Is Price Matching a Good Idea For Our Store?
Q: Should we be price matching? We're a shoe store; Nordstrom's doing it.
A: You could do that but at some point you're really letting your pricing structure be determined by somebody else. If a competitor owns their building and all they have to worry about is paying for inventory versus you who may be having a high rent district and you have to go through and carry a lot of inventory to try and satisfy your customers, so your cash flow is very low, I don't think you can support that as well.
At the end of the day price matching is a loser's limp, sorry. If you're going to sell your damn clothes, sell your damn clothes. If it's 100 bucks, sell it for 100 bucks. Obviously I'm not talking about clearance items or limited quantities you have on your promotions.
But here's the little thing that most independents won't really address when it comes to their item pricing .
You really don't believe it's worth 100 bucks. You don't. You buy it at cost and then you sell it and you get a great deal and some poor person over here is gonna pay full retail. You think, I'd never pay full retail.
And that's the danger for most smaller retailers, is either you don't believe in the product or your store associate doesn't believe it's worth the price. And so price matching is a loser's limp.
But you know what, if you paid 50 bucks for an item and some other company has it on sale for, I don't know, 50 bucks and yours is priced at 100 and you match it at 50, why did you even carry it? In fact, with a lowest price guarantee, your shoppers will cherry pick your best items. You're losing money because it cost you money to stock it and to ship it. So price matching discounts I think is a slippery slope.
Again you are all big boys and girls, you can decide whatever you want. I'm just saying at the end of the day is it worth getting that new merchandise out the door when you make absolutely nothing on it? I say no because you'll have less to spend on training your associates, less to spend on creating exceptional customer service, and possibly lose your place as an authorized dealer of your name brand merchandise. Let me tell you a story about price matching.
I used to sell cowboy clothes, we've had that discussion many times.
I'll never forget this guy comes into my shop, he's looking at a pair of $300 boots, lizard skin boots. And he says after we get them on and they fit right and he says, "Oh, well, you know, the place up the street has them at an advertised price of $199. Do you have a price match guarantee?" And I said, 'No." And he asked, "Why not?" And I replied, "You know what, if I didn't have them, they'd be free. But I do have them, in your size, why don't you put them on and wear them out?" And he bought them for 300 bucks.
If your goal is to sell the merch, sell the damn merch. But don't give me a loser's limp like, "We had to do this to compete with an online retailer or a competitor's website." You don't have to do anything but offer a fair price in your retail stores.
But you do have to believe in yourself and believe in your margins, believe in your profit, and believe in your own competitive prices, that's really what counts. Then when your shoppers purchase your goods, you won't be tempted to give someone a discount just because another retailer is cheaper.
See also, Here's How To Raise Your Prices