The Price Is Right

When members of the public go shopping at the local mall, the price marked on goods for sale is the price that people expect to pay. When a store is overstocked or when sales are slow, a retail store may offer a discount on their products to increase sales. Discounts are usually short-lived and charges eventually move upward again toward the real list price.

Internet marketing has caused a major shift in the purchasing attitude of the public. Every internet site can be accessed by millions of viewers every day. Some sites display a counter box at the bottom of their website showing how many people have visited their site. The total number of visitors is often in the tens of thousands.

Internet sites can afford to drop the selling price of their products far below a normal list price because they sell in volume. Regardless of the size of your locksmith business, there is no way that you can expect tens of thousands of customers to suddenly walk through your front door any time in the foreseeable future.

There is no doubt that the locksmith distribution network has always been helpful in providing the best possible discounts on the security products we need but Internet sellers have changed the rules. As an example, a popular well-known lockset is offered on the internet for 31% below list price. A locksmith distributor catalog lists the same product for 39% below list price. If a locksmith sells this product to the consumer at the internet price, he or she will make an approximate 8 percent profit, or $33 on this item. If the lock was sold at list price, the locksmith would be making a profit of $162.

A real-life situation sparked this editorial. One of our writer/locksmiths gave an estimate to a potential customer for furnishing and installing the lock product mentioned above. The price-conscious customer searched the internet, found the lock product at a 31% discount, and purchased the lock from an internet seller. The customer then asked our writer/locksmith to install the lockset. The only part purchased from a local locksmith distributor was the IC core.

Discounted internet pricing for security products is not going away. A solution for locksmiths is to refigure hourly labor costs to reflect the revenue lost when customers purchase their own hardware. What this all means for the local locksmith distribution network is an open question.