Cash and Carry – A cash and carry will be more expensive than other orders, but will have almost no minimum order requirement, allowing you to buy stock exactly as needed. You need to remember that orders have to be paid for at the time of purchase, and you will need to transport the goods yourself; meaning time away from the shop.
Pricing
All of the products that you sell need to be priced, and doing so effectively can make a huge difference to the success of your business.
The prices that you charge will depend on the number and quality of products that you sell. Some businesses make higher profits on small numbers of products, while others make small profits on a large number of sales.
Most products come with recommended retail prices, and although you do not have to stick to these, you are not likely to sell many if you go above them.
There are three major factors you should look at when working out what prices to charge:
Profit Needs and Cost
If your business has very high costs or if you have paid a lot for your products (E.g.: Buying only in small amounts), you may need to charge a little more to cover them. However, if you have low costs you may be able to reduce your prices to promote sales.
“You may need to alter your prices over time, clearing old stock to make room for newer items with higher profit margins.”
You may need to alter your prices over time depending on the lifespan of your products, reducing dated stock to clear, allowing room for newer stock with higher profit margins, or clearing out food that is almost past its sell-by date. For example, if you have a six month old £200 electrical product that is about to be replaced with a new model, you need to decide whether to try and clear it now for £170, or risk it only fetching £130 after it is out of date.
Competition
If you have a competing business nearby that sells the same product as you, you need to decide whether to ignore their price, match it, or try to undercut them. Some businesses get away with charging more because they have earnt a reputation for good service, but this is a risky strategy to take with a new business.
You must be careful of trying to undercut a competitor too often, as you may spark a ‘price war’, causing both companies to lose profits by needing to sell as cheaply as possible to beat each other.
Accepted Cost
Most goods have an accepted cost; this could be a recommended retail price, or simply the most common price. Customers are likely to expect this price, and anything above it may put people off strongly. Accepted costs can vary from place to place, and you need to aware of expected prices in your area, in order to keep your business competitive.
Article Index
Buying Stock 
