Sell High !

Oops! Not THAT high!

One of the imperatives is to sell high, meaning as high up the ladder as you can get and to maintain pricing levels. However, that does not mean to price yourself so absurdly that it approaches usury.

As a manufacturer's rep for many years, I found that one particular product line my distributors sold generally went for about a 27 - 30% mark-up. Large orders ($10k ) went for less, usually. This was a multi-tiered distribution product that was discounted according to sales volume. Key distributors got a 30% better price than those distributors that purchased erratically.

One of my key distributors received an opportunity to place a bid for a very large quantity of product, about $22,000 at their cost. One other distributor, not a key account, also got the bid and of course their price was 30% higher. The non-key distributor got the order.
The sales manager of the key distributor called and asked who had authorized better pricing for the other distributor. Investigating, I found out that the other distributor had NOT gotten any better pricing. Reporting back to the sales manager, I asked how much his salesman had put into the quote. The sales manager shuffled some papers and advised "yep, our fault". I pressed for a more concise answer to which he muttered that "the greedy guy put 70% into it".
This was done by a seasoned salesman who knew better but thought that he had the order locked up. Instead what happened was his customer REMOVED him from the bid list believing that my key distributor was, uh, taking indecent liberties.

Know your products, competitors, customers and pricing levels. In today's marketplace, customers (ok, some) will pay more for the sheer "pleasure" of doing business with you. Others will pay more for a better product, service and knowledge. You've got to think really hard to be able to rationalize being twice (or in this case, more than twice) as high as your competitor. Just do the math quickly; Key distributor quoted $73,000 and the non-key distributor quoted just $34,500 , for the exact same product. The salesman probably wanted to put in 30% but most likely used the wrong equation. Somebody besides the customer should have caught this mistake.

Of course, I actually came out ahead because I got a better commission. C'est la vie!!