foxsable

So which business is doing well despite these trying financial times?  Wal-mart.  And why are they doing well?  They are doing well because they sell for less than the average business.  This is because they have realized, long ago, that you can sell more products by charging less.  Take this example:

I buy shirts for 5$.  I want to make a profit, so I sell shirts for $10.

Johnny down the street also gets shirts for $5, but he sells them for $9.  I have a better name for my business, and I know people will come to buy my shirts anyway, so I remain a shirt seller for $10.  Now on these tough economic times, i could take my better shirt and sell it for $9, or I could build value in my product.  Better yet, I can do both.

If people already believe that my product is superior, and I sell it for the same price as my competitor, I make more money.  Now I make more money each individual product I sell, but overall my profits will increase.

These are what companies need to do.  Sales are short lived;  value is forever.  If these companies simply lower their prices, while still commiting to the same quality, they will sell more products which will generally increase their sales income.

Trackback URI | Comments RSS