| Many distributors selling ARC, Anchor Hocking or | | | | One method that I think works well is a price |
| Chinese knockoffs use aggressive price strategies | | | | match guarantee; in other words, like electronics |
| to undermine their competitors. The problem with | | | | retailers, we ask our customers to show up with |
| price-based selling, however, is that the customer | | | | proof of purchase. Show us a competitor's |
| feels no personal connection to the supplier. Last | | | | invoice, freight included, for the same or |
| year we went through a brutal rebranding | | | | equivalent product at a lower price and we will |
| process. We revamped our image from being | | | | match and/or beat that price. As soon as we |
| relatively low cost to a quality domestic provider, | | | | started pursuing this process, we came across |
| from China private label to a national distributor | | | | opportunities wherein we couldn't possibly match |
| for Libby Glass - America's finest. As such, we | | | | price without taking losses. We realized that we |
| knew that we would lose the majority of our | | | | needed to set some ground rules. |
| price sensitive customers who buy strictly on | | | | Here is what we learned: |
| price and utility over quality, personal preference | | | | (1) the glass jars must be exactly the same. If |
| or saleability. | | | | they are not showing you an invoice for a specific |
| After settling into 2009, we've come across a | | | | piece of Libby Glass, like a Libby Status or Libby |
| different breed of dissenting clients. Some of our | | | | Vibe, you cannot compare them. For example, |
| competitors have been nipping at our heels by | | | | Anchor Hocking's pressed glassware is slightly |
| undercutting. The most active use whatever | | | | cheaper to manufacture than seamless. However, |
| means necessary to generate a quick sale. We've | | | | the walls are seamed and the shapes are not as |
| let this process occur far too often over the | | | | beautiful; |
| years; we felt that meeting a price or constantly | | | | (2) freight cost must be factored into the |
| giving discounts would create a pattern of | | | | equation. Freight accounts for at least 15 to 20% |
| behavior that is difficult to break. How could we | | | | of the landed cost of goods; |
| possibly raise price or even command a decent | | | | (3) closeouts on equivalent products are one-time |
| profit margin if customers are always used to low | | | | buying opportunities and are not valid |
| balling us? | | | | comparisons; |
| I've learned that if your clients do not link their | | | | (4) availability and service levels should offset |
| relationship with you to their success in business | | | | slight differences in price. If the competitor cannot |
| then you have failed to communicate a mission | | | | ship or doesn't have sufficient inventory, then |
| worth following. We believe that our close | | | | price matching is irrelevant. You can charge a |
| relationships with clients balance good faith and | | | | higher price for convenience; |
| accountability. We get our price because we | | | | (5) lastly, make sure that you are spending your |
| deliver; we've earned their trust. However, we | | | | time matching price on orders worth pursuing. |
| also recognize that we need to change to be | | | | In our case, we focus solely on competitive bulk |
| successful in this new retail and wholesale | | | | deliveries. The idea is that it has to be an equal |
| environment. If consumers expect lower prices, | | | | exchange - a lower price for a large quantity, for |
| then we need to adapt. | | | | example. |