Thursday, February 10, 2011

I will open my plant shop, will lower prices than competitors draw me consumers ?

Do you intend to open your plant shop ? This is probably a good idea, data in your country on ornamental plant and flower activities would certainly show that these sectors have not lost jobs since the rise of the large scale supermarkets, while many other economic activities have constantly reduced employment, losing the added value originating in the past from selling time in small shops. The wide varieties of plants constitute an obstacle to the concentration of sales and the subsequent structural unemployment caused by the large distributors.

However you can be tempted to think that by offering much cheaper prices than your already established competitors, you would attract many clients. This is usually not true and would cause the number of clients to shrink, from the following series of events, that can be tested by observing shops on ebay or any other selling platform :
- nowadays through internet your competitors will immediately get information on your prices and plant size or plant quality, so they will immediately lower their prices to match yours.
- too low retail prices of plants decrease their value both in the minds of the buyers who lose interest in them and as re-seller's revenue.
- with a shrinking interest simultaneously from final consumers and re-sellers in their plants the producers will stop quickly to offer them, and they will be out of the market. Finally all players : consumer, reseller and producer will have lost from an initial drop in retail price.

Are you still skeptical ? follow up for a few months on ebay a new plant shop that starts with very low prices, see how fast their competitors are leaving and see in the appropriate page how many sales they manage to do per month, calculate their revenue ( usually about 50% of the final prices if all fees, production costs and hidden costs are included ). Then after some time of very low sales and useless damage to the market you will observe them rising their prices to the initial market level and competitors coming back; selling too cheap would make you the sole seller for a very short time as you would stop soon to make new consumers and the long term repeat clients would also leave all shops little by little. Ask yourself : if plants that you are fond of were in the market as common as weed wouldn't you as other people drop interest in them ?
Try instead to offer choices that your competitors do not offer yet, something new that buyers will not compare to your competitor's offers.

Hoya and other plant collections are for sale on Plant care is available in various posts of this blog. Contact :

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