Should I Discount My Merchandise?

Many small businesses are feeling the pinch of a struggling economy. If you run a small business, you know exactly what I’m talking about. You may feel like you are in a panic to make some sales and that something drastic should be done. You may not be completely wrong. Boosting your sales is important in times where you just aren’t seeing much income. Small businesses can especially be under a lot of pressure to get things moving because they personally own and depend on the income of the business. But does boosting your sales really mean that you should have big sales and offer big discounts? Not necessarily. In fact, discounting can actually hurt your business under some circumstances.

Offering discounts may seem tempting because you know that it will get people into the store. They will come, be happy that they’re getting a discount, and buy something. However, do you think that they’ll be back when you’re not having a sale? Probably not. Listen to your regulars chatting as they shop. Chances are you’ll hear them saying things like, “I like this, I can’t wait for it to go on sale.” Or you’ll hear them say, “I know that they price these so high so that they can still make a profit when they go on sale.” How do you think that this impacts your store image?

Customers are savvier than you think. Take buying a car, for example. Are you going to go in and pay sticker price when you know that there’s a holiday right around the corner? No way! Don’t let your business fall into the trap of always having to offer discounts to get sales. You are probably asking yourself now, “How do I get my sales up without ever having a sale?” Good question.

Now is the time to ask yourself why someone would want to come and spend money at your business. Why do people normally spend more on one thing than another, when the products are almost identical? The answer is brand. People associate brands with quality. They need to trust your brand name in order to justify spending more money with you when your prices are at a normal level. They don’t need to wait for a sale if they feel like your business is being honest with you about their pricing in the beginning. Having a sale can hurt your store image and turn off your regular customers because they feel like they’ve been tricked into paying full price in the past.

Come up with other ways to sell your brand, improve your product or services, and save money on running the business to increase your profits. Work closely with a financial planner to figure out where you can cut cost and maximize your deductions without lowering your prices. Work with a specialist that can teach you how to improve your store image or product quality at the same time. Use cheaper services and less staff whenever possible. For example, you can use mobile concierge services while on business trips, instead of depending on expensive directory assistance calls or needing to hire a personal assistant to keep track of your reservations, restaurant recommendations, weather, and flight details. Sometimes tightening your belt a little financially can really pay off and help you to work on increasing your quality and business image without discounting.

About the Author: Joe Smith is a Marketing Associate of OnCall, a leading online source of mobile concierge services that goes above and beyond traditional directory assistance. Get international personalized assistance with phone direcory information, turn by turn directions, movie times, stock quotes, sports scores, and more at http://www.askoncall.com.