When running a small business it’s easy to be seduced by the siren song of percentages. Many owners concern themselves with percentages of COGS and gross profit margin, basing important merchandising decisions on rules of thumb. Often they’re businesses are dashed on the rocks of bankruptcy, all because they neglected the more important dollar amount of gross-profit margin.

The difference between percentages and hard dollars is not an academic argument. It could very well mean the difference between profitabilty and financial insolvency. Consider the following scenario:

A small business owner buys widget X at $1 and sell it for $4.

• markup = $4/$1 = 4X
• gross profit = $4 - $1 =$3
• gross-profit margin = $3/$4 = 75%

Now, that same business person see’s widget X with extra features and trapping being sold at $4 from their wholesaler. Most owners would mentally calculate that they’d have to sell the product at $16 (4X markup). While the extra features make the widget X greatly improved, they know no sober will pay that money, so they don’t stock improved widget X.

Why didn’t they think about selling it for $8?

• markup = $8 / $4 = 2 X
• gross profit = $8 - $4 = $4
• gross-profit margin = $4 / $8 = 50%

For the same amount of effort a $4 gross profit and better than $3. Yet many small businesses don’t see it that way.

They stick to old rules of thumb, thinking that a 2X markup is worse than 4X, and keep selling products that net them a lower gross profit. They’ve been seduced by the sirens song.

Photo credit Daniel Y. Go

Retailers who ignore price savvy consumers with mobile comparison technology will be left behind.

Smartphones are enabling people to shop smarter. Price comparison is instant with app’s on the iPhone and G1 allowing consumers to find deals, and sometimes negotiate a better offer. In most cases, retailers have been completely blind sided by the growing mobile bar code scanning trend.

Lately, I’ve been experiencing in increasing frequency mobiles impact on offline shopping behaviors.

Just the other month I had a shopper walk into the ski shop asking if we carried the Salomon Xwing 10. We didn’t have it, and I suggested taking a look at similar skis, but confessed I wasn’t too familiar with the particular ski he wanted. That’s when he whipped out his Moto phone and brought up the specs for the ski.

Knowing what he was looking for, I showed him a couple other skis close to the Salomon. Next he did something totally cool and unexpected, he googled the reviews for the skis and made a decision.

Talk about putting the consumer in the drivers seat!

For many retailers, I bet this type of customer control in the buying process has them quaking. But in reality it’s a good thing. You should stand by your prices, and if you can’t be the lowest then you’d better be competing on added value. Remember, people are still willing to pay a premium for service.

How To Address The Trend

I like how Wegmans is tackling an increasingly price conscious consumer with their comparison shopping signs.

Savvy retailers might take this a step further and encourage people to make price comparisons on the floor. One way to accomplish this is to place UPC codes in a more prominent position. Or perhaps borrow a strategy from Progressives playbook, and create a mobile friendly site that compares prices between you and the competition.

Of one thing I’m certain, mobile price comparisons will continue to grow, and if you’re a retailer, you don’t want to miss this opportunity.

I bet you can think of some creative ways retailers can benefit from the mobile upc price comparison trend, and would love to hear your input in the comments section.

Imagine spending resources crafting an email offer and the accompanying landing page, hitting the send button, only to have a competing website’s link show up within the email for the product your promoting.

There’s a high probability this is happening with your Yahoo Mail recipients. For some time Yahoo has been inserting Shortcuts into email with links to maps, Wikipedia and other contextually relevant sites. This is great for users, but hell for marketers. If you include a product title in the message there’s a good chance Yahoo will link it to an ecommerce site like Amazon.

Is There A Solution To This Problem?

The only way around this is to test your email in Yahoo Mail to find the shortcut links, and make those direct links back to your site to prevent the shortcuts from being added to the campaign.

This isn’t a post about why you should track goals on your website. I’ll assume you already know. Instead I’d like to talk about a problem I ran into while setting up a goal for my company’s ecommerce website and my solution.

When someone goes through the checkout process on our site the url’s look something like:

1) /cart
2) /session/new?return_to=%2Forders%2Fnew
3) /orders/new
4) /orders/3575/payment
5) /orders/3575/confirmation

Notice the dynamic url’s in numbers 3 and 4? After doing a little research I stumbled upon an informative post by Lunametrics, the comments section especially has a wealth of information about setting up goals with dynamic url’s. However, the examples provided didn’t fit my exact situation so I had write the following regular expressions.

1) ^/cart
2) ^/session/new
3) ^/orders/(?=new)
4) ^/orders/b0*[1-9][0-9]{0,8}b/(?=payment)
5) ^/orders/b0*[1-9][0-9]{0,8}b/(?=confirmation)

This will work for a range of numbers from 1 - 1,000,000,000. When we reach 1 billion orders I plan on putting a big flashing neon colored sign on the website announcing the fact. Just like McDonald’s does on the Golden Arch.

Be sure you’ve set Match Type to Regular Expressions in the goal information settings.

Hopefully this helps anyone who finds themselves in a similar situation.

It’s a wintry Saturday afternoon and I’m fitting a ski boot on a gentleman. Sitting there he tells me he owns a local dealership, yadda something about new inventory, great selection and hands me his business card.

Not once did he ask me about my vehicle, is it running smoothly? What I might dislike about it. Nothing of the sort.

This got me thinking. People have different ways of defining networking.

For some their only intent is to sell themselves to every person in the room. This isn’t too far evolved  from an over bearing salesman or the glitzy marketing brochure that talks about the greatness of widget X. When selling is disguised as networking, it gives the latter a bad name.

For other people, networking involves building trust and sharing information. The possibility of financial gain is secondary, not a primary benefit. It’s not about a sale but being genuinely interested in the problems faced by the other person. Often it involves paying forward first, connecting them with people who can solve their problems when you know you cannot. It may even mean suggesting an alternative way for the person to accomplish their goal without you, however if you’re an expert most will forgo the DIY approach (Plus it’s a great way to weed out tire kickers).

At it’s core networking will always be about relationship building based on mutual respect and sincerity. Let’s not let the chimps of the world take that away from us.

Photocredit Funksoup