I have long struggled with the idea of selling products at discounted rates. After all, sustainable and ethical businesses all over the world seem to be boycotting the idea of holding sales, and isn’t that the right thing to do?
I believe that it is in everyone’s best interest to price products fairly from the beginning, being transparent on how items are being priced and why, letting customers into the thought process of why we are asking for a certain amount of money. Ethical creators and retailers often incur in extra expenses to guarantee the quality and values behind their products, and charge leaner profit margins in order to remain competitive in the market place. In my example, if I were to apply the same margins after production to my bags as most high-street brands do, I would be 10x the cost of production to achieve the retail value (in this case, £10.10 x10 = RP £101). Instead of being affordable, my bags would be classed as ‘affordable luxury’, which is not the market I want to serve with this product. With the lean profit margins I apply, I can afford to sell my bags online and through other online retailers, but I don’t have the margins to get the bags into brick-and-mortar shops.
So why am I holding a sale?
The simple answer is to shift stock! Right now I have a lot of money tied up in the form of bags and magazines that aren’t selling as fast as I thought they would, money which I need in order to keep running this small business. Cashflow is the blood of a business, meaning that with no money flowing in and out of each part of it, the health of the business quickly deteriorates. For a variety of reasons, I’ve struggled to keep the money moving during the the third and fourth quarters of 2018 - and with Christmas sales being slower than expected, I decided to hold a sale. The idea is to make the products more appealing to people who might otherwise consider them too expensive - even if by all means they were fairly priced to begin with.
I don’t believe a sale held by an ethical creator or retailer encourages mindless consumption, as our platforms are simply not the place where mindless consumers come to shop. At the same time, I believe everyone loves getting a good deal (myself included) and that if a sale provides customers with a better opportunity to buy something they need or want to invest in, then there’s nothing wrong with that.
What’s your opinion on this subject? I would love to hear what you think about this hot topic!