The Blogging Nurseryman by Trey Pitsenberger

Sell me your product at a fair price!

Was sent a link to an article titled “Is Groupon Ruining Retail?”. Yes, it’s that internet coupon service that is all the rage, and a frequent topic here.  My feelings about the service are clear. The person who sent me the link works for a wholesale nursery that is feeling the pinch, as the large wholesale companies dump their product on the box stores and other garden centers.  This has the effect of lowering prices to the point there is little or no profit in selling them. While at first blush the customer feels they are reaping the benefit of this, the end result is it is going to force more small and medium sized businesses out of business.

Now inflation is rearing it’s head. You have seen food and gas prices rising. That cost has to be either passed on to the customer, or absorbed by the business. With the customer already feeling the pinch most businesses are loathe to raise prices, and possibly scare off the customer. So businesses eat the extra cost and and make less money. The problem is most of these businesses are barely hanging on, and the increased costs mean’s many will go under. Less choice for the customer.

Now on top of this we have Groupon which only encourages the whole, “price is the only factor” mentality. The customer thinks they are getting a great deal, yet in the long run they are actually contributing to the whole downward spiral that many small businesses find themselves in. The idea that you will attract a few of these coupon shoppers to become loyal customers is just a false hope. I don’t buy it, and it seems a lot more businesses are starting to see it that way. The New York Times article is written by a small business owner that tried the service and finds it less that satisfactory. I love the highest rated comment out of 115 comments as of this morning. The commenter says, “I hate coupons. Sell me your product at a fair price to begin with.” Bravo!

What does that mean? Sell  me your product at a fair price. These coupon deals, massive 50 to 75% off sales, and other gimmicks only encourage the idea that we are somehow making too much money. The average person does not work for themselves. They really have no idea what it cost’s to run a business, and therefore assume we are pricing our products at a “unfair” price? Unfair to whom? The cash strapped shopper, or the barely hanging on business? As more people leave the corporate workforce and try their hands at running their own business, this will change.

There is nothing wrong with having a sale or discount offered, but why pay Groupon to do it for you? Offer your loyal, regular customers a special now and then. Let the good word spread through your’s and the customers social media efforts. These people are already interested in what you have, and are the ones most likely to spread the word.  What a novel, yet simple concept. Offer the customer a fair price regularly for stuff they want. Sure you might not get that rush of people through the door that Groupon would provide, but the people that do come through your door will be more likely to return, and pay a fair price for what you offer. And on top of it you get to stay in business!

 

17. March 2011 by Trey Pitsenberger
Categories: | Tags: business, garden, gardening, Groupon, nursery, sale | 5 comments