Manage Your Pricing

There is a saying in retail that you make your profit in buying, not in selling. And it’s true.

“Our sales focus should be on products we can buy at a better price than our competitors, and we shouldn’t promote products we know our competitors buy at better prices than we do. ”

What does it mean for the flooring retailer? It means two things: first, our sales focus should be on products we can buy at a better price than our competitors, and we shouldn’t promote products we know our competitors buy at better prices than we do. Second, we need strict controls on the prices our salespeople can charge and the discounts they can offer. If we don’t have those controls, our salespeople will erode our profit advantage.

Let’s talk about managing our pricing.

Give Your Highest-Margin Products the Best Position

If you carry a product in stock, if a supplier has given you exclusive access to a product, or if a product offers attractive rebates, these should occupy the best display area in your store, and this is where you want your salespeople to sell from first. If your suppliers want to get their products into this area, they need to give you a good reason to include them.

Refresh Your Display: Drop the Dead Weight

“Fixed pricing based on job size gives your salespeople a structure to work within and ensures consistent pricing. ”

Regularly identify products that are not selling and remove them from display, reducing clutter in your store and giving you more space to display larger samples of the products that are selling. Similarly, identify products that you are quoting, but not winning. When this is the case, someone in town has a better buying price than you, and you are better off filling that space with samples of a comparable product you can sell as an alternative.

Use Structured Pricing for Consistency and Profit

Fixed pricing based on job size gives your salespeople a structure to work within and ensures consistent pricing. Aim for multiple price levels that reflect job scale (house lots versus single rooms) and job type (residential versus builders), each with its own realistic profit expectation.

Stop Uncontrolled Discounting – Protect Your Margins

Salespeople should not have the authority to deviate from your price levels. If a price needs to be discounted to win a job, it should always be done “in consultation with the manager”.  This approach makes the concession feel like a genuine exception for the customer. If a salesperson can simply drop the price when asked, it creates the impression they were overquoting from the start.