Tuesday, March 15, 2011

The Art of Balance

One of the things I've had to learn as a vendor is the art of balance in pricing.  And this has been a long lesson for me to learn.  There's a dealer here in town who has his own shop.  It's a converted house, and it is just packed with stuff.  Seven or eight other vendors rent space from him, and you can find most anything you want there.  One of his rules for his vendors is that nothing is priced more than $9.99.  (He makes an exception for furniture and other large or particularly special items, but the bulk of the booth has to be ten bucks or less.)

He does a bang up business from this.  People buy more when they are there and tend to return more often because of the pricing.  When I opened my booth, I took him as a model.  Since I get my stuff primarily from yard sales, I don't pay more than a dollar or two for items, usually less than a buck.  That gives me plenty of wiggle room for things like rent and commission even with a lower price scale.  When you're dealing with flea market junk in an indoor setting, there is a limit to how much people will pay for stuff.  I was figuring that with more unusual and unique items and a more modest pricing scale, I'd make up volume and repeats what I might lose for lower prices.

Thing is, I took it too far to one extreme.  I spent most of my first year in business clustered around the low end of that scale.  The bulk of the booth was actually 1.99 or less, with a few items in the 1.99-2.99 range, and very few above that.  When I would price an item in the 3.99 or up range, I'd get nervous that it would never sell.  So, I never did that much.

What I got out of the deal was strong, steady sales that pretty much stayed at one level for me.  I was doing okay.  I'd get a check every month, and it would be a larger check than some others around me.  But, I pretty quickly hit a plateau.  What I didn't realize was that you could build a strong base of 2.99 or less item sales, but you can't really grow on that.

I made a couple of really cool buys and acquisitions last year of stuff that I really couldn't sell at that low end of the scale.  It wasn't a real conscious, planned thing.  It just kind of happened.  In my mind, I was kind of afraid that they would just collect dust because I had to price them higher, but I figured my other items could support them for a month or two.  To my surprise, they sold pretty steadily.  And, then I noticed what was happening to my sales.

The base was still there, but these mid-range items were building on it and causing sales to grow day by day and month by month.  Goals I thought I would never make got made and passed.  I finally had a fifty dollar day.  Then a hundred dollar day.  Then a five hundred dollar month.

I haven't abandoned my lower end base, by any means, but I've learned to supplement it.  By balancing pricing throughout the range I want, I'm achieving much more sales-wise than I thought I ever would.  It was this sales growth that gave me the push to expand last month.  Now, I've got more room to feed some higher-priced articles into the space.

I've even broken that 9.99 ceiling every now and then, although I have to admit, it still makes me really nervous to do that.  Right now, I have one of the most expensive items I have ever had in the booth.  I'll be on pins and needles until it sells.  Really.

But, I'll be doing the great big old happy dance when it does, for sure.  And the sales email for that day will show that one big sale resting on a base of 1.99 or less sales.  Exactly the way it should be.

2 comments:

Mary-Jo said...

I love your thoughts! they are exactly what I'm thinking- usually when I'm trying to sleep... :)
can't wait to hear the BIG item sold!!

EM said...

That's when a lot of this comes to me too, Mary-Jo, when I'm trying to get to sleep.