Why cutting costs can lead to discounting in your small business.


Photography Business Institute
Photography Business Institute

Every day, I wake up and read my favorite blogs on my iphone. Seth Godin’s blog post today was one that I want all of you to read and think about. He talks about cutting costs to save a dollar – especially at the top of the market (which, by the way, is a really good place to be). Well, in theory, if you save a dollar, that becomes profit and should drop to the bottom line. But here is the problem. You are then delivering a product or service that is the same as everyone elses. If you have a niche business that is different from everyone else and you are able to give your clients an unbelievable experience, penny-pinching on your products and services isn’t always the best choice. At my boutique photography studio, we are always looking for cooler products and ones that nobody else offers. Of course, this means that we must have the self-discipline to stick to a marketing and promotional plan and not wake up one day, panic and reactively discount our products. It is all a vicious cycle; buying cheaper products, having to discount your products to get buyers in because you aren’t special anymore, attracting price-sensitive buyers, feeling pressure to discount more, not having the margins to stay in business, etc. This cycle FORCES you to purchase lower-priced goods and services because you can’t justify the margins to your clients.


My challenge for you is to find the VERY best vendors and take the very best care of your clients that you can. This will attract the best and most loyal clients and allow you profitable margins so you have the extra money to do extra nice things for your clients. See how that cycle works?

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