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April 06, 2006

When It's All about Price

I stumbled up a great post on a Gardenweb forum by a garden center owner. A young couple asked him why his plants cost $25, when Home Depot only charged $10. He explained in his posting that he was lucky to make 7% on his $25, but rather than explain rising gas, water, and overhead cost, he simply replied that if cost was their only consideration you should shop at Home Depot (garden center employees could be working in the lumber department in the winter and often have little plant knowledge).

Pricing is often a sensitive subject with clients. But, if consumers think that their local garden center (hardware store, etc.) can compete with one of the worlds largest corporations on a price basis, they have little or no understanding of the realities of the marketplace.

Why does a beer at a restaurant cost $4 when you could go to the supermarket and buy a six pack for $7? Because, you are paying for an experience of being in a full service restaurant, not just the beer.

We aren't the cheapest in our market segment either, but we sell more than landscaping, we sell a process and customer service along with our product. We tell potential clients the same thing as the nursery owner, if price is your only consideration, we are not going to be the right fit for your needs.

Posted by Michael O'Connell at April 6, 2006 09:34 AM


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