual observations stated.

"I want to pimp my article hehehehehe"

You are of course entitled

...to rain on my parade...

 

[perry]

Judah:

You raise an excellent point. Of course you do realize the difficulties involved.


Storm''s article also points out how many of the PS vendors operate. I have a working relationship with one of them, and have dealt with another on good terms.

I would like to propose that I use a different approach for higher end purchases.

I know that a business must make a reasonable profit and that markups must cover the cost of their doing business (which includes a lot of various expenses).

If I do not know how a company operates - I will have a discussion with the owner (or perhaps manager) on how they price things and how they would approach things for an order. As an example: I recently purchased a new car (in March). I faxed a requirements list to a series of auto dealers and asked them to propose a vehicle that met that list with a price - and explain how they arrived at that price. Then if I chose a different car from their lot I would use the same pricing method.

Now truth be told - most car dealerships wanted nothing to do with me and my approach. But, some of them did understand that different customers work in different ways and complied with my request. After digging through the reply faxes I called one up, set an appointment, chose a car from their lot, and closed the deal.

I did not even go with the "lowest" cost. I went with a dealer who provided the best explation of how they could price their cars so that they could provide a continueing level of service.

I hope that helps you with your quest on this difficult subject.

Perry