p5gal5 - 12:34 pm on May 25, 2010 (gmt 0)
We do a bit of wholesale (but prefer not to or give special pricing). We have a similar scenario where we try to provide the average customer with an item at a reasonable price, resellers will sell our widgets for 50%-200% more.
Giving a 10-15%-off is still profitable, but obv. not as profitable as selling direct to endusers...our solution? No accounts outstanding. Maybe it has cost us some business, but have heard too many horror stories about:
2. Dedicating staff (or own time) to collections
3. Cashflow issues
4. Losing large account(s) and having to lay-off 1/3rd of staff
A diverse customer base is important...b2b, b2c, wholesale...if you're in a position to resist, continue to resist. If not, haggle, require guaranteed minimums/incentives/0 days outstanding, etc.
Studies (testing Freud's pleasure-pain and reality principles) show that invidividuals will do more to deter pain than gain pleasure. Perhaps deter their pain (pricing) just enough that they do not seek to gain pleasure (own version of your widget).