Tags |
|
|
Links |
|
|
Write You - How Price Gouging Can Hurt Your Business
Many business owners don’t realize how important it is to get payroll tax payments made on time. If a late payment is made, once the IRS catches up to it, the penalties are quite stiff: 10% off the top, plus interest. Try earning that at a bank today! Resist the temptation to pay late, because it’s not a money saver, it’s a money loser. Plus, penalties are not deductible.Quick Tip: the IRS uses the term “tax deposit” to mean “tax payment”, and uses the term “monthly depositor” or “semi-weekly depositor” to mean “monthly payer” or “semi-weekly payer”, respectively.Determine Your Payment ScheduleBefore you can determine when the tax payment is due, you must first determine if you are a monthly depositor, or a semi-weekly depositor. Which type
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environ
What is the one thing that 90% of all print ads lack? A HEADLINE.When you read the newspaper, would you read an article without a headline? No. The headline gives you a “shorthand” for what the article is about. The Headline is what lets us know if we want to read the article.It’s the same with your advertisement. The Headline tells the reader “HEY! This concerns you! Read this!”Most ads fail to generate a profit. Here’s one major reason; The reader never read the ad. Why? There is no Headline to tell the reader why they should read the rest of the ad. The headline tell the reader the benefit of reading the ad. What’s in it for them.“But,I used a Headline & it didn’t make any difference.”Here’s why a Headline fails;● The He
From a marketer’s perspective, attaching a price tag to a product or service is always an agonizing experience. What is the right price? This question is hotly debated in meeting rooms around the world every day. The search for the perfect price may be the Holy Grail of marketing.
Pricing is like sunblock. No matter how you decide to apply it, the question always lingers; how much is enough? How can you avoid leaving money on the table without being burned by claims of price gouging?
While everyone certainly wants win-win relationships, the buyer and seller are adversaries where pricing is concerned. The seller wants to get the most money possible for their offering, because each additional dollar gained is pure profit. From the buyer’s perspective, less is better and free is best.
The List Price Obstacle
Most claims of price gouging are based on comparisons of asking price to published list price. From the buyer's perspective, list price is the ceiling, the most they should have to pay for a seller's offering. More importantly, list price becomes the basis from which discounts are taken.
The idea of establishing a list price for a product is actually a fairly new invention. As recent as the middle Middle agesAges, prices were based on perceived ability to pay versus being tied to some intrinsic worth of the product itself. For example, when a nobleman was purchasing a commodity such as food, they would routinely pay several multiples over what a peasant farmer would pay for the same product. Why? Because they could. The seller would have no trouble asking the nobleman for the higher price, and the nobleman would have no problem paying. In those days, gouging only referred to activities having to do with battles and body parts.
For most of us, we believe prices can only go down from list price. When buying a car, for example, nobody expects to pay "sticker". In fact, many car buyers believe that list price shouldn’t be the basis of pricing discussions at all. Instead, they focus on working from the dealer’s invoice price. How shocked these same buyers are when they’re asked to pay over sticker! This has happened when anticipation for a new model creates high demand though the product is in short supply. Examples include the original releases of the Mazda Miata, Dodge Viper, Nissan Xterra, the reintroduced Volkswagen Beetle, and the 2005 Mustang.
When sellers ask for more than list price, buyers deem it "unfair", “outrageous” and -- of course --price gouging. Now it's time to play the blame game. We can blame manufacturing for not producing enough vehicles to meet demand. We can blame marketing for creating too much interest in a product they couldn't supply. We can blame the greedy capitalists who are exploiting the citizens. Nobody seems to think to blame the use of a list price.
List prices are some of the best fiction ever written.
Should We Sell Over List?
Some routinely call the selling of a product at more than list price “gouging,” and consider it unethical and even immoral.
