Truck Parts and Service | Heavy Duty Trucking, Aftermarket, Service Info
Issue link: http://read.dmtmag.com/i/848272
Making sure your customer needs and your customer's ability to buy are in line with one another is key to long-term success. Pricing products correctly can en- hance how much you sell. Get your pric- ing strategy wrong and you may create problems that your business may never be able to overcome. There are several different types of pricing strategies for the aftermarket to look at, especially when it comes to pric- ing items that are placed on sale or listed as promotional items. There's no one proven-to-be-true, formula-based approach that suits all types of products, businesses or markets, but fi nding the right formula for your business is essential. Pricing a product to be a sale or pro- motional item usually involves considering certain key factors, including pinpointing your target customer, tracking how much competitors are charging, and knowing what inventory you have in stock. Over and underpricing products can create consequences. Underpricing leaves no room to make a profi t, while overpricing can create an overfl ow of unwanted stock. But, that inventory can lead to great sales opportunities as well. Rolando Martin, marketing manager at River City Truck Parts says the com- pany's monthly sales promotion is based on what items they have in excess. "We have found that working through our surplus inventory provides us with great opportunities for our customers," Martin says. "Our monthly promotions allow us to keep moving inventory that we have an excess supply of and it provides good pricing points for customers." Pricing sales products for too low a cost can have a negative impact on an aftermarket supplier's bottom line, so be careful when setting initial price points. On the fl ip side, overpricing a product can be just as detrimental since the buyer is always going to be looking at your competitor's pricing. "Accurately pricing your product is critical at any point," says Laura Wil- son, a business consultant and faculty member at the University of North Ala- bama. "Many businesses mistakenly underprice their products attempting to convince the consumer that their product is the least expensive alternative hoping to drive up volume; but more often than not it is simply perceived as 'cheap." She says most consumers want to feel they are getting their "money's worth" and most are unwilling to purchase from a seller they believe to have less value. Businesses also need to be very careful they are fully covering their costs when pricing products, especially promotional and sales items. "Reducing prices to the point where you are giving away the product is not usually the best long-term solution," Wilson says. There are many methods available to determine the right price, or which particular products should be placed as a promotional item. Mike Lerach, parts sales manager at Blaine Brothers, says that company has to consider many aspects when determining which parts are needed to be listed at a sales or promotional price. "There is a lot of different things to look at," Lerach says. Many are based on a company's geo- graphical location. "A lot of the items that we feature are seasonal. For example, we will be getting our winter products such as dryers, tire chains, chemicals, things such as that, ready soon." Lerach says the goal is to have winter seasonal promotions in place by the be- ginning of the fourth quarter each year. Preparing for seasonal promotions holds true for summer items like air con- ditioners, Freon and brakes as well. "There are areas in the Midwest where heavy equipment can't run until March because of the frozen ground during the winter, so we run our brake promotions and other items that those 23 Sales & Marketing W W W . T R U C K P A R T S A N D S E R V I C E . C O M J u l y 2 0 1 7 | T R U C K P A R T S & S E R V I C E O ne of the secrets to business success is pricing your products properly. Our monthly promotions allow us to keep moving inventory that we have an excess supply of and it provides good pricing points for customers. – Rolando Martin, marketing manager at River City Truck Parts