The entire world over the prices of commodities from basic household necessities, to groceries, we are witnessing a drastic increase in prices. The purchasing power of many customers has gone down. Due to this, you as a wholesaler might think that lowering the prices of your goods and services that will help you stay in the market longer. If you will lower your costs, you are likely to attract many wholesale buyers and consumers who will buy your products since they can afford it.
However, the truth is, not all the goods with a lowered price tag will lead to increase in sales. If you reduce the costs too much, many customers are likely to view your product as not genuine or of low quality hence they will not purchase it.
As a wholesaler for some reason, you might think that lowering your prices will increase your sales, but the opposite is true. The client’s purchasing power is not just influenced by the price of a product but by certain factors and price is not at the top of those factors.
The following are some of the reasons why lowering your prices may not be such a great idea for a wholesaler.
Your Business Integrity Will Be Questioned
When you lower the prices of your wares, it leads your clients to question your business integrity. Consumers will not purchase goods from you if they do not trust you and this might be because your prices are not honest.
Lowering the prices of your commercial goods, it gives your wholesale buyers as well as consumers an impression that your products are not of high quality and the price you have set is not worth it. If your clients do not trust your products, you will be required to defend the prices that you have set for your goods because you know that your products are worth the price that you are asking for it.
To gain the confidence of your buyers, you will need to be enthusiastic about your product and prove to your customers beyond reasonable doubt that your goods are of high quality and the price you have set is reasonable.
Decreased Perception Value Of Your Product
Beware that every time a customer visits your store to purchase any goods from you, he will ask himself, “is it worth it?” The answer to this question will depend on the value of the goods or services and not the price.
Your customer will feel that by purchasing that product he will benefit from it, if the answer is yes, be sure that your client will buy your product. If the goods or services that you are offering is not worth what your customer is looking for even if your price is low, your client will not buy your product. With this in mind, do not be so much be concerned with the price of the goods or services that you are offering rather focus on the quality of the product.
In place of lowering the price of your goods and services, establish the value of the product which when your customer envisions the benefits he is likely to get and the price will not be a factor anymore.
Low Prices Will Not Allow Your Business To Stand Out
Do you think that lowering your prices will make your warehouse prominent in the business world? The truth is, it makes you look just like your competitors! Every other wholesaler is thinking the same way as you are trying.
The truth is the price of the goods and services is the least differentiator factor in wholesale businesses. To lower prices, is not the only way to make your business stand out from the pack you need to offer something more attractive than price. Low prices are a sell out for your wholesale business negatively.
The sale in your warehouse is not determined by the price of your goods. The number of customers rather determines that you get in your store. Hence when you are focusing all your energy on lowering the prices of your products will only lead to distracting from focusing on what matters to your business – customers.
Every move you make in your warehouse should be calculated to increase your interaction with your clients to help you understand how well to improve your goods and services and to discover their motivation in buying your products and services again.
Customers are looking for goods and services that will best meet their needs, and for this reason, most clients understand that you cannot have a high-quality product at a throwaway price.
Loss Of Continued Business
When a client buys a product, he would like to feel confident that the product they have purchased is a true value for the money. When you sell your products at a low price, the customer will start feeling that may they could have bargained even further to lower the prices even further. This will lead to a buyer’s remorse.
Even when you feel that you have saved your consumer some money by selling them goods at a lower price, there is a possibility your customer will feel that you cheated on the price for the value of the product. When your client feels cheated for their money, there are very high chances that they will not return to your warehouse again, and that is a significant loss to your business.
Things to Remember
When you shift your focus from what matters the most to the progress of your business – the customers – to things that do not matter, you are likely to make your business fail. What you should do now is focus all your energies and sale presentation to what is important, customer, value and uniqueness of your product.