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environm
Traffic lights – the decoration de rigueur for performance dashboards and reports. Have you gotten more carried away with the decoration, than with the rigueur? Take a look at these four common approaches to traffic lights, and see if you’ve got some room for improvement.Approach 1: % difference from month to monthWhen this month is 10% worse than last month, the traffic light turns red. When it’s 5% worse than last month, the traffic light turns amber. When it’s 10% better than last month, the traffic light turns green. Obviously, this approach works for time periods other than a month, and for cut-offs other than 10% and 5%.Such traffic lights encourage us, usually, to ask questions like “what caused such a big difference?” In turn, such questions enco
The List Price Obstacle
Most claims of price gouging are based on comparisons of asking price to published list price. From the buyer's perspective, list price is the ceiling, the most they should have to pay for a seller's offering. More importantly, list price becomes the basis from which discounts are taken.
The idea of establishing a list price for a product is actually a fairly new invention. As recent as the middle Middle agesAges, prices were based on perceived ability to pay versus being tied to some intrinsic worth of the product itself. For example, when a nobleman was purchasing a commodity such as food, they would routinely pay several multiples over what a peasant farmer would pay for the same product. Why? Because they could. The seller would have no trouble asking the nobleman for the higher price, and the nobleman would have no problem paying. In those days, gouging only referred to activities having to do with battles and body parts.
For most of us, we believe prices can only go down from list price. When buying a car, for example, nobody expects to pay "sticker". In fact, many car buyers believe that list price shouldn’t be the basis of pricing discussions at all. Instead, they focus on working from the dealer’s invoice price. How shocked these same buyers are when they’re asked to pay over sticker! This has happened when anticipation for a new model creates high demand though the product is in short supply. Examples include the original releases of the Mazda Miata, Dodge Viper, Nissan Xterra, the reintroduced Volkswagen Beetle, and the 2005 Mustang.
When sellers ask for more than list price, buyers deem it "unfair", “outrageous” and -- of course --price gouging. Now it's time to play the blame game. We can blame manufacturing for not producing enough vehicles to meet demand. We can blame marketing for creating too much interest in a product they couldn't supply. We can blame the greedy capitalists who are exploiting the citizens. Nobody seems to think to blame the use of a list price.
List prices are some of the best fiction ever written.
Should We Sell Over List?
Some routinely call the selling of a product at more than list price “gouging,” and consider it unethical and even immoral.
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environ
· STRATEGIC DEVELOPMENT. Enhancing Community Business (ECB) can assist organisations with all facets of strategic development including Strategic Planning, Operational Effectiveness (systems reviews and development—HR, Quality Management, Staff Surveys, Communication), expansion of services, infrastructure development, service and support modelling. Business Development, Risk Management, and Corporate Governance.· MANAGEMENT SUPPORT. ECB can provide expert support with Manager Mentoring and Coaching, Management Skills Audits, Management Practice Forums, Staff Performance Management Systems.· AGENCY RESOURCING. ECB can assist agencies with Full Service or Business Unit Reviews, Unit Costing and Benchmarking Agency Costs (internally and externally), and Analys
For most of us, we believe prices can only go down from list price. When buying a car, for example, nobody expects to pay "sticker". In fact, many car buyers believe that list price shouldn’t be the basis of pricing discussions at all. Instead, they focus on working from the dealer’s invoice price. How shocked these same buyers are when they’re asked to pay over sticker! This has happened when anticipation for a new model creates high demand though the product is in short supply. Examples include the original releases of the Mazda Miata, Dodge Viper, Nissan Xterra, the reintroduced Volkswagen Beetle, and the 2005 Mustang.
When sellers ask for more than list price, buyers deem it "unfair", “outrageous” and -- of course --price gouging. Now it's time to play the blame game. We can blame manufacturing for not producing enough vehicles to meet demand. We can blame marketing for creating too much interest in a product they couldn't supply. We can blame the greedy capitalists who are exploiting the citizens. Nobody seems to think to blame the use of a list price.
List prices are some of the best fiction ever written.
Should We Sell Over List?
Some routinely call the selling of a product at more than list price “gouging,” and consider it unethical and even immoral.
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environ
I meet a large number of executives who consider themselves as team players and believe they have the respect of their subordinates. With some individuals it is can be difficult to understand why they hold these beliefs when it is apparent there is significant conflict within their organisations coupled with high staff turnover rates and high staff absenteeism. Private discussions with members of staff can give the impression the boss is a monster who manipulates the staff in a cold and cynical manner.How can the opinions be so contradictory and polarised when describing the same person? It may be understandable that politicians will have both active supporters and active detractors but should this be expected with managers?Unfortunately some managers are so fo
When sellers ask for more than list price, buyers deem it "unfair", “outrageous” and -- of course --price gouging. Now it's time to play the blame game. We can blame manufacturing for not producing enough vehicles to meet demand. We can blame marketing for creating too much interest in a product they couldn't supply. We can blame the greedy capitalists who are exploiting the citizens. Nobody seems to think to blame the use of a list price.
List prices are some of the best fiction ever written.
Should We Sell Over List?
Some routinely call the selling of a product at more than list price “gouging,” and consider it unethical and even immoral.
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environ
When you’re hunting for accountancy audit jobs, you have approximately ten seconds to make a first impression. That’s about how long the average HR recruiter will look at your CV unless something on it catches their attention. In order to make it onto the interview list, you need a CV that will command attention for you in the first ten seconds. If you want a CV that will land in the contact list rather than the dustbin, there are some standard rules you should follow when writing a CV to apply for audit jobs.1. Follow standard formattingYour CV needs to accomplish three objectives: create a good first impression, detail your experience and qualifications, and get you an interview. If it accomplishes the first two, the third will follow. Keep i
Buyers feel gouged when it appears that sellers are taking advantage of the buyer’s condition with a commodity product. I’ll loosely define commodity as any product or service that has a fairly consistent price in most selling environments. When the buyer sees an inflated price for the commodity and has no other competitive alternatives due to the situation they're in, the buyer feels gouged.
For example, I would expect a hot dog and a Coke at most locations to be 4 or 5 US dollars. When I was watching the Atlanta Braves play baseball at Turner Field and got hungry, the hot dog and Coke I found cost closer to $10. To find any food that I considered reasonably priced, I would have to leave the stadium environment. I felt gouged.
As a boater, I routinely pay 30-40% more at the dock for a gallon of gas than I would when I take my car to the pumps. Same gas, different environment. I feel gouged.
Price gouging occurs when no alternatives are available for purchase. In our free market society, that rarely happens. When it does, we need to be especially careful. Where there is demand, there is usually -- but not always -- competition.
A Controversial Solution
An opportunistic sales force that I once worked with faced a pricing dilemma. Buyers in this industry routinely expected a 15-20% discount, making it nearly impossible to hold list price. The solution came to be known as “New York Pricing” -- invented by the New York district office -- which simply involved marking up list price by 15% before presenting it to the prospective buyer. After ardent negotiations, the buyer might receive their 15-20% discount, resulting in a sale at or near list price for company. Because headquarters couldn’t come up with a better solution, “New York Pricing” was widely practiced by the sales team although not officially endorsed by management.
Gouging is in the Eye of the Beholder
While we might like the market to set the price, we can’t all engage in an auction environment. At some point during a buyer-seller interaction, the seller is going to offer a price. This is perceived by the buyer as list price, and we expect to go down from there.
Price gouging is not about charging more than list price. It’s about the seller taking advantage of the environment to require people to pay more than the offering is worth. Selling over list price is fine if the market is willing to bid up the price despite the presence of alternatives. That's what happens with hot new cars. If the buyer believes they are getting value well in excess of the list price, both parties can feel good about the transaction.
© 2005 Paul Johnson. All rights reserved.
Note: This article is available for reprint at no charge. We only ask that you include our copyright notice in your reprint, along with the About the Author (byline) information we provide at the end of the article.
HTTP = HTML link (for blogs, profiles,phorums):
<a href="http://www.writeyou.net/article/29256/writeyou-How-Price-Gouging-Can-Hurt-Your-Business.html">How Price Gouging Can Hurt Your Business</a>
BB link (for phorums):
[url=http://www.writeyou.net/article/29256/writeyou-How-Price-Gouging-Can-Hurt-Your-Business.html]How Price Gouging Can Hurt Your Business[/url]
Related Articles:
What Makes a Good Marketing Consultant?
You'll Bring a Parade of Business to Your Door!
Building a Better Client Base: Five Easy Steps
Bookmark it:
|