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Common-Sense-Business-Solutions

Calling on your help!

  • Has the internet flattened prices as predicted?
  • Has the internet created opportunities for your business to find higher priced markets further afield?
  • Is posting prices on your website a good thing or not?
  • Are price aggregators like Travelocity a good thing for you as a consumer? Or for you as a business?

We have not seen the full power of the internet deployed yet, but since its inception and use as a business tool, pundits have predicted that it would be a juggernaut that flattens prices and margins everywhere; that it would homogenize all similar businesses, lowering margins and making it a buyers’ paradise. The cynics among us fear that small businesses will disappear and be replaced by huge faceless conglomerates selling “average” goods and services.

But has it happened? My guess is that for some it has already happened to them. On the other hand, for most businesses, they enjoy the internet as a source of suppliers. For catalogue driven industries, the internet is a boon with the ability to change prices on the fly and change pictures and offerings at will with almost no cost. The internet has not been kind to printers.

For some, the internet has worked in the opposite way. A specialty book shop in England has found a niche selling rare and high priced books at better margins because its marketplace is now the world and the bidding wars more vigorous.

And in India, the use of cell phones by fishermen (taking a liberty here to include phones with the internet) has allowed them to check the best market prices in several ports before they land their catch.

The oil and gas companies post their requests for price and quote on websites, but only the pre-qualified can bid.

Some companies, like Home Depot, post their prices on the web. They deal in commodities that are easily compared. One Black and Decker sander is like another, right? Does the consumer benefit? Does this encourage low price providers or are they able better to capitalize on impulse buying in their huge brick and mortar stores?

If you post your prices, the pricing robots will find you. We have all researched the cost of a flight or hotel for a vacation. Doing it one by one is tedious – there is a lot of choice – and when you fully give in and buy, your poolside chair is always beside someone who paid less or got a room with a view. So the aggregators like Travelocity should be helping you as a consumer. But if you are a hotel owner, has it helped to fill otherwise vacant rooms or has it depressed prices?

For those buyers for whom free is too expensive, the internet must be a boon. For the majority of us looking for that right combination of value and price, can the internet replace a knowledgeable salesperson? Are there lessons to be learned from the auto industry? Their websites are the second port of call after a few test drives. Their sites give the value but the price is negotiated in the showroom with a salesperson.

Finally, if you have been reading my columns, you will know that I will always push to get value on the table before mentioning price. This is not possible with a pricing bot. They read numbers and not reviews. So you still have homework to do unless you take a chance like Captain Obvious does.

The purpose of today's article is to encourage a response from as many business owners as possible. This information will be compiled for the benefit of Software Advice which company publishes primary research on pricing and software. This link will take you to a research piece on retail pricing. http://www.softwareadvice.com/retail/industryview/pricing-strategies-report-2015/

 

Andrew Gregson published his book Pricing Strategies for Small Business in 2008. The book is now available in Europe, India, Russia and the United States. Andrew holds a Master’s degree in Economics from the London School of Economics. He writes a column for Castanet.net, and is a guest speaker to industry and trade groups. Andrew has owned businesses and franchises; worked as a business consultant, and now works in finance in Kelowna, British Columbia, wine country. You can contact Andrew through his website www.pricingstrategies.ca.



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About the Author

Andrew Gregson, BA, MA, M.Sc. (Econ), holds a Master's Degree in Economics from the London School of Economics.

Andrew's experience working with an international business consultancy and being a business owner for 15 years was the impetus for his book "Pricing Strategies for Small Businesses". He brings his expertise in finance, pricing and debt restructuring to the table to help struggling manufacturing and service companies to return to profitability. This has helped companies to rebuild value and often to sell at much higher dollar values.

Andrew has contributed to trade journals, "Spark" on CBC National Radio and has been a guest speaker at business networking groups, colleges, universities on his topics of expertise - pricing, exit plans and debt. He is also a frequent contributor to blogs and online postings for business help.

Andrew is currently the President, Board Of Directors intent Financial Inc., his role is overseeing intent Financial Inc., Intent Investment Corporation and other related ventures.

 

Website link:  www.intentfinancials.com

Contact e-mail address:   [email protected]



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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