Black Friday was what we expected: lots of stuff got sold. We witnessed the crowds, the frenzy and even the frightening event at Walmart: crazed and desperate shoppers pushing each other to go after the bargains.
Black Friday might seem like a blessing to business owners, but any dummy can give stuff away. It takes a good salesperson and a smart business owner to make money when the whole world is saying: give it to me cheaper!
If we want to make it in this economy we have to learn to "lean out." That's a skiing term used mainly when skiing moguls. In order to maintain your balance you need to learn to lean your body out away from the mountain, into the unknown. One of the reasons I never got to be a good skier was because I had such a hard time trying to "lean out." I could get into it sometimes but most of the time it scared me. But like skiing, finding the balance of your business requires leaning out into the unknown.
Where you've been in the past will not hold the answers to your business in the future. The place where you have never been will hold new ideas and possibilities.
Considering that, when concentrating on your retail profits:
- Try not to drop prices. The influx of cash will make you think you're making money, but cash flow isn't profit – it's just cash. It won't keep you in business.
- Lowering your prices will take away value from your products. You'll begin to think that your products aren't worth it.
- The only business out there will come from the customer with money. This customer is the one that will survive and send you referrals.
- The cheapest price in town will not satisfy the better customer. The better customer is not looking for commodities.
- Can't get rid of it? Raise the prices of the "dogs." Leave the prices there for a few months and then put them on sale.
Remember, you're planning not only for today's customers, but for future customers.