Make your first markdown your last markdown

I learned this lesson from Jim Stewart, who was the once National Sales Manager (NSM) of Yamaha Electronics Corp. (YEC), the American distributor of their consumer electronics division. Jim became a friend and my local manufacturer's rep when he decided he didn't want to raise a family in Los Angeles and instead resigned from Yamaha and moved back to his home town of Minneapolis.

I remembered great close-outs from Jim when he was NSM at YEC. I personally bought many of them. The stuff was just too cheap. When I asked how he could justify these low prices, Jim told me two things. One, the retail price YEC set for goods was determined mostly by the competition, not necessarily what it cost internally for YEC to buy products from Nippon Gakki, the Japanese parent company. He had room to move on his price when close-out time came. Two, he said, "Make your first markdown your last markdown."

I took Jim's wisdom to heart in my stereo store. When I wanted to get rid of something, I didn't drop the price a couple of bucks. I dropped it a lot. A $300 car CD player now became a $199 car CD player. It worked. The stuff moved and allowed me to buy newer, current products which I could make good money on. I'd sell the new one for $299 and be happier than a pig in, well, you know what.

Why am I mentioning this? Because again and again see a strategy in the Classified section where prices on LPs, CDs and SACDs are dropped by $2 after being listed for less than a day. As a retailer, this seems foolish to me.

One, the prospective buyers you have in the Classified section changes daily. While some folks will peruse the listings daily, more people come and go. Another truth I discovered as a retailer is people come into the market, stay there for a week or two until they buy what they want, and then leave the market. Unless the LP, CD or SACD is incredibly rare, like a true original LP copy of Elvis Costello's El Mocambo Club performance, a different set of eyes will view Classified listings every month. And if you do have something that rare, you should be selling it on Ebay or through an auction house, where you can get the $1,500 it deserves.

Here is my recommended Classified selling strategy:

1. Establish a price for your music that you think you can get here. It will have to be cheaper than the average price on Ebay, Amazon or Discogs because at SH.tv you have a very educated buyer. Maybe the price should be 20-30% lower than those places.
2. Stay with it. Bump the thread every few days so that new buyers will see it.
3. If, after a month or two, the piece still hasn't sold, do one of two things:

-- Withdraw the piece from sale. Let the thread die. You can always relist it in a couple of months. Have a back-up listing on Amazon, Discogs or Musicstack. They are like a billboard by the side of the road. The ad is always out there for people to see. You might sell your LP, CD or SACD at a high price there.
-- Cut the everloving crap out of your price in the Classified section. Instead of being 20% lower than the average market price, make it 50-60% lower. Your music will then sell.
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All the time, I see records in the Classified section that start out at $40 and daily go through $2 price reductions until, a week later, the price is $28 and the album sells. Why go through all the middle steps? Personally, if I see somebody starting to nickel and dime their price, I'll wait. I know it will just continue to go lower. I'll be the guy who buys it for $28. Instead, make your first markdown your last markdown.

 

I agree except.... I find the situation where the $40 lp goes to $38 and then $36 etc. etc. to be quite entertaining. Sad, but entertaining

And I'm not selling my true original "Live at the El Mocambo".

 

How about buying my bootleg El Mocambo copy instead? I paid decent money for it 20 years ago, before I knew virtually all of them were fakes. I'll make you a hell of a deal.

So true, which brings up another great selling lesson I learned for free from a salesman wiser than me.

Tell a story. Make your listing worth reading.

By far the best on the forum at this is Cassius. His Classified listings are always extremely entertaining. There are pictures, a history of the album with an exciting description, and a breakdown on sound quality by song, which in reality just gives him another avenue to tell you why this album is so great.

You don't have to go to the lengths he does, although I'll applaud you if you do, but you ought to tell me why I should buy this LP, CD or CDR.

• "Ladies of the Canyon by Joni Mitchell reminds me of the first girl I ever kissed. It's so innocent."
• "Every time I listen to Lou Reed's Rock 'n' Roll Animal I want to play air guitar while bouncing off walls."
• "The question is not was Squeeze's Argybargy the best power pop record of 1980 but was it the best power pop record of all the '80s?"
• "You will never find a cleaner copy of this record. Ever."

You have to give me a reason to buy other than price. Tell me a story. People love stories.

 

This is good advice. I suspect that the few things that I have attempted to sell here have not garnered much interest mainly because I don't play the game were I drop the price incrementally 6 times - I price it at the price I want to sell it for, with very little wiggle room for discounts. I think people here expect that the first price you offer is fungible and if they just let it hang for a couple of days, it'll come down. I'm generally not willing to cut items dramatically because I try to make the initial price attractive. But there is wisdom in your recommendations.

 

None of this stuff relates to the actual worth of the item though and IMO is subjective. Why does someone else's relationship with an album cause you to pay more for it? Why do you need someone to tell you what you are interested in is so great, unless its really obscure and you have ZERO chance of having heard it?

I think the long long posts on albums are fine for what they are but using it as a selling tool and actually havign it increase the price seems kinda weird to me. Start a thread about how great the LP is and what it means to you but IMO keep the SELLING of an album all about the actual item, like condition, stampers, country of origin etc and thats it. All IMHO of course

 

Stories are good in some print ads--where you are trying to unload a warehouse of something at a good price. Online, Woot has been brilliant at this.

Stories in the classifieds here, where someone is trying to hype a single copy of something, just bug me and I move on. I figure if you have the time to tell that story, you're trying to sell something for a lot more than it's worth TO ME. And inevitably that's true. The ads that actually offer something I want at a price I'm willing to pay are never flowery. I do not need to see vintage photos of the artist sucked off Google. I do not need to know what the record meant to you. I do not need to know a history of the artist transcribed from Allmusic. Tell me about the specifics of the item you are selling: Condition, pressing. If there's some differentiating aspect that makes it rare, let me know what that is. The rest I either know, don't need to know, or I can look up myself.

I do agree with your first post, about the nickel and dime price drop tree stuff.

Even more annoying are the threads that have "one last drop then it's off to eBay"...followed by more posts with more price drops.

 

I don't agree that one should offer an item here at 20% or 30% lower than the going rate elsewhere.

And the reasons for the constant price drops is because the item was way over-priced to begin with. The seller is not listing anything that special, and it 30% higher than it commonly sells for.

What is funny is when they go lower and lower and lower and it ends up with no sale anyway.

Some things are not going to move and that is that, nothing to do with price.

 

I used to love the DAK catalog and the creative writing of Drew Kaplan.

Point taken. In my stereo store days, I created newspaper ads with dozens of products in line listings where "just the facts" were all I used. Being the SH.tv buyer is a more educated one, that could well be the best approach.

I still think, some way or another, personalizing the product as much as you can is a good idea. Maybe it's with a joke in the rest of the copy or some actual product shots. One of the most favorable comments I've ever received on an newspaper ad was one of those with 70+ products in it. We had an Alpine 3522 amp on sale. On the surface, it looked like an unimposing 30 watts per channel stereo amp. But it was as stable as a rock. On cars coming through our installation bay, I saw customers had used it to drive everything from four speakers with a sub to two subs plus a string of Christmas lights, lining a car's back window, which pulsed with the music. Instead of specs, I said the amp was "more flexible than a 14 year old gymnast." That got people's attention. At $129, we sold boatloads of that amp.