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A note on discounts and pricing

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Recently I read a post by a friend complaining that a business only discounted their prices 10% for a sale. In their opinion, such a discount is too little and hardly worth it. That in fact, nothing less than 20% should be considered a discount.

I was floored with this personal opinion as a business owner and as a consumer. I do feel that it is sometimes true that a 10% discount is not attractive enough for me to make a purchase on certain items. My opinion is more closely tied to how much of a necessity the item may be. I will always comparatively shop for many items and factor in hidden costs like shipping and ease of purchase. If I have to drive to save 20% and can have it shipped free for 15% off then I may opt for the lower discount because it saves me time and effort.

I started thinking about our pricing strategy here at J&L. We rarely have sales, we offer few discounts and specials throughout the year. There is a very real reason why we don’t. We already operate off of very tight margins. After we factor in our hidden costs we don’t have a lot of room to give big discounts. We have even been told our prices are too low, that people may feel that we are of lesser quality because of our prices. That is simply just plain wrong.

We could simply raise our prices and then offer an array of sales, promotions and discounts. This would skew our inventory and production schedules to meet anticipated spikes as well as mean that when a customer is in need of a product they are paying a higher price so at another time they can save. In the end, for a regular loyal customer, they are paying the same if not more.

Our pricing strategy has always been to make our products as affordable as possible within our niche industry. Along with the intent that the user will get the best benefit out of the product by using them as they are intended and not too sparingly that the long range benefits are not adequately achieved. It is not lost upon us that many of our products cost more than name brands found at Target, Walgreen’s or even the local grocery store. Those products are not within our niche industry. When you look at brands like Lush and The Body Shop you will find we are on par with ingredients but our retail pricing is substantially lower. Even looking at some of the specialty brands you will find us to be comparatively priced and sometimes even cheaper. For example; our Lip Balm is $3.00 for .25 ounces while Burt’s Bees runs $2.79 to $3.89 for .15 ounces – that’s 40% more balm for roughly the same price and we are using the same ingredients.

We may not run sales and big discounts but we strongly feel we offer a great value when it comes to natural personal care products. This just means that when we do offer a discount it is something special above our already great prices.

Share with us your thoughts, we love to hear from you what you think.

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