A couple of colleagues from Sydney on Saturday commented that our $2.00 price for 2008 desk calendar refills at Forest Hill was high. Their price was around 20% less. I checked our buy price and sure enough we were marking the calendar blocks up higher than usual – because at $2.00 we considered it to be still good value.
The $2.00 price point was considered carefully by Jason, our manager at Forest Hill. He went for a price which he felt was fair for the product and which was convenient – being at the counter, these are an impulse item at this time of the year. His view, with which I agree, is that the extra we make on this item is balanced by the thin margin on paper and some other products.
Given that newsagents are considered expensive by consumers, there is no point in trimming margin for what is to many an essential item. We’d rather leave margin trimming for promotions.
We’ve had the desk calendar refills out for five days and sales are excellent so price does not seem to be a barrier at Forest Hill.
I was in another newsagency yesterday at the same desk calendar refills were priced at $2.85. This is way too high.
I have been thinking a lot about this issue since Saturday. It goes to the heart of how we manage the stationery department in our businesses. Our competitors balance margin in the same way airlines balance ticket prices on a flight. Where they apply research and discipline to the task, we tend to operate off a flat margin with little consideration of what price an item could carry.
I think there is an opportunity for newsagents to talk more, in small groups, about how they approach pricing of stationery. While no one approach is right, I am certain that such discussion could improve the return all participants achieve.