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How much are you leaving on the table?

Over the years, NextGen has worked with hundreds of owners, some new and some well established. One of the first tasks is the setting of prices.  While most are content with Nextgen’s standard prices,  others are not or at least are not sure.  The principal reason is the presence of nearby competition.  They want to be price-competitive.

In this case, NextGen provides them with a method for systematically sampling items on competitor racks, and displays( in-store and, most recently, online).  Without exception, franchisee or independent, competitor prices are inconsistent relative to current retail.  This traces primarily to the use of a limited number of category-brand price brackets rendering some prices relatively high and some relatively low, and secondarily to the fact that significant properties of the items are ignored, e.g. composition (cashmere, leather, style… ).

Bottom line, it represents “ball park” pricing, and 1) lost sales associated with over-priced items, and 2)  lost revenue loss associated with under-priced items.
How much are you leaving on the table?

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How are Prices Best presented?

Most retail operations end item prices in  9 as prices ending in 9 (e.g. $2.99)  as appear smaller than their whole price counterpart, e.g. $3.00 one cent or one dollar higher (e.g. 4.00, 30.00)  and have been shown  to improve sales significantly.  This “charm” pricing strategy  has been shown to work with whole prices as well.  Items with prices ending in nine (9), e.g. $39 selling better than items with prices not ending in 9, e.g. $40 and even $34*.

On the other hand, “whole” prices with or without the decimals (.00), are  reported to convey the impression that the inventory is of a higher quality and to have a warmer, more neighborly feel.  In other words, whole prices send a message to consumers elevates a store’s image, with an eye to improved sales , and, of course, they make for simpler transactions.

Some retailers, J crew and Ralph Lauren for example, follow both strategies.  They end the price of sale items with .99, but use whole prices for their regular items in order not to “cheapen them.”

Retailers are also shying away from displaying the dollar ($) sign as part of the price.  Pricing specialists are finding that prices with the dollar sign can cause buyers to see an item as more expensive than it actually is.

NextGen recognizes the need for owners to display prices in keeping with their pricing strategy.  Price-It users are able to select the endings they wish to use as part of their Price-It setup.
* Poundstone, William, Priceless: The Myth of Fair Value (and How to Take Advantage of It) January, 2010, Hill and Wang.

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How to use Square for Consignment & Resale

Item information (brands, descriptions, prices, and sizes) along with consignor contact information is exported from NextGen’s  Square Buying Portal and imported  into Square.  Item sales and related consignor and seller costs/payments (cash or trade) are then managed within Square.

The Item information may also imported into Dymo for tag printing purposes.

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NextGen “Right” Resale Price Determinants

The most Frequently asked questions we hear from resale business owners considering the use of one of the NextGen pricing tools are “How does NextGen arrive at the Prices suggested?  Are they based on known retail prices and/or resale prices for like items (item type and brand)?  Is demand considered?  Is condition factored in?    All good & logical questions and “All of the Above” is NextGen’s short and ready answer.

Most of NextGen’s “Right Price” suggestions are statistically based on the sales experience of resale stores from coast to coast participating in the pricing system’s development and continued operation.

Retail prices are principally used as a check on the “right” resale prices so derived.  Retail prices serve as the basis for suggested resale prices only in the absence of reliable data on the category and brand in NextGen’s database.  In so doing, NextGen applies resale/retail multipliers specific to the subject category and brand level.  Some categories and brands hold their value better than others.  The same holds true in the case of “vintage” apparel.  While widely known, high-level brands tend to hold value, most do not.

Resale prices from online sources are used to derive “right” resale prices only in the absence of both online retail and resale prices.

As a rule, the range in prices found for categories with high-price designer labels are too wide to arrive at suggested prices.  The only choice is to price the individual item in question based on the retail or resale price of that item or close match found online.  NextGen’s efficacious [Checkit] tool is designed to do this.