I returned from college for the Christmas break one year and my parents picked me up at LaGuardia. As with all retailers, then as now, this was the make or break season for mom’s little store on Madison Avenue.
The ride home was uneventful but a little quieter than usual.
Dad asked if I had plans to spend my time back in New York with any of my high school friends. But I had spoken with several of them and they were going skiing with their families. So I was pretty much on my own and free to do as I liked.
Mom asked if I would mind helping her at her boutique. I was happy to do so. I loved her little shop and I enjoyed working with her customers – so I was all for it.
As mom and I walked to her store the following day, I knew something was wrong. I asked her what was going on.
She told me that she had made a “very big mistake”. She had purchased 20 dozen of an item that she was sure would be a big seller – and after four weeks she had yet to sell one of them. (She had spent $600 on them – which for her little shop was a very big investment).
When we got to the store I looked in the window. As usual mom had done a beautiful job, artistically showcasing the items that she had for sale. I saw the culprit which was the subject of mom’s concern. It was a writing pen.
The pen was topped with a silk rose and fit neatly into its flower pot base. The rose came in white, pink, yellow and red. Although it didn’t appeal to me, I thought it would have been a very acceptable present as a “hostess” gift – and many of mom’s customers enjoyed hosting little get-togethers.
As I looked at the window display, I realized why mom wasn’t able to sell them.
We went in the store, turned on the interior overhead lights and those for the display cases within the shop.
I said to her, “Mom I know why your pens aren’t selling. They’re too cheap. There is nothing in your store that a customer can buy for less than $20 – and these pens are priced at $5. Your customers think that they’re junk. So let’s reprice them at $17.50 and see what happens. What do you have to lose?”
Without saying a word, mom took off her shoes, went into the window and pulled the price placard from the rose pen and the ones inside the store and went to the back of the shop. A few minutes later she came back with new placards which read $17.50 and put them in front of the pens which were on display.
That day we sold twenty-eight of the pens. And during the following week we sold over fourteen dozen. (They were almost as hot as today’s latest iPad). Even though she reduced the price on the remaining stock to $10 during her after Christmas sale, her original investment of $600 returned over $4,000. By far, these pens were the most profitable item she had in her store that season. And all because of a price change – or more exactly – a price increase.
It makes you wonder.
Does a rose at any price not write as well?
(My apologies to the immortal bard for maligning his verse).
But to quote him more accurately,
“There is nothing either good or bad but thinking makes it so.”