N
newcastle phill
Have to say im not convinced by your argument.I know some people enjoy the cut and thrust of haggling, but we prefer our single, transparent, price policy.
We charge £2.45+VAT for that wash-mac tee, and are making an reasonable profit at that price. Why should it matter how much you spend? Tesco's don't give me better prices if I go there more often!
The moment that a merchant decides to maintain a discounting / multiple-pricing policy, two things unavoidably happen.
Firstly, the merchant acquires an additional overhead, because they have to employ someone to negotiate that discount, and then to administer both the discount and the inevitable cock ups
Secondly, the plumber has to spend time negotiating prices in the first place and then checking his invoices, to make sure he has been given his terms correctly. He also risks getting ripped off if he buys an item that he has not previously negotiated terms on.
Both of these add cost to the transaction - the former ends up being recovered through higher average margins, and the latter via wasted time. The plumber pays for both these additional costs.
We prefer to work out the best price that we can afford to sell an item for, and then offer it at that price to all customers. If there are economies of scale to be had, we will gain them by aggregating thousands of small customers, rather than a handful of big companies. This also has advantages of spreading risk.
We do not then have to hire salesmen to negotiate, or sales administrators to keep track of credit notes for overcharges. The saving that we make by not hiring those people goes back into either lower prices or better service. We make a reasonable profit - enough to pay our bills and invest in opening more branches.
Simples!
For example - That is the exact reason you dont sell baxi because you cant negotiate a price you want based on the size of your spend.
And your presumption is that the buyer will always presume you will be the cheapest because you fly under the "trade only banner".
But the reality is, certainly in relation to boilers im my experience, that I find you simply arent close with most except a main eco elite.
Sorry this is gonna upset a few peeps but that is my observation.
Im sure you do have good prices on some bits and bobs but its not across the board. And yet you are trade only so according to your argument - why is that the case ???
I already know the answer though - your business model is a double edged sword which limits your own bargaining power because of your limited customer base.
If I was to pick 100 items i use im sure I could get 80% of them for less from others operating via a different business model.
Wooolsy can sell me one cheap because for everyone they sell me cheap - they probably sell 5 or more at higher prices to enable true trade discounts based on spend.
i.e i buy more i pay less.
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