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Pricing- "How much does a _____ cost?"

Discussion in 'Collaborative Articles' started by gafftaper, Mar 22, 2009.

  1. gafftaper

    gafftaper Senior Team Senior Team Fight Leukemia

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    Occupation:
    Theater Manager & T.D.
    Location:
    Seattle, Washington
    "How much will it cost?" is one of the most difficult questions to answer here on CB. Pricing is highly variable in our industry. No two customers pay the same price. Below is a summary of some of the factors that will determine the price you pay.

    1) The size of the dealer and the dealer's relationship with the manufacturer. If a dealer sells a large quantity of a certain product the manufacturer rewards them with lower wholesale prices. The dealer can pass that savings on to you the customer and sell even MORE products. Smaller local dealers typically pay higher wholesale prices than the large national dealers because they have a lower volume of sales... but not always. Two large national dealers who sell a large volume of the same product may pay different wholesale prices based on the long term relationship of the dealer's purchasing department and the manufacturer's sales reps.

    2) The size of your current total purchase package makes a large difference. The dealer needs to make a certain amount of profit to stay in business. If you are purchasing $100,000 worth of new equipment they can afford to drop their profit margin because they are going to make a large profit overall. When it comes to big packages bidding can be very competitive. In the end even a small profit is better than no profit so dealers can make massive cuts on large packages.

    3) The amount the dealer values your regular business. Loyal customers will be rewarded for keeping their business at the same dealer. Maybe they won't make as much money on this one sale but if they know you always spend $10,000 a year at their store they will cut their profit margin to keep your business.

    4) The relationship you have with the individual custom sales person. MAKE FRIENDS WITH YOUR LOCAL SALES DEPARTMENT!!! They control your price. If they like you they can give you deals. Your little high school theater program can get the same rates as the big regional theater if the sales person likes you enough.
     

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