Industry Secrets: Pricing your shelves correctly

So, you’ve just opened a bottle shop? Congratulations. It’s a “tough” industry people said. You can’t compete with the majors people said. Yet, you did it anyway. Good for you.

 

Now, you need to make it work right?

 

So, let’s make it work.

 

Firstly, don’t focus on what the ‘majors’ are doing. Focus on what YOU can do. Focus on what will bring the consumers into YOUR store rather than drive 10 more minutes to a big chain. Focus on being a point of difference. Focus on brands that exceed expectation and deliver amazing value for money. Focus on providing so much knowledge and service that people look forward to talking to you every week (or every day depending on how often they buy booze).

 

When it comes to pricing it’s important to train your staff on the pricing you want the customers to walk in and see. What price do you want to stock wines at? Sub-$15? Would you prefer to be more of  a $20-$25 per bottle kind of shop? At the end of the day it’s up to you. You can’t use the area as an excuse as every area has their pros and cons. The important thing is to decide what kind of shop you want to create.

 

Here is the key.

 

Use floor stacks. Ensure your floor stacks have 2 for $30 or 2 for $35 products and ensure you are making at least 50% on these stacks. This can be achieved by negotiating with your suppliers and charging for the floor stack. I mean, it’s prime real estate, you pay good rent for your shop, utilise every spare floor space available (without creating trip hazards!)

 

When people see a 2 for $* deal, they subconsciously will buy two because they believe they are getting a better deal. At the end of the day, they would probably come back for another bottle the next day (or next hour) so why not save some money? Even if it’s $2.

 

Then, when pricing your shelves remember that humans only really see what’s right in front of them. Let’s face it, we are bombarded with so much information that it’s just too hard to look for too many things. Always keep your $25-$30 price items right at eye level. This is the first thing people are going to see. The lowest shelf should have the lowest priced products. In the same way, the top shelf should have the most expensive products.

When choosing your $25-$30 price items, make sure you are working with suppliers that offer amazing value for money so you are making incredible margins at this price point. Basically, ensure you are buying wine for $12-$14+GST as that is really fantastic value for money. Perfect for the $25-$30 price range!

 

Finally, help your staff to help your customers. Educate your staff on what products you really want them to sell! Ask your reps for samples for your staff because at the end of the day, when you aren’t there, you still need your staff to perform and optimise your business profitability!