Hey there, fellow marketers.
Professor Wolters here, and today we're here in Bordeaux,
France.
And today what we're gonna talk about are business pricing
tactics.
These are things you'll see businesses do to try to sell
more of their products to other businesses, okay?
One thing you might see is what we call seasonal discounts, and
what you do with a seasonal discount is actually offer a
lower price to get people to buy your products out of the normal
season.
And in a business sense, that's in order to get like other
companies and retailers to buy our products before they usually
buy them.
For example, you might see deals on air conditioners at the end
of summer, or you might see you know, play places, you know,
like, like playgrounds and stuff like that.
Playground equipment might be on discount around the Christmas
time, because people aren't thinking of putting a playground
in their backyard in December because the ground might be
frozen.
You have these different things out there to inspire people to
buy at different times of the year that they're usually
buying.
I'm not worried about, you know, selling my- my beach towels in
July, I'm worried about selling my beach towels in December,
okay, so you kind of think about those things.
So you offer those seasonal discounts to inspire purchases
in different seasons than your peak season, okay?
Now another thing you might see is a cash discount, and you
might see a cash discount. In the B2C world, you might also
see it in a B2B world.
For example, you go to a restaurant and they offer you,
"Oh, if you pay cash, you pay 3% less or 5% less, there's those
kind of cash discounts."
But in a business sense, you might see something like a 310.
If you pay within 10 days, we will charge you 3% less for the
products or for all the supplies.
You think about that.
Why is that good?
Well, one, you're getting the money sooner, because a lot of
companies pay on 60- or 90-day kind of payment intervals, and
if you're getting that money a lot sooner from your clients,
hey, that means you can do something with that money.
You're not waiting for it to come.
So that's really nice.
Also, it helps you manage inventory, because you have to
pay to store this stuff for an extra 90 days.
If it's out of there in under 10, greater and better for you.
Now another thing you might see businesses do is they might
offer allowances with their price, and there's different
kinds of allowances, it could be advertising allowance, like
let's say I have an agreement with a grocery store, okay?
Look, if you advertise my products in your store, I will
sell them to you at a lower price.
Okay, so you're getting kind of an advertised allowance.
Another kind of allowance is what's called a slotting
allowance, and that's where they slot the products in and you
might pay for a special slot like, you notice when you go
through the checkout aisle, there's all that candy there.
They don't just put it there to be nice, they do that because a
lot of times those candy companies are paying to be
there.
So basically what these allowances are is we're offering
you a discount for doing something for us.
Now the next thing I want to talk about are what we call
quantity discounts, and you all know the quantity discounts when
you go to the grocery store, and you see the Lucky Charms and
then they have the Lucky Charms family size, right?
And the thing is, wait, if I get the small box of Lucky Charms,
it's $2.99.
If I get the Lucky Charms box, that'll feed me for a month,
it's only $4.99.
Like that's a lot more Lucky Charms for just a little bit
more money.
Yeah, that's a quantity discount, and companies want to
do that.
Why, you ask?
Well, one, I'm getting more money off you on this one
purchase, so that's nice.
But also, I'm locking you in.
I mean, think about it when you were a kid, would your parents
let you go buy another sugared cereal if there was still a box
in the cabinet?
Of course not.
You had to finish that stuff first, right?
And so with the quantity discounts, we're locking in
those clients for a longer period of time.
Now we just say a quantity discount, basically you're gonna
discount the more you buy, but the thing is, there's different
kinds of quantity discounts.
One you might see is what we call a cumulative quantity
discount, which where it's a- a-a it's over time, they kind of
rack up, it's like, "Oh, you bought a lot of this over time,
so we're going to give you this lower price," okay?
There's also what we call a non-cumulative quantity
discount.
This is what you'll see if you buy from Amazon.
They give you that discount by giving you free shipping, if you
spend over $35.
If you don't spend over $35, too bad.
You have to pay for your shipping, and it doesn't matter
if you bought a million dollars on your last order, it has only
on that one order so you're gonna have discounts like that.
And then there's a business pricing tactic you might want to
know in terms of delivery and you might see this with Amazon,
okay?
And what you'll have is there's uniform delivery pricing and
zone delivery pricing, okay?
So with uniform delivery and pricing, you have the same price
to deliver your goods no matter where, right?
So it doesn't matter where you are in the US or where you are
in Europe, they're going to ship at that same base rate, right?
So you have that.
The thing is though, if you're going to be shipping really
heavy stuff like if you're shipping tires, and cement,
things like that, you can't have one you know delivery cost, if
they're shipping like 1 block away versus 100 kilometers away.
That costs you a lot more money.
And so what you'll see is what was called zone delivery
pricing, and that is in different zones, you're gonna
have different delivery prices, okay?
So it could be if I'm delivering here in Bordeaux, it is 10 euros
per shipment.
If I'm delivering in the rest of France, it is $20 a shipment.
If I'm doing the rest of Europe, it's $30 for shipments.
If it's leaving the European Union, it's $100 for shipping.
You'll have it by those different zones, okay?
So these are just a few kind of pricing tactics you might see
businesses use.
There's plenty more out there, but I just wanted to give you
some of the basic ones.
I hope this helps you know a little bit more about business
pricing tactics.
If you want to learn more, hit that subscribe button and we put
out new business videos every week.
Anyway, I'll say bye from here in Bordeaux, or au revoir de
Bourdeux.
Au revoir.