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Learning about Pricing

We're learning things. As a new vendor, we're learning about pricing. I thought we'd share. There is wholesale, retail and map. Most of you are familiar with wholesale and retail. Wholesale is what stores buy the product at. This can vary in how much something costs the store from the manufacturer or the distributor. Map pricing is the "Minimum Advertised Price." This is the minimum price the retailer agrees not to go below. Why is there map pricing? To make sure it is fair for everyone in the distribution channel, and no one can undercut the pricing. Think Apple computers. Whereever you go, the price is about the same.

So, for the Grace systems, retail and map are pretty close in pricing:

Q'nique 15R - Retail $4,499.95 Map $3,799

So, you're thinking, we're just going to find the Map price.

Be careful. We've been looking at everyone's pricing as part of our understanding of vending.

- Free Shipping? Some maintain retail but have free shipping; Some have Map but charge shipping. That's something to look into. Free shipping is a good option, as they are big heavy machines.

- Extras? Some companies throw in extra stuff; some don't. We've added leaders to all of our packages b/c you really can't run the machine without them.

So, we are still struggling with understanding pricing. We looked at All Brands, Leah Day, and Grace themselves. We decided to go with the Map pricing plus shipping included and the leaders included. We also wanted room for our affiliate program (5% of our list price for the sale of the machine).

So, let's look at the Q'nique 15R again.

All Brands: $3,799

Now, let's see. They went with the Map pricing. There is no free shipping (about $250 addition), and no leaders (about $150). So, the real price is: $4,199. So, we are about the same as Grace.

Leah's selling Grace products too! (And we so love Leah). Let's look at what she's selling it for. So, Leah's doing the retail price: $4,499. Why? Because she is adding in free shipping. So, that raises the cost for her. She also provides accessories as extra add-ons.

Actual Cost: $4,499 + free shipping + plus leaders (around $150) = $4,649

Grace Company

Grace sells their systems too. What are they listing the 15R at right now?

A. Retail price

B. Map price

Answer: A. Retail price. They do not offer free shipping. So you have to add on that cost too (Around $250), and they do not include leaders (none of them do, but you need them, which again is another $150 or so.)

Actual cost: $4,899.95

Our thoughts/Our Pricing.

We at first looked at Map, but then we had to deal with shipping. That is really really complicated. It is based on zones, weight, etc. I think that is why many people do free shipping because it is just easier than having to add that in to the review.

So, we went somewhere in between. We are above Map pricing ($3,799) but below retail ($4,499). We added free shipping (had to -- too hard to figure out), and we added the leaders too. We came up with: $4,200. We wanted to at least match the competition (that was All Brands, a big store, and our friends). We wanted to make sure we covered shipping and the leader cost (above the $3,799 -- b/c remember we had to price the machine itself at that.) So, that's what we came up with.

Retail price: $4,899 (machine + shipping + leaders)

Our price: $4,200 (same as All Brands, even though they list at $3799).

We don't have the name recognition of Leah Day. So, we thought maybe people would purchase because of the price. Now, will anyone purchase this or other machines from us? Hard to know. We are learning a ton, that's for sure. So, Map pricing, shipping, and add-ons.

Also, we haven't even talked about customer service or accessories. For another night.

Note: Grace is offering certain free frames with the purchase. So, everyone is offering this deal. It's a great deal. And the 19 and 21 also have free frames. If you are in the market for one of these, buy it before Jan 1. Really. Saving $1400-2400 on the frame is so very very cool.


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