Find out if your veterinary practice can afford to price-match.
Q: Should I match prices with Internet pharmacies or big-box retailers?
There are five questions you need to ask yourself before deciding to price-match, says Veterinary Economics Editorial Advisory Board member Gary Glassman, CPA, a partner with Burzenski & Co. in East Haven, Conn. Here are his top points to consider before slicing any price at your practice.
1. Who are you price-matching against? First, survey your competition—would you be matching retail or big box store prices? Keep in mind that there are many companies selling veterinary products online, too.
2. How much would you have to cut your price? Gather your comparative data and determine whether you'd have to significantly slice your price to remain competitive. Would you lose one dollar or less?
3. How much will it increase sales? If you did cut your price, calculate how that would impact your practice's total income: Is it going to maintain it, raise it, or keep you in the marketplace?
4. How's it going to impact your bottom line? Beware: you could end up lowering your price, selling more products, and still remain less profitable because you just can't make enough off the margin.
5. What does it do for client loyalty? Determine how much price-matching matters to clients. If you don't cut your price, will you lose one product sale or the client? Decide whether the client will still come back for the services that are important to him or her.
You're the only one who knows if your practice can afford to price match. "I'm not suggesting you shouldn't ever price-match, but you should certainly ask yourself these questions first," Glassman says.