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19 August 2010

Service, not price

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I've just read Andrew Davies' blog on discounting, and I believe it's here it's here to stay. The internet has killed the price on anything that can be packaged and delivered as long as you can tell what it looks like and what it does on a web page.


We cannot compete with the likes of Boots or Sainsbury's, therefore as retailers we have to compete in other ways. 


We offer a service, we can match the internet prices and charge an additional amount for handling the goods. If we show we are matching the prices on individual items and yet the customer is happy with our complete price - which includes a handling and administration fee - we are offering a service on price and fulfilling the customers' need to feel secure.


Those of us who offer a design and installation service will always be able to compete with the internet as the client is dealing with a person not a screen.


Let's stop moaning about online prices ruining our margins and complain to manufacturers who allow their product to be devalued on the internet by outrageous discounts. Manufacturers who say they cannot control that should look at their own procedures and consider copyright issues and the fact that there are some sites ruining their reputations. 


I don't think manufacturers are really worried by discounting if they are still selling the goods. But in the long run they'll lose the large number of independent stores who value their product as we won't be able to sell it at a profit. 


We will move to companies who protect the value of their product either by controlling companies who insist on discounting or by preventing wholesale slaughter on the internet by restricting access to the product.We can't beat them, we can't join them but we can provide a better service.


Let's not forget we are all in business to make a profit and so let's sell goods that make a profit and abandon companies who expect us to sell their goods for margins of 5% against internet companies. 


Stewart Woodruff, MBK Design Studio, Kent