I am writing today as a supplier to newsagents and other retailers. My newsagency software company, Tower Systems, supplies software to more newsagents than all other newsagency software companies combined.
The price of the newsagency software is the same for everyone, $185.00 a month (including GST) rented with no lock in period. You can have as many terminals as you want. Included in the Xero link, Shopify link, Tyro link, Smart Pay link, and plenty more.
A newsagent recently enquired about switching software. After the demonstration, they asked for a better price. Following some discussion it turned out that price mattered much more than what the software did, more than value and benefits they could leverage for their P&L through the software.
They came back a couple of times on price. In the meantime, another company they were talking with dropped their price twice.
We urged them to go elsewhere, and to not ask us again for a better price. Their obsession was wasting our time.
The relationship between supplier and retailer, whether it is for products or services, needs to be considered long-term and in the context of mutual business value more so than what it might cost today.
While there are suppliers desperate to cut prices to win business at any cost, they are unlikely to be the suppliers delivering the best value for their clients. They are unlikely to be the suppliers evolving in ways that benefit their clients.
There is no connection whatsoever between cheapest and best. Anyone chasing cheapest deserve what they get.
You only have to look at the value of a cheap generic tool that you buy from some big hardware business compared to the value of the more expensive brand name tool on the shelf next to it. In my experience, the more expensive brand name tool delivers more value.
While I understand why some suppliers give in to price pressure and discount, and discount some more, that action does not give them capacity to invest in a valuable relationship that better benefits their client and their own business.
This is true with product suppliers, and services suppliers.
While, for sure, you want to make sure that any price you pay is fair, pressuring for a discount just because you want to pay less without even understanding the value of a product or service does not make sense to me.
Our channel does not benefit from people chasing cheap. We are better off leaving that to the $2 shops, the discount variety businesses and other similarly awful cheap shops as the only thing they can compete on is price, and competing on price is a mugs game.
After note: this post is not the business one supplier thinks it is about. In typical fashion, they jumped at a shadow and landed in a puddle.