I often receive phone calls from prospects who want the lowest price.  I understand.  Everyone wants to pay as little as possible for their inventory.  I will still wait for that call that asks how high a price I will take!  However, most callers equate paying the least possible for ingredients going into their product with becoming a business success. 

 

Employees in large corporations may be rewarded for how low a price they pay for products used by their company.  The self-employed are rewarded for how much profit they make.

 

Lets take an example.  If you are self-employed, do you want A or B?

A                                                                                                                  B

Costs:  Mat and Photo	$10.00		Costs:  Mat and Photo	$20.00
Selling Price:  Mat and Photo	$20.00		Selling Price:  Mat and Photo	$40.00
Profit	$10.00		Profit	$20.00

 

Of course, the answer is B assuming you are only selling one unit.  It maximizes profit.  However what if we add volume considerations?

A                                                                                                                  B

Costs:  Mat and Photo	$10.00		Costs:  Mat and Photo	$20.00
Selling Price:  Mat and Photo	$20.00		Selling Price:  Mat and Photo	$40.00
Profit	$10.00		Profit	$20.00
Units Sold	10		Units Sold	4
Total Profit	$100.00		Profit	$80.00

 

Now your choice is A. It maximizes profit.  However, what if the local Big Box cheap store offers photo and mats at $10.00?

A                                                                                                                    B 

Costs:  Mat and Photo	$10.00		Costs:  Mat and Photo	$20.00
Selling Price:  Mat and Photo	$20.00		Selling Price:  Mat and Photo	$40.00
Profit	$10.00		Profit	$20.00
Units Sold	6		Units Sold	4
Total Profit	$60.00		Profit	$80.00

 

 

Now it is B again. 

 

I did play a trick on you.  You did not lose all your sales of $20.00 mats and photos.  You just lost 4 out of 10.  Why did the other  6 still sell.  Maybe, because they liked your photograph better than the Big Box store photograph.  Maybe to some customers the mats on the Big Box store photo looked pretty bad because they were from China.  And, guess what.  You still sold all 4 units of the more expensive item!

 

What does that tell you?  Maybe you think you should just sell expensive prints so you won't be effected by the Big Bad Box store?  Could be.  But that is actually a bit simplistic.  Actually, our little example tells you several possible avenues you can follow:

 

    Don't sell cheap Mats and Photos, sell only expensive Mats and Photos..

    Sell only photographs that look better than the Big Box store Mats and Photos.

    Sell only mats from MATcutter.com because they look so much better than the Big Box store mats.

 

How you answer these questions is Niche marketing!  You are trying to define a place where you maximize volume,  you maximize profit  and where the Big Box Store can't hurt you.

That is not necessarily the cheapest materials.  The Big Box Store buys millions of mats in the cheapest area of the world.  What's the sense of trying to fight them?