How to Price Match on Libby Glass

Many distributors selling ARC, Anchor Hocking or Chinese knockoffs use aggressive price strategies to undermine their competitors. The problem with price-based selling, however, is that the customer feels no personal connection to the supplier. Last year we went through a brutal rebranding process. We revamped our image from being relatively low cost to a quality domestic provider, from China private label to a national distributor for Libby Glass - America's finest. As such, we knew that we would lose the majority of our price sensitive customers who buy strictly on price and utility over quality, personal preference or saleability.

After settling into 2009, we've come across a different breed of dissenting clients. Some of our competitors have been nipping at our heels by undercutting. The most active use whatever means necessary to generate a quick sale. We've let this process occur far too often over the years; we felt that meeting a price or constantly giving discounts would create a pattern of behavior that is difficult to break. How could we possibly raise price or even command a decent profit margin if customers are always used to low balling us?

I've learned that if your clients do not link their relationship with you to their success in business then you have failed to communicate a mission worth following. We believe that our close relationships with clients balance good faith and accountability. We get our price because we deliver; we've earned their trust. However, we also recognize that we need to change to be successful in this new retail and wholesale environment. If consumers expect lower prices, then we need to adapt.

One method that I think works well is a price match guarantee; in other words, like electronics retailers, we ask our customers to show up with proof of purchase. Show us a competitor's invoice, freight included, for the same or equivalent product at a lower price and we will match and/or beat that price. As soon as we started pursuing this process, we came across opportunities wherein we couldn't possibly match price without taking losses. We realized that we needed to set some ground rules.

Here is what we learned:
(1) the glass jars must be exactly the same. If they are not showing you an invoice for a specific piece of Libby Glass, like a Libby Status or Libby Vibe, you cannot compare them. For example, Anchor Hocking's pressed glassware is slightly cheaper to manufacture than seamless. However, the walls are seamed and the shapes are not as beautiful;
(2) freight cost must be factored into the equation. Freight accounts for at least 15 to 20% of the landed cost of goods;
(3) closeouts on equivalent products are one-time buying opportunities and are not valid comparisons;
(4) availability and service levels should offset slight differences in price. If the competitor cannot ship or doesn't have sufficient inventory, then price matching is irrelevant. You can charge a higher price for convenience;
(5) lastly, make sure that you are spending your time matching price on orders worth pursuing.