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loss leaders (pricing)

updated wed 26 jun 02


Imzadi . on tue 25 jun 02

Tony Clennel wrote about his Supersize Sugar Bowls:
<< I'm in love with many of the small ewers, and beakers, and cups and
saucers that Sheila makes but it is Mr. Big that gets them to look closely at
the small pots... Most potters can't do it well or they do the math and soon
see that a couple of shelves of cups adds up to alot more money than one "Big
Sugar". Loss of big pots, and just the handling of them is alot of work. I
tell people the big pots are the best deal in the showroom. that is fact! >>

There is a pricing/marketing strategy that supermarkets and department stores
use. It is called "Loss Leaders". A Supermarket advertises that chicken is
on sale for a ridiculously low ten cents a pound. The store knows people will
flock into the store, buy the chicken, then have to buy some veggies that go
with the chicken...and then the potatoes... why not pick up a jug of milk
since I'm here...better pick up some cereal too...Oh, yeah, butter...

A Loss Leader is something that is sold at a "loss" but gets them in the
store to hopefully buy something else. You could say Tony's Supersize sugar
bowl is a loss leader since he stated many smaller items collectively could
be fired in the same space and sold for more. BUT, as he stated, it brings
them over to the booth!

I've seen a few posts about what price to put on mugs. Respectable -- for
what it's worth and costs to make, or lower like the guy at the booth down
from you.

I've found, for myself, that people will spend $30 without a thought on three
mugs or small bowls, but have to think it over two or three times to spend
the same $30 on one larger bowl. One $30 bowl is an investment. Three small
bowls are three gifts to three different people!
Sometimes, one person, knowing he WILL spend $30 on something at my booth
will go back and forth between the mugs or the bowl. Usually he buys the
three mugs. Often they will say to me, "I love the bowl, but I can give one
mug to Susie, the second mug to Aunt Emma..."
They feel they are getting more bang for their buck.
(Interestingly, the $30 bowl gets sold right away once all the mugs are
sold -- usually by someone who doesn't think twice about the price. So I know
it wasn't the (lack) of quality of the bowl as to why it didn't sell in the
first instance.

There are some items I make quickly, which I don't have to trim that I sell
as Loss Leaders.
Often if someone buys one $10 pot, while I'm wrapping it, they decide to
buy a second and sometimes a third. (I always wrap first before taking the
money, so they feel they are only paying ONCE! What's another $10 bill?)

Also, I've found when one person is buying at my booth, it attracts other
people, either wondering what's good here, or that the pressure is off them
to look around since I'm busy wrapping up someone else's pots. They end up
buying too.

For me, one $10 mug has lots of mileage...