In Making Money Is Not Illegal, Immoral, or Fattening, my coauthor Art Freedman talks about the profit opportunities when carrying and selling what he calls Blind items and Non-Comparable items:
"Blind items are those SKUs for which few of your customers know the competitors’ prices for the items. Non-Comparables are those for which, as far as your customer knows, you are the only one who carries the item, class, or department. Niches, an example of these, provide big opportunities to turn a profit."
Art goes on to say, "In many cases, the value to the customer of a Blind or Non-Comparable item is set by what the item can do for the customer, not by what the competition might be charging." Just to prove that Art and I aren't the only ones who believe this and to show that this business approach is time-tested, we quote British social thinker John Ruskin, who wrote in 1884, "A thing is worth precisely what it can do for you, not what you choose to pay for it."
But not all items you sell come from the Blind or Non-Comparable buckets. The other two categories are Sensitive and Competitive. With Sensitive items, you should either be the market leader on price or be within 10% of the market leader's price in your market area. With Competitive items, be within 15%, unless you've decided to be the market leader yourself.
Assigning each item to the right bucket takes time and experience. But when you do it, chances are you'll be surprised at how many items are Blind or Non-Comparable, and so give you the opportunity to tweak profit margins up to make more money. And remind yourself at least once each day that making money is not illegal, immoral, or fattening!
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