BY Chuck Nwachukwu||
Taking cue from more established businesses, we’re fine tuning our products and services. We are looking at the numbers and micro managing certain processes.
We are working towards a new offering, providing our consumers with a new collection of #Lagos inspired merchandise. Our goal with these new offering is to create a range of product that easily cuts across the gender, socio and economic demographic. We have created in collaboration with a nice urban brand out of Canada a range of items; classy yet affordable; reflecting our heritage yet with international acclaim. Hence we expect that our latest offering would be a lot more affordable than our already existing products.
At Lagos LaidBac we take pride in the value we bring the city of Lagos; the public representation of our cultural inheritance; the message of hope and glory we instigate.
More often than imaginable we are burdened with the margin called profit. All so easily over-looked we have to weigh the profit margins alongside the value we intend. Our strong point and bottom-line is Value Creation; on the other hand we run a business with overheads and real debts. Finding a balance is key.
Fixing prices isn’t as rational as taking the market average and pegging a number. This week we spent more time looking at the market average; figuring out from research statistics; considering our production costs and taking into account wholesaler markdown. These form the first phase of setting prices. It’s pretty technical, for the entrepreneur I suggest working hand in hand with a financial analyst as this saves the business structure invariably from either being way over priced or way under priced.
The market average markdown for wholesale in Lagos city is relatively high, anywhere between 40 to 50 percent the recommended retail price. So we have a portion of the market element dictating and influencing largely the cost outcome. Our next option is consignment stocking; stockists charge an upward of between 20 to 25 percent to keep in stock merchandised items from producing companies.
For us we have worked out a situation where demand has been created for our items, which we consider the first hurdle to cross.
Next we have created a referral system that constantly works in partnership with our various stockists to move, push and direct buyer traffic to these retail outlets.
For stockists this we realize is particularly important for the obvious reasons.
Finally, we have come up with a percentage for both wholesale and consignment stocking that’s considerably lower than the market average.
Two things stand out at this point; we have created the demand for our items which invariably is great for stockists and distributors. Now we easily have our pick with stockists or wholesalers; setting our prices and not easily muscled by organized retail.
Best prices are important to all the parties in business; producers, retailers and consumers.
Prices are important.
________________________________________________________________________________________ Chuck Nwachukwu of Lagos LaidBac the Official Lagos Merchandise Shop