By Mr Retail
These days, finding inventory can be a full-time job. And to say it is stressful would be an understatement. Who would have thought 15 months ago that we would be rolling into a pandemic and then see our industry explode with growth? I sure didn’t. But there’s a caution I’ll get to in a minute.
In many industries, we see the ‘supply and demand’ principle in full effect. Increasing prices of building and construction supplies is a prime example. But our industry is different and we need to be sensitive to “price gouging.” Let’s explore some more.
In short, price gouging is when a company inflates their pricing based on demand. From gasoline to chicken wings (yes chicken wings), we see it all around us. So what is the difference between price fluctuations and price gouging? It is pretty simple. If you are paying the same for a product during a shortage and you inflate your pricing because you have it and other retailers don’t, that is gouging. Now, to be clear, most vendors have a suggested retail price and some have a lower minimum advertised price. Either is fine. You may also have items you typically sell on promotion and now you are asking full price. That isn’t gouging in my opinion.
So, why shouldn’t I raise my pricing to whatever the market will bear if I have it and no one else does? It is because of the Internet. Let me explain. CarPlay radios are in short supply, yet all of the major brands are sold online by respected retailers like Crutchfield. Plus, many of our vendors list retail pricing on their sites. So, if a client comes to you and sees an inflated price, you could possibly destroy that great reputation you have spent years building. In my opinion, the risk is NOT worth the reward. And if we are being brutally honest, wouldn’t we get upset if we were on the receiving end of it?
Most of us weren’t willing to pay the $1,000-1,500 pricing on ebay last Christmas for a PS5. We thought it was nuts. But hey, people bought it. But we aren’t ebay sellers. We are respected local retailers. And if we want the consumer population at large to trust us, then this is an instance where looking to the big guys like Best Buy is a good example. Their pricing stayed the same.
Now, let me close with one last thought. What I am NOT saying is you can’t have price increases. If a vendor price goes up for you, your selling price will also go up. I also suggest you re-visit your labor rates and accessory pricing to see if some positive changes need to be made there.
We are all in this together and need to stay the course as our industry can’t take any more black eyes. I believe in you, and our industry. It has been home to me for over 30 years now.
About Mr Retail
Mr Retail will be offering opinions and information on car audio retailing for CEoutlook. He wishes to remain anonymous. He has owned a retail store in this country for over 20 years now. Mr Retail loves what he does and loves the 12 volt industry and is happy to share his hard won expertise.