What Do Retailers And Hookers Do After They've Discounted It All?

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In today’s New York Times even liquidators are wondering what they can offer. “‘We’re going to have to be extremely aggressive in terms of our discounting because we’re going to have to beat every other retailer that’s already been offering 70, 80 percent off,’ said Jim Schaye, chief executive of Hudson Capital Partners, which has run liquidation sales for bankrupt retailers like Linens ’n Things, Mervyns and Whitehall Jewelers.

Even the Verizon stores are making customers think they are going out of business with these signs posted in Manhattan.  When all you can offer is cheaper, cheaper, cheaper, you’re no better than Vegas hookers.  And once you’ve given it all away, you’re still out a lot of profit.

To prove the point, look at this article from the Las Vegas Sun which begins, “The pleasure of Stacie’s company used to cost $450 an hour, but no longer. Her clients were capped at 35 and older; today she’s taking almost anyone. Sex acts once off the menu are suddenly back on — recession specials, served with a side of shrugging compromise. If she doesn’t do more for less, Stacie says, another prostitute will. And her weekly income is still down by half.”

A business owner can find sage wisdom later on in the article, “When financial panic intrudes on the prostitution world, escorts often lower their rates in response, according to Amanda Brooks, author of the Internet Escorts Handbook. That’s a mistake, she says, not just because established higher-end prostitutes are more immune to economic fluctuations, but because lowering rates changes the kind of clientele call girls attract. Brooks added, “they don’t understand that higher rates mean higher quality clients.”

Look for a lot of armchair quarterbacks telling all of us to discount the hell out of merch in 2009.  It will only lead to even worse headaches for retailers reeling from the recession.  Charging less than you paid is a quickline to the breadline.  Again, you have to offer something besides, price, price, price.

You Can Compete

Bob Phibbs, The Retail Doctor, has helped hundreds of small and medium-sized businesses in every major industry, including hospitality, manufacturing, service, restaurant and retail.  You Can Compete: Double Sales Without Discounting is the culmination of three decades of retail work highlighting a proven method every business in any market can improve the bottom line and compete successfully.