The Big Secret

[optirep]

Nah, it was a joke Chris--I certainly hope you make about ten times more than me!
Optirep--how is it impossible to lower markup yet increase dollars? Here's an example:
You were buying generic soda for 5 cents a can, selling it at 50. You make 45 cents per can, 900% markup.
I come in and sell Le Coke by Chanel...buy it for 50 cents, sell it for a dollar. Way less markup but I'm making five cents more per can.
I would not have to increase volume to make more money.
I know some people are discounters and very good at it. It's not my demographic and not my style. My whole point in the original post is that consumers aren't stupid--they realize we have to have a markup, and while we don't want to advertise it we should be able to admit to our markup without shame.
And hey, my tactic worked. Lots of posts now about markup and lots of different views.

You got me totally Lost here. I thought you did'nt sell brands!

Are you lowering you mark-up or buying more expensive product and then marking it up less?????:hammer: :hammer: :hammer: :hammer: I'm lost!

[Mr_Mitchell]

I do sell brands, I just call the 800 number to order. I realize the rep still gets a cut but at least they don't waste my time.
And yes, I'm buying and selling more expensive product and marking it up less. I don't see what's so complicated about that.

[optirep]

Now I get it!

All you said before is that you lowered your mark-up. If you just lower your mark up you make less money.

I think the idea is not just make more profit but attract more business and getting them to come back again!

[Chris Ryser]

All you said before is that you lowered your mark-up. If you just lower your mark up you make less money.

Optirep,...................just seen that you have not yet signed up for your subscrition to the Optiboard.............hope that Luxottica can afford the few bucks to support you to sign up. :finger:

[MarcE]

Mr generic is much smarter as he can carry 10 times your inventory and sell his product at half your price. I'd spend a nickel to make 45 cents any day, rather than spend 50 cents to make a buck.

Ah, but if there are only a limited amount of customers that you can take care of; say 200/month. Then 10x the inventory at a lower price doesn't help me because my customer pool is limited. I would rather make the extra nickel. However, Le Coke customers tend to expect (and they should) better service, warranty, atmosphere, higher quality staff,etc.
I mark up my Le Coke more than 50 cents. I also sell the generic stuff too.
We like to present the best, but never turn anyone away because of what we offer or don't offer.

[CME4SPECS]

Ah, but if there are only a limited amount of customers that you can take care of; say 200/month. Then 10x the inventory at a lower price doesn't help me because my customer pool is limited. I would rather make the extra nickel. However, Le Coke customers tend to expect (and they should) better service, warranty, atmosphere, higher quality staff,etc.
I mark up my Le Coke more than 50 cents. I also sell the generic stuff too.
We like to present the best, but never turn anyone away because of what we offer or don't offer.

Well I'll be darn! If you couldn't carry the 10x inventory, you'd have to do something silly like bank that money.

[Mr_Mitchell]

It's obviously a matter of volume and customer base. MarcE is exactly right.

[CME4SPECS]

It's obviously a matter of volume and customer base. MarcE is exactly right.

Are you changing all basic rules of business 101?

[ilanh]

One big advantage of not mentioning prices is that optiboard does not degenerate into a sales forum. Currently, most discussions center on actual optical/medical issues or even on interesting business/strategy discussions. However, bringing prices into the mix would simply attract a lot of consumers trolling for info or would even have us polling one another on various costs.

[Mr_Mitchell]

Yes, CME4SPECS, I'm changing the rules. I have this idiotic notion that money in the bank is more important than markup percentage. Yes, you could lower markup percentage and markup dollars and hopefully increase volume--in my case that wouldn't work--we're not discounters and I have no desire to sell crap to the ghetto crowd. I also can't sell Chrome Hearts etc. and that's okay too.
The choices are simple:
High markup, high dollars--that's great if your shop is in Aspen.
High markup, low dollars--that's what most people here suggest, and if you want to be a discount optician then go for it.
Low markup, high dollars--that's my idiotic notion.
Low markup, low dollars--that's Wal Mart, and if you think you can beat them on volume then go for it.
I've been at my practice four months and have increased sales, bottom-line dollars, set a one-day sales record, increased average sale from 160 to 284, and still want to do more. What the hell have you done besides get defensive about a markup you charge to make up for your lack of ability?
My customers trust me, and that's why I sell premium lenses. I earn that trust initially by charging less for frames. I don't want to advertise our markups, but I could still sell even if the customer knew exactly what the markup was.
I have complete autonomy where I work and I'm paid well, based on my track record...not based on whining on a message board. I throw ideas out here and learn from the responses--what I've learned from the bulk of responses to this post is that most opticians are afraid we'll get "caught" with our 400-percent markups and people will buy glasses online.
Well, my customers won't. Maybe yours will. Perhaps if you charged a markup you weren't ashamed of you could function without fear.

[MarySue]

All kidding aside, in the UK the government found out the mark-up of spectacles in the 50's I believe (someone correct me if I am wrong) in doing so, they determined that the mark-up of frames was too high, and therefore the price of an eye exam too low.

What occurred following that decision, and the separation of sales and professional services paid for by the government was a mass hysteria of sorts which took all the commenwealth countries into a tricky formula for mark-up. Usually cost plus a low margin plus a dispensing fee plus a fitting fee - you get the picture.

No one wanted to be pointed out as being too hungry for profits in health care, and that is the industry we are in.

So Mr Mitchell - there's your answer. Canada, being a close friend and neighbour to the USA would have seen it's tricky formula skip border crossings to make it into USA practice.

At least that's my story and I'm sticking to it!
:hammer: