Who Has The Lowest Prices? Odds Are It’s Not You.

by Paul Schlossberg
Posted On: 2/25/2019

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  Paul Schlossberg
Have you ever been told that your product prices are too high? Maybe it was said by one of the client contacts you deal with at your sites. Perhaps it was a comment or complaint from one of the shoppers who (hopefully) make purchases from your vending machines or micromarkets. Was it mentioned to you when you were pitching for a new account?

This is no surprise for veteran operators. It really doesn't matter where or when the subject was raised. Typically, people feel that vending prices are higher versus convenience stores and other retail venues. It is generally true for reasons we all understand.

1.  Sales tax, when applicable, is included in our prices. No matter how many times we explain it, no one ever remembers it.

2.  We have a higher relative investment to cover because our stores serve proportionately fewer people compared to other retail outlets.

3.  Price-off promotions are very common in convenience stores, chain drug stores, dollar stores and other retailers. Those discounted price points are a challenge for us because other stores aggressively promote and merchandise "cents-off" or "special prices." You'll see it in their weekly flyers and featured in-store with displays and signage. It is not, however, a common practice for our industry, and, in my opinion, that's a good thing. We should strictly avoid retail price discounting. There are other far more effective promotional techniques we can use. But there is one exception. You can and should lower the price to clear out close-to-code-date merchandise.

Should you be concerned that your prices are higher (or perceived as being higher)? Maybe yes! Maybe not! Here is what you should do:

1.  Conduct periodic price surveys at convenience stores and other retail venues in your area. Focus this effort on stores close to your best accounts. When you're asked about pricing, you'll be able to respond with facts, not feelings.

2.  Run promotions (not price-off) on a planned schedule. It shows your shoppers that you're sensitive to delivering value on a regular basis.

3.  Be consistent in maintaining your equipment in good working order. (We know you do that, but keep it up every day),

4.  Minimize out-of-stocks. If your prices become an issue and out-of-stocks become an issue, you might be headed for trouble.

Pay attention to pricing. It is an important building block in selling more stuff.





» Paul Schlossberg is president of D/FW Consulting, working with clients to merchandise and market products in impulse-intense selling environments, such as vending, onsite foodservice and convenience stores. Based in the Austin, TX, area, he can be reached at Paul@DFWConsulting.net or (972) 877-2972 or www.DFWConsulting.net.