These are five methods I have seen suppliers mislead you with pricelist.
Both big and small suppliers use these methods.
) Salesmen know that margin and mark-up are a source of confusion. I have seen even experienced retailers muck it up with many years of experience. That is why the salesman will use it. Here is a chart to help you convert from one to the other.
Understanding the two terms is essential to know if you're pricing your stock effectively.
Best solution: Always use margin, and you will not be confused. It will be one less thing to need to think about.
) Rate cards
Rather than quote a price, suppliers will present you with a rate card of their costs. They know that few will work through the items on the rate card. They then tell you how these rates are competitive. There are computer programs designed to shuffle costs to trick you to think that you are getting a good deal.
Best solution: Thank them for the rate card and request a quote of the cost. See what they say and try to get this figure in writing. In the worst case, you may have to work through the rate card.
) Average margins do not equal your margins.
Some suppliers will list an extended price list and tell you the average margin is this. Okay, but this may differ from your margin as you do not handle many of these items.
Best solution: Thank them for the price list and examine the items you handle. Your point of sale can give you the actual figure.
) Conditions change.
The retail world is now moving fast. Prices are going up, and sometimes they go down. What was a good deal yesterday may not be tomorrow.
Best solution: Because you have checked once does not mean you do not need to check again. You need to check it regularly.
) Extra responsibility
One of my clients started selling mushrooms. One day, they learnt that the mushroom industry has a big yearly sale in one month with a special price list and that they are expected to help out. If you think about it, it means that they are running on reduced margins one month a year. They sell a lot in that month, but they are working for the supplier in this product.
Best solution: Check what you are getting into first.
I hope this helps.
