e-m4i1 from filepro with attachment

[GCC Consulting]

> -----Original Message-----
> From: 
> filepro-list-bounces+gccconsulting=comcast.net at lists.celestial
> .com 
> [mailto:filepro-list-bounces+gccconsulting=comcast.net at lists.c
> elestial.com] On Behalf Of Kenneth Brody
> Sent: Thursday, June 29, 2006 12:56 PM
> To: filepro-list at lists.celestial.com
> Subject: RE: e-m4i1 from filepro with attachment
> 
> Quoting GCC Consulting (Thu, 29 Jun 2006 12:25:29 -0400):
> [...]
> > I'll relate a true marketing story about pricing told to me in a 
> > marketing class when I was in college(during the dark ages).
> >
> > Just after the Koren war, FM radios were coming to market.  I don't 
> > recall which company at the time brought out the first am/fm radio 
> > with a price of $25.00.  No remember this is about 1953 or 54.  The 
> > radio did not sell. They took back all of the radios.  They the 
> > repackaged them, waited a month or two, and resold them as a new 
> > product to retail for $45.00.  At this price they sold.
> [...]
> 
> That's for people who don't read the fine print on the "NEW 
> and IMPROVED"
> stickers, and don't see the entire "NEW packaging and 
> IMPROVED profits for us" message.  :-)
> 
> My father-in-law learned the same thing many years ago.  He 
> had been doing heating and air conditioning maintenance and 
> installation in northern Westchester County for years.  When 
> he tried to expand to southern Westchester, he couldn't get 
> any jobs.  Eventually, he found out that his bids were too 
> low.  He was charging northern county prices in the more 
> expensive southern county areas, and everyone thought that 
> with such low bids he couldn't be any good.
> 
Experience from my other life 

I was a ladies hosiery manufacturer and developed the first maternity
pantyhose.  I was working with Lord & Taylor on the item.  My cost on the
item was $12.00 per dozen and I quoted them $18.00 per dozen.  The buyer
told me should could not buy the item as it was too cheap.  They wanted a
$4.00 a pair item and needed to pay 24.00/doz (50% markup).  Even though the
item was available from no one else and I advised her to make the extra
profit, she turned me down.

I waited one week and called her back.  I told her that my brother had
missed priced the item and I did need to get $24.00/doz and since I was
quoting net prices and she bought on 8/10 terms (this is an 8% discount if
the invoice is paid in 10 days - retailers took the discount no matter when
they paid), the price would be $26.10.  This made her very happy.  Me
too!!!!

I offered to supply her with spinner racks for all of the store free with a
purchase of 4 dozen/per store or more.  These cost me 2.25 each and held 4
dozen.  

So, we set up a accrual of $6.00 per dozen for advertising and other
expenses.  Priced the item on our books at 18.00.

Now the interesting thing, the national department stores were selling this
item at $4.00 and Woolworth, in different packaging, was selling it $2.97.
They paid us the $18.00 price.  Same product at either $2.97 or $4.00.

I had one item, in 3 different packages.  Macy's NYC carried 2 of the
branded packages selling the item at $5.00 in one and $4.00 in another. In
this case I manufactured and packaged for the 2 different branded mills.
The same item across the street at Woolworth sold, that's right, $2.97.
Same product 3 different retails.

Richard Kreiss
GCC Consulting
   
This was an extremely profitable item for us for a couple of years.