The pinnacle

Discounts

Once you offer a discount, people expect it every time. Discounting lowers your profit and diminishes the brand. Rather than discounting you can try offering something free with a purchase, something that costs next to nothing but has value to a customer. Restaurants give out recipe cards to diners for example, rather than a free drink. Find something that will not lower the money taken at the till. Better presentation, better pictures of your products will make them seem much more appealing. A small amount of effort goes a long way. Items sent to auctions have fetched dramatically higher prices simply for being shown off in their best light.

When you have confidence in what you are providing, you avoid being a busy fool trading goods at pitifully low margins. Cheap, cheap, cheap is not everything. Some people do not mind paying more if what they are getting is good value. People often make choices based upon cost, but quality counts too. The advantage of having a better product though is wasted unless the customers are aware of the difference between what you are selling and that of the competition. Highlight the qualities and advantages of what you are promoting. Intelligent people reduce the price by 10 percent. Sales may go up, but to make the same profit they may have to sell 25 percent more. Clear stuff that is hanging around, absolutely, but remember turnover is easy without profit.

Poor cash flow and providing too much credit can undermine a good business. Some businesses pay full time staff to do nothing other than spend all day collecting monies owed to them. Some people will owe you money and won’t buy for a while. They use other suppliers as they don’t wish to settle the account. You can end up losing both the customer and the cash. Big businesses have been built on foundations of near zero credit. You may grow a little slower by refusing 30 days, 60 days accounts, but if your money runs out, your business is dead. Insisting on payment on delivery, even at slightly lower margins, is a wonderful formula.