Set Your Own Prices

Since margin management is always on the mind of Art Freedman, here’s another of his messages from our Making Money Is Not Illegal, Immoral or Fattening:
     “I don’t fully understand why there are retailers who do not want to take the margin management steps to make more money. There are retailers who won’t do anything more than double the supplier’s cost of the item to set the price at retail. Are you among them? If so, I would tell you cost is only a guide, that’s all. What is most important to you is recognizing what value the customer sees in the item, the service that goes along with the item, the convenience you offer to the customer, and all the rest. What you pay the supplier for the item goes into it. But do not be afraid to mark something up to more than double the cost if that is what customers will pay because that’s the value they set on having the item.
     “I have retailers telling me it is not their job to set prices, it’s the supplier’s job. I have retailers who say they don’t want to take on margin management because they don’t have the time or the right people to do it for them. I say, do not allow somebody else to impact your success to that degree. I say to those retailers, ‘Whose job is it to prevent you from going out of business?’ I know the government might subsidize the airlines, bail out the banks, and keep the auto industry alive. But do you think that if you or I have big financial problems in our businesses, the government is going to rescue us?”