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Run a Sale WITHOUT Slashing Prices this January

Howdy,

Before you run off and give all your hard-fought profit away in a slew of price decreases, let’s take a different angle that allows you to sell more and still maintain your current prices, you could even make more than you would normally.

Discounting Upwards

Run a Sale WITHOUT Slashing Prices this JanuarySo many people automatically think “January Sale =  I need to reduce my prices”.

But let’s stuff this idea in the turkey and take a different approach.

And how do we do that?

Simple, it’s called “bundles”

In the article I wrote a couple of days ago called “A Competitive Advantage for eBay & Amazon in Plain Sight”, we learned that bundles or kits are everywhere.

A kit or bundle (I’ll use “bundles” from now on for the rest of this article for ease) is simply two or more products that naturally go together in a single purchase.

Not giving away all your profit

Being in the midst of a building project at the moment, the example I’m about to share with you is specific to what I’ve been doing personally, however keep in mind that this approach will work for any type of product and can work for you too.

Oh and I have a super-simple tip for you on how to get started at the end of this article as well.

When you buy a radiator you only ever get the bare minimum from the manufacturer, that is the radiator itself and the mounting brackets, if you’re lucky the mounting bolts and wall plugs.

But to complete the job you actually need several other parts.

This is the key detail we’re looking for, one or more products that are additionally needed or desired.

These vary depending upon the final application and could include:

  1. The thermostats (note this one as they’re normally a tenner or more a pop)
  2. PTFE tape (the white tape needed to make a good seal on the connections)
  3. Decent wall plugs & screws
  4. Chrome or white plastic covers for the pipe work (also note this one as they have a visually attractive nature to them)

And of course you could go on and include the other tools & materials, such as wrenches, solder, a blow torch, flux, olives and so on… But that would be too much to go into a single bundle as we’re starting to stray too far away from the main purchase.

Note: Did you detect another bundle there? The blow torch, flux and solder! They go together so well!

And back to the radiator.

Let’s say the radiator has a end-user price of £70, the thermostat is £15 and the pipe covers are £10.

These 3 products naturally go together and bought separately would cost the customer £95 plus delivery.

So my point to you is that instead of discounting the radiator and losing out on the additional sales of the thermostat and pipe covers, include them all together into a bundle.

Using this example we’ve:

  • Increased our price from £70 to £95
  • Or more attractively grossed 35.71% more for a single sale
  • And we’ve helped our customer by making it easier for them

We’re up by £25 on the original sale price and that gives us a little more room to manoeuvre when it comes to pricing, however I would still be wary of dropping the price of the bundle by any massive amount.

Instead you have several options available to you:

Offer free delivery

The radiator weighs a ton, so customers envisage that will cost them more for it to be delivered because of it’s weight (so free delivery makes sense here).

However in reality you’re still under the 30Kg weight limit by most couriers and costs you the same amount as a normal delivery. AND you could very likely pack the thermostat and chrome overs into the radiator box too.

Assuming that the courier cost is £5, the actual margin impact to the £95 sale is just 5.26%.

Your customer is happier because they got the key parts they needed, paid you more because of the bundled products and you didn’t lose anything dramatic.

Winners all-round!

Include one of the additional products for free

Pipe collarsLet’s say you include the chrome pipe covers for free.

These had a price of £10, but let’s say they really only cost you £5 landed. As far as the customer is concerned they’re making a purchase of the radiator, the thermostat and getting a free set of chromed pipe covers.

Note: I chose the chrome pipe covers here because these are the “oooo shiny part” of the bundle that really finishes the project off well.

So the bundle price is now £85 (£70 for the radiator + £15 for the thermostat) and the customer receives a set of chrome pipe covers (the “ooo shiny thing”) for free.

Your actual cost hit isn’t the full £10, instead it’s less than this as your cost price of the pipe covers was £5, so instead you have given the customer a freebie, upped your price by 21.43%, included additional products in a single sale (which can help drive down prices because you’re buying more from the suppliers) and you only reduced the overall price by a fiver in the process.

Even more ideas for you

Including a product for free or tweaking the delivery price are two very easy ways of discounting, without giving away all your profits.

In both examples your order value went up, not down and kept any reductions in price to way under 10%.

However don’t think for one moment that these are the only two options available to you, here are some more ideas for you:

  1. Offer free shipping on orders above X value
    That bundle maxed out at £95, tantalizing close to a £100 threshold for free shipping. What other products would also be a temptation to the customer? Radiator covers or a clothes rack for example?
  2. A promotion code for future purchases
    In my mind, customers are not real customers until they have been back for more.
  3. Retargeting previous customers
    You could use a bundle like this contact your existing customers who have purchased similar products, maybe those who bought your blow torch, flux & solder kit for example :)
  4. Buying stock to specifically sweeten the deal
    The wild-card that I didn’t suggest above was to include another product as a sweetener. Say a set of screwdriver bits or a fluffy toy or a handbag or some makeup or a ruler or a…. (you fill in this part)

Upwards, never downwards

So many other businesses will start slashing their prices and giving away their hard-earned profit margins. Don’t be like everyone else, think smart and discount upwards rather than downwards.

