to SIB....
When I first started my business, I lost money for my first two seasons....literally LOST MONEY. Like you, I shaved my margins and offered free delivery in hopes of winning over a good number of loyal customers who would be in it for the long haul. I would buy tractor trailers of wood pellets, one at a time, have them dropped off in my driveway, and when it came time to deliver, I would load up my pick-up truck bag-by-bag and deliver the ton to the customer bag-by-bag all for zero margin. I sold them for the same price that I paid for them. I did this so that I could learn the business and develop a customer base. Now...fastforward to my third season, I needed to make money. I had no choice but to raise my prices because I could not afford to sell at cost like I had been. I also had to charge extra for delivery because it was expensive to deliver and EVERYONE else that I was competing against was charging for delivery as well. In doing so, I was able to retain a good majority of customers who loved our personalized service. They were happy to see my business grow and appreciated the fact that I filled a void where they used to struggle to find good wood pellets. Sure, there were a few guys who pissed and moaned because my prices went up. Some of them griped and said they were going to shop elsewhere and others warned me that by raising my prices, I would lose all of my customers. I will admit that I did lose some. But most peoples warnings came as a result of trying to meet their own personal needs, not friendly advice that had my best interest at heart... That's all. When selling at a loss, you will never be able to make up for it in volume. Do not fear those that tell you that you won't sell as many tons this season.....so what. It is better to sell 10 tons and make $40 per ton than it is to sell 1000 tons and lose $1 per ton. Keep your chin up, cater to those customers who show you loyalty and just politely smile and disregard those nay-sayers who do not truly know your business as well as you do. This is what I did and eight years later, I am one of the largest wood pellet dealers in New England. Retail is a tough business and while most customers are awesome and many become good friends, there will always be a small handfull who feel entitled to call your shots. Good luck my friend.
Scott
well, the customer IS always right, aren't they?
kinda the same story here. We used to hand unload our pellets into the customers' garage, their cellar, walk them down to the shed, etc., and we used to do it for free. So, send out maybe 3-4 tons on the back of a truck, 2 guys to hump the pellets to wherever they needed to go. In those days, when there was less competition, we would GROSS about 50 bucks a ton or so. Depending on where the pellets were going, a couple guys could do a few deliveries per day. If you sit down and math all that out, it really didn't pay to do it. Folks complain about carrying pellets into their cellar.....well, try doing that for 2,3, or 4 customers per day, 5 days a week. yep. So, we bought a truck and forklift......pretty big chunk of change with the equipment, repairs, driver, insurance, Heavy Highway Use taxes, IFTA taxes, etc. But in doing so, now a single man can deliver 28 tons per day (of course he isn't hand unloading anymore). If the driver is motivated, the record for delivery is 52 tons per day, but that's with planets aligning, and everything going right. I challenge anyone to unload by hand that volume in a day. So, things evolve.
Even though sales is a two way street, its usually not seen as such. That's where the customer is always right comes from. Of course the customer cannot dictate everything, particularly where service or price is concerned. We, as independent retailers cant beat everyone else's price, because that only makes you as stupid as your stupidest competition. I've never heard anything bad about CT Pellet, their prices or their service.....and this is in a world where folks are want to tell everyone they can about a perceived slight by any retailer. I can only assume you are doing something right.
Folks are always looking for the lowest figure, the best service they can. I know I do. Your job as a retailer is to sell at the fairest figure you can, priced to remain competitive, offer service to best benefit your customers, but also to price to afford you a reasonable profit to provide you a good level of living. It really doesn't benefit you to not make money, work like a dog every day, and still have to worry about how you're going to put food on the table and shoes on your kids' feet. If you are busting your butt, and have nothing to show at the end of the year, well, maybe you ought to go to work for the RMV, where service is the utmost concern of the folks who work there.....
He raised his prices $54 
You mean he isn't gonna sell below cost and provide free delivery anymore? Gosh dang it...
