Prices go up....on everything.

[sunsally]

Originally Posted by EliteMike

I don't think this topic was ever about free tan weekends but rather the people selling dirt cheap tanning all year round.

Nope, that was another thread all together.

[EliteMike]

"Not dissimilar to salons that offer EFT - and then give those membership customers discounted upgrade or lotion purchases."

I can't let you have that one. They actually have a positive profit Margin 2 times instead of one.

[Tanning Queen]

Sally,

Read Din's starter post again. It is not about the once in a while FTWE but rather that overall, prices for tanning are really low even tho the cost of doing business and everything else has gone up.

[sunsally]

Queenie -

Read my posts again. I haven't said anything about FTWE other than a passing reference within a sentence referring to something someone else said.

I spoke about why I thought tanning prices are the prices they are, and disputed that "everything" else is going up other than tanning.

[sunsally]

Originally Posted by EliteMike

"Not dissimilar to salons that offer EFT - and then give those membership customers discounted upgrade or lotion purchases."

I can't let you have that one. They actually have a positive profit Margin 2 times instead of one.

There are salons that have this as well. Not everyone in tanning is doing poorly - there are many who are doing quite well and growing!

[EliteMike]

You miss my point Ann, 19.99 EFT no matter where you are doesn't leave you with a great margin unless it's unused.

What Star bucks is doing can't be compared to tanning on EFT. They don't need to upsell to make money. They are looking at it this way as lets make 5 bucks instead of 3.50. I just made that up, I don't know if a drink costs 50 cents. What you are saying, well lets sell cheap with the HOPE of making money.

Lets talk about Electronic Retailers. They can get away with selling items with no margin or even a loss because there are items in the store that will offset it. Those items don't have to come from the same customer either. There isn't much a tanning salon can do to offset it. When i say tanning salon I am referring to no other services being offered in the salon. Just beds and lotion. The same people that go dirt cheap on tanning go dirt cheap on lotion

[navigatin1]

SHOT IN THE BUCK
Can You Bear the Market??
by: Ellen Rohr

Have you ever done this: called up one of your competitors, assumed a fake voice and asked, "How much do you charge?" Go ahead. Admit it. You all do that kind of nonsense.

But here's the really silly part. Have you ever adjusted your selling price to match or beat his price??

If you took Economics 101 in high school or college, you learned that selling prices for goods and services are determined by "what the market will bear." That means that consumers - the market - decide what a product is worth, and will give so much money, but no more, for that product.
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After doing a fake-voice phone survey of a few companies, and setting your prices somewhere in their range, you might say you are charging, "what the market will bear". This beats going to the trouble of figuring out what your company's break-even point is. "We can't charge more than 'what the market will bear'!" is delivered as a logical reason for maintaining below-cost selling prices.

But here's the rub. The "what the market will bear" rule applies to commodities. Commodities are products that don't differ much from vendor to vendor. Gold, for instance, is a commodity. Gold is gold is gold. Gold will follow the Economic rule of 'what the market will bear' pretty nicely. It will be directly affected by the law of 'supply and demand'. Economics 101 works well when you are talking about commodities. But it doesn't count for much as far as your products and services go.

Here's the real rule, the 'street' rule, the rule they don't teach you in Economics 101: the market doesn't set the selling price. The marketers do.

Why does Coca Cola sell for three times the price of generic colas?
How come Rolex sells watches for $50,000 when you can get a very nice watch for $100?
Why did anyone pay $15,000 to cross the Atlantic on the Concord when a jet plane could have got them there for about $500?

The marketers in this world differentiate their products, and make them something more than a commodity. Marketers create and communicate features that benefit consumers. Benefits add value to the product. Coke is the real thing. A Rolex is a symbol of wealth and power. And the Concord went really fast (Speed is always a cool product feature). Higher value commands a higher price. If value = price, then there is no sale. Cash in pocket will only be exchanged for something that has a higher perceived value. So, if a product is worth exactly what you are charging for it, no one will buy it. What usually happens is that you will drop your price until the value of your product becomes bigger than the price, and then sell. However, the marketer increases the value until the price looks insignificant. Then you have more profitable sales.

You see there is a huge problem with basing your prices on what your competition is charging, on 'what the market will bear'. I bet your competition is even more ignorant than you are when it comes to knowing his break-even and his true cost of doing business. He got his selling price by calling other companies, companies that are now out of business. Don't assume that your competition knows what he is doing!

Lots of folks get confused when they set their selling prices. They look at what everyone else is charging, then they hope and pray that they can make money at those prices. So, don't beat yourself up.

Just do it the right way. Decide how much money you want to make. Offer a terrific product. Figure out ALL your costs of doing business. Come up with a selling price that makes your dreams come true. Adopt a marketer's mindset. Create so much value for your product that your customers beg to buy it.

And forget what the 'market will bear'.

[solman]

^^^Good read. Thanks for posting.^^^

[Tanning Queen]

Quote:
Originally Posted by EliteMike
I don't think this topic was ever about free tan weekends but rather the people selling dirt cheap tanning all year round.

Nope, that was another thread all together.

The above post is what I was referencing. You said it was another thread but Mike was correct in his post. He never made reference to your posts in that, just a general comment that the thread was originally about why prices are so low.

[GlowGirl]

I'm a "newbie" - opened in March. I charge $40 for my HP. Just raised all my prices across the board $5 and will do it again right before busy season. A few people questioned it, but I explained the old prices were my grand opening prices. Anyone who complains about my pricing gets my speech about how I'm offering the highest quality services & products and state-of-the-art equipment. We don't have "cheap", we don't run our business "cheap" & we don't consider our clients "cheap". They are important to us and I want them to have the best. The best costs. Bottom line. You can't buy a Mercedes at a Dodge price. I have a unique salon due to my decor & equipment, so I make sure I point that out as well. I put a lot of money, heart & soul into my place & the way we service our clients - and it shows - so 99% of my clients loooove to give me their money and I CONSTANTLY thank them for their business & support. They really like that.

Now, if we can just get the economy to bounce back!!