"What's Your Best Price?"
As seen in Rug Insider summer issue 2009
The new economy has brought out the worst in our customers. “What’s your best price” has become their mantra and any answer you offer is treated as a beginning point for some awkward haggling. Not so long ago, customers embarrassed by their interest in a rug they couldn’t afford, would politely demur by saying “ I wouldn’t want to insult you with too low an offer.” No longer. Shamelessly, they might now offer you half of what was already a much reduced price and some attitude when you respond with “no thank you.”Emboldened by articles in sources as venerable as the New York Times, they feel that we merchants have been reduced to begging for sales and no offer will be refused. They don’t do it at the grocery store or with their electric companies but we rug dealers are certainly considered fair game and our industry is somewhat to blame. Some among us have created a culture of unreal list prices that no one is expected to pay and it has come back to bite all of us. Of course, this has always been a problem for those of us who do not overprice our merchandise but it has become much more difficult to distinguish ourselves from those who do.
As always the best approach is to educate potential customers as tactfully as possible. They already know that a Lexis can’t be bought for the price of a Chevy. They simply don’t know which is which when they’re looking at Oriental rugs and a short explanation of the differences in quality may help. A lot of unnecessary discussion can be avoided by asking what price range they had hoped to be in at the outset. If they have been looking at prices on certain web sites that shall remain nameless here, their expectations probably can not be met by quality conscious purveyors.
There are a number of theories floating around as to what the market will be like when the dust clears and it’s way too soon to spot a winner. At this point one can only speculate about if and when we will see any improvement in home furnishings sales in general and those of handmade rugs in particular. Our future is closely tied to that of the housing market which shows signs of not having bottomed out yet and we are warned that the next financial crisis will revolve around credit card debt which is bound to impact our industry. Credit cards after all, are the currency of our business. They allow cardholders to buy something they don’t really need without feeling like they’re paying for it immediately.
One appealing scenario has the current state of the economy impressing consumers with the importance of investing in things of lasting value rather than buying disposable ones for the short term with the idea that they will just replace them in a few years. One indication that there may be some validity to this notion is that Americans are moving less than they have in decades. Choosing rugs and furniture that will last should go hand in hand with staying put. While this theory does not bode well for the chains that sell mass produced look-alike items, it could be a good sign for those of us whose offerings are unique, handmade and extremely durable.
I agree with those who say that our business may never return to the levels we saw in the past. As one friend of mine put it recently, ”Half is the new whole.” But those of us who can hang on through these doldrums by cutting costs to the bone and buying only what we have to will be the ones left standing when sales begin creeping back upward. The longer that takes, the fewer of us there will be at both the wholesale and retail levels. I have always felt that it is easier to raise sales than it is to cut costs and there is no limit to how high sales can go but there is a limit to how low your costs can go. In times like these when value-oriented advertising can even fail to bring in warm bodies creative cost cutting becomes necessary.
More than ever in times like these we need to reinvent ourselves. That could include the use of temporary locations such as auctions, flea markets and on- the-road shows or short off-hour sales events for our core clientele – whatever it takes to keep the doors open at least for a while. But if staying open means digging yourself into a deeper and deeper hole it may not be the best option.
As I write this we have just been through the worst decline in sales we’ve experienced in the 37 year history of our business followed by a slight uptick which could be a sign of things to come. By the time you read this we may see signs of a trend in one direction or the other.