What constitutes a 'cheap sale'?

新潟県長岡市 アパレル衣類修整のプロ集団 山田修整有限会社
What are your company's criteria for 'selling at a discount'?

I am Yoshida, president of Yamada Shusei Ltd., a professional apparel clothing repair group in Nagaoka City, Niigata Prefecture.


Selling at a low price is strictly forbidden in a phase of population decline! When we talked about this in the sales meeting, one of the salespeople asked me this question later. We talked about not selling at a low price, but recently we have been contracted to do a project at a lower cost than our rival company. Is that no good?" I said, "Fine"!. He was surprised when I replied, "In your case, it's not a problem.


I responded 'okay' for two reasons.


One, because "don't sell at a discount" is not about "unit price".

In our case, we use 'value added per hour' as one indicator. I did not see this as a problem because I could confirm that the salesperson was undertaking the project based on his judgement of the value added per hour for the project in question.


Another reason is that the salesperson is usually able to price in a higher zone than the 'target value'. The 'target value' is only an 'average'. Some are higher than the average, some are lower, and there is usually some variation.


Have you ever heard the story of the 'flightless flea'?

Fleas have the jumping ability to leap out of the jar in which they were originally placed, but if they repeatedly "jump but hit the lid and can't get out" with the lid on, they eventually stop jumping above the height of the jar, even with the lid on.


To apply this to the previous story, there are salespeople whose 'target value' becomes the 'lid'. In the case of the salesperson who asked me the question, I could confirm from my usual pricing that the 'target value' did not become the 'lid', so I replied, "No problem in your case!" I replied.


'What constitutes a cheap sale?' ... It is important to reconfirm our own indicators and standards and to be thorough.