I recently came across a small business column in USA Today by Steve Strauss, author of “The Small Business Bible,” that discussed using lower prices to get through the recession. His take was that selling on price can work sometimes (duh), but not in everything. Some excerpts from that column:
“So the question is not whether lowering your prices can work, sure it can, instead, the question is whether lowering prices can work for your business. …
“Lowering prices does not work for every business. … That said, the low price strategy often works for plenty of small businesses, especially in this type of economy. … I bet if you asked your customers what they want, today, many would say lower prices. So you better consider giving them that. ...
“And as you do, you have to be careful how you do it, and how much you do it. …
“One good way to start is choose a loss leader.”
He had more suggestions, but the loss-leader idea caught my attention. We all know that the inexpensive CDs/DVDs can get you into the Big-Box Store, the hope being you spend on other items while you’re there.
Are you toting and promoting? Are you doing that just with the newest items you have? If so, you might want to consider adding a loss leader to the tote bag; maybe on a personal-gear item like knives or flashlights, or a small screwdriver set.
The important thing is to get them on the truck — if they think they’ve already gotten a great deal, they may be more likely to look closer at some of your shelves.
You can read Strauss’ entire column on Professional Distributor’s Facebook page.
P.S. Recently, I made a number of calls on shops that subscribe to PD’s sister publication, Professional Tool & Equipment News. At each stop, I asked about the tool trucks that stopped there. Each had a problem with at least one of their distributors, from “stops infrequently” to “promises but never delivers” and more. Consider your weekly route: Take an extra minute or two to ask some of your customers if there is anything you could be doing better. Their feedback might surprise you.
LETTER TO THE EDITOR
I would like to congratulate Brian Gallagher for his accomplishments in the mobile tool business profession. I certainly know that any growth in business during these economic times takes great perseverance, and dedication. However, I feel that Mr. Gallagher should try to formulate an original business plan, and design his business name and logos on his own rather than ride the coattails of a major brand tool distributor.
I note that the truck pictured on the front page of the April 2009 edition of Professional Distributor magazine shows the stripe pattern and markings of a Cornwell Tools truck. I also note that the business name, or D.B.A. of “Ironman Tools” is a trademark registered by Cornwell Tools, to be used with permission by authorized Cornwell Distributors. If Brian Gallagher was truly an independent tool distributor, he would not be using the protected trademarks of Cornwell Tools to help his business to succeed. Pictured on page 18 of the same issue of PD magazine is Cornwell dealer Gordy Gill and his authorized Cornwell truck with striping and logos.
If Mr. Gallagher is going to continue in the business of selling tools from a tool truck, or several tool trucks, I feel that he might want to think of a more original independent business name and tool truck design.
Distributor explains his reasons for tiered mark-ups, and different strategies for how to keep and maintain customers.