One of the most important aspects of owning a c-store is deciding product pricing to make the most profit. Learning to develop your pricing strategies, knowing what to avoid, and understanding the importance of knowing your competition’s prices helps you be informed and make the best pricing decisions. The following information will give you a foundation to better understand your customers, your c-store, and the art of product pricing.
There are many ways to help you find the balance between being fair and gaining profit. The first step in keeping your product pricing:
High/Low Pricing - Using temporary price reductions to advertise products and draw traffic to the store.
Manufacturer Suggested Pricing - Using the price that the supplier of a product recommends. This is great for new owners or when introducing new products into the c-store.
Promotional Pricing - Having a special sale can help bring in customers who might usually purchase a specific product elsewhere but will visit your store to save.
Mobile App/Loyalty Program - Use these valuable services to provide exclusive sales and coupons for certain products or to encourage consumer behavior.
Flat Pricing - Price products with a flat $_.00 instead of $_.99 prices. Customers are more comfortable with flat pricing and will not feel like they're being "tricked" into spending money.
Understanding these pricing concepts and strategies is a great way to better ensure you're pricing your products correctly. The goal is always to maximize profit and keep customers happy. Be willing to make adjustments and try new strategies over time to keep accomplishing your goal.
Simple Things to Avoid
There are a few pricing tactics and behaviors you will always want to avoid. These common mistakes could drive customers away.
Price Gouging: Even when a product is in high demand or expensive to stock, you should always keep prices reasonable and fair to maintain customer satisfaction.
Not Honoring Marked Prices: It Is always better to satisfy the customer, apologize for the error, and correct any other mislabeled products.
No Price Tags: Avoid confusing customers and causing them not to purchase at all.
Selling Expired Items: It may be tempting to discount expired items in hopes that they sell, but this is both dangerous and unfair to customers.
Inconsistent or High Pricing: Make sure that your store pricing is consistent with market standards and value is important to keeping your customers satisfied.
Competitor Pricing and You
When dealing with competitor pricing you may be tempted to raise or lower prices to match other c-stores in your area. It is important to analyze your own store sales and be informed when making these types of changes. Make sure you know the value of your products so you are not hurting your own business by trying to match competitor efforts. Keep in mind that other c-stores may be in a different situation and even have exclusive deals with suppliers that allow them to have a lower price. If you have a product that is selling consistently, do not just lower the price because the competition has. Be smart and use your own sales to your advantage. You may also have a different target shopper for your store than another c-store in your area. Price items based on your customers and do not always let competitors dictate how much profit you are making.
Overall, pricing is a variety of strategies that you must learn about and decide which ones will work best for your c-store. It is always smart to know what you are paying for your items and what they are worth. If you feel overwhelmed stick to manufacturer suggested pricing and slowly start implementing different strategies. By doing this and avoiding the common mistakes listed above you are more likely to find a profitable balance and guarantee your store's longevity.