Making More Profit the Easy Way
A new retail client of mine has been struggling a bit. Although I took him on as an accounts client, being a typical retailer his need in marketing was great, so I straight away helped him set up a website, a Facebook page and got his business onto Mailchimp (all three of which cost him NOTHING!) so he could start collecting email addresses to send out newsletters.
Although of course all these (and the other marketing initiatives I encouraged him to start) were very necessary to get new customers and keep the existing ones coming back, he needed an immediate boost to profits. Having looked at his prices, I suggested an immediate 25% increase in ALL prices coupled with a rolling sale of 25% off the new prices working one-by-one through the various categories of his stock, month on month off, to avoid the appearance of his shop being a cheap discounting outfit.
Well this suggestion went down like a lead balloon – he said he would lose ALL his customers – but I worked on him and eventually he agreed, so one weekend up went all him prices by the full 25% and he promoted the first 25% sale three weeks away.
Well – guess what? Not a single customer has complained about his prices and the first sale has gone very well. The 25% increase in non-sale goods has brought about a healthy increase in his gross profit margin and he has sold twice as many as normal of the sale goods – yes, at the old prices true, but still pretty good eh?
Not a bad start, I think you’ll agree, even before we’ve done any accounting work! No wonder he’s been referring me to his friends!
If you need help with your prices (or your accounting!) contact Nick on 0800 ASK NICK or email firstname.lastname@example.org.