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.