Bundling products will work for any type of product whether you’re selling keyboards & mice (don’t you also need a mouse matt?), a dress (how about a matching handbag or necklace?) or even a humble radiator.

Picking products that naturally go together is easy, infact that tip I mentioned at the beginning of the article is also in “plain-sight” too.

Your customers are telling you what you should be making bundles for!

Take a few minutes to look back through the orders you have received in past 6-9 months, specifically look at the orders where customers bought more than one product from you.

Notice any trends? Bundle them.

How can you use bundles for your business? Do you already use them? Or have you thought of another method to discount upwards that I didn’t cover in this article?

Let me know in the comments box below, I’d love to hear your thoughts.

As always to your continued success,

Matt Ogborne

This article was originally posted here & here.

5 Tips for Preparing Your Business for January Not Christmas

It’s now late November and we’ve seen a good couple of press releases from supporting companies on how to increase and keep your Christmas period sane. However, it’s all too late as preparations for Christmas really should have been in place at or before August.

If you’ve not trained seasonal staff, arranged stock transfers, deliveries, put automation software in place, heck everything that gets amplified due to typical higher sales volume, then the next 3 weeks are going to be “fun time” for the business.

 

I Forgot January Once & Only Once!

However… below I’m sharing a short story on why you should not forget January and learn from a mistake I made a couple of years back.

After having a pretty hectic Christmas period, I had decided that on the 1st of January I was going to have a week or two off. Oh boy did we need it. We had been flat out for the past few months preparing for Christmas sales and had thought we had done everything right, sales were good and were very much looking forwards to the break and we thoroughly enjoyed it.

On our return, we started talking to our suppliers and that’s where it hit home, it turned out that our two main competitors had been busy & done their homework. They had an amazing 3 weeks after Christmas. They had been negotiating special deals and jumping on the clearance lines that were abundant. They’re January had rocked to the point that they had cleared more stock in those 3 weeks after Christmas, than in the entire month of December.

I cannot tell you how sick I felt, I had missed one of the oldest tricks in the book.

No Slacking in January!

January has the potential to bigger for sales volumes that December, the reason is simple people are in “sales mode”. What happens just after Christmas or even just before, 99.9% of all high-street retailers go into sales mode. People queue & even camp out on shop doorsteps to grab bargains and ironically this is really straight forwards for you to hijack.

So instead of making the mistake I made, here are five tips for preparing for the first few weeks of January or before:

Tip #1 – Delay Moving Software Providers

Shelve any idea that moving software providers, that can wait until the middle or later in January, if they got you through Christmas, then a few weeks delay won’t make much difference. If it’s not completely broken, don’t fix it (yet).

Tip #2 – Speak to Your Suppliers in Advance

Ask them explicitly what is going on sale after Christmas, suggest that you’ll be able to take larger volumes or stock that didn’t do well at a discounted rate. Spell it out on them, you have extra buying power after Christmas and you can help your sales rep hit his bonus for January.

Tip #3 – Prepare Several Lines to go into “Sale Mode” Now

By using tip #2, you will have an idea on what product you may have at better rates for a sale, as such prepare any data around these in advance, it’ll only take a few minutes per SKU as you can easily create duplicates or variations of the SKU in advance, with new details and perhaps use a different listing template to go with them.

Also a slightly different method would be to consider products that you would feel comfortable sitting on for 9 months, that you know will do next year and scoop extra discounts now and take a punt on higher returns next year?

Tip #4 – Do the Artwork Now

Designers are typically not very busy at this time of the year and it could be a good time to grab a saving on a mild branding redesign for a sale period. Such as adding sale logo’s to an existing template and preparing the design aspect in advance, so that its a click & go event, rather than a rush job when it’s too late.

You might also want to look at the two articles I wrote earlier this year on How to Make Your Own eBay Daily Deals & Weekly Deals and another on How To: Using eBay Shop Keywords to Leverage the Extra eBay Shop Pages, as you can prepare these in advance and hide the pages in the shop, then when it comes to sales time, swap them over in your eBay shop.

Tip #5 – Email Marketing

The same as the visual aspect, if you’ve worked and have obtained a couple of product ranges that will be worthy of a sale, then combine in the updated artwork to your email marketing campaigns and prepare the notifications in advance, so when the time comes, it’s a quick check over and off you go.

As an idea, if you have multiple products, you could make an event of it, explain which products you have going on sale and when (a delayed sale) and notify customers on say a daily or bi-daily basis of the latest sale item (you’ll need to be careful with this not to spam, just make your offering exceptionally compelling).

Summary

Don’t make the mistake I made, prepare for January, what products can you clear, what products can you buy to clear and how can you leverage the “sales mode” that most buyers go into at or before January?

If you do this now, before competitors have started having the conversations, then you can be first in and negotiate the best deals in advance, prepare a campaign and take January easy, knowing that you’ve worked extra hard now and actually have a plan for the month, rather than just “seeing what happens”.