Customers bargain often? It may be your mistake. (And how to fix it).

If I buy 4 of these you have to give me a discount. I am sure you can manage that.”, said the lady standing in front of my stall and considering earrings worth Rs 100 each. “How much do you expect them for?” I asked. “I want one free on three of these.”, she replied gleefully.

It’s one of those days.

A familiar scenario in your small business? We have had customers turn their backs because we did not give them Rs. 50 off on a certain item.

The pettiness of it gets to us sometimes but dig deeper, and it may be our fault as well.

Why do you think customers bargain so much with small business owners? How it may be your mistake?

Here are some insights we think will resonate. Hidden within are clues to change how you work so that the bargaining goes down.

At the end of the article, we’ve suggested ‘ideal’ small business owner (SBO) behaviors that have worked for us.

Let’s dig in.

1. You have business competition.

There are multiple sellers in your product segment. Some of them are looking to make a killing.

If you won’t sell an item at the cost the customer wants, they can always look for it elsewhere.

They will keep looking for similar and cheaper alternatives with other sellers until they see value for money. No matter how much love or care you put into preparing your products.

A good example of this is packaged snacking food items — sev, chakli, ladoos, etc.

Too many home-based businesses jostling in this space. Until they go bust due to quality or supply issues, they have stolen your customers. For some time, at least.

2. Your products require low to no skills to create.

Perhaps products can be easily recreated and require skills that can be picked up easily.

Customers know this and want to obtain something cheaply. They might be able to create your product independently but are paying you only because you are saving them time. Not because your product is outstanding.

They will determine its value based on how much time they think it requires to pick up a skill and create that product. And that value will always be lesser than your quote.

A great example of this is items made from quilling paper — jewelry, fridge magnets, and decorative items.

Everyone from the very young to the middle aged can pick up this skill and launch a one-person store. Where does that leave you?

3. Your product is an impulse buy.

Customers will not compromise on essentials — groceries, staples, and medicines. Sometimes even coveted items of clothing. They will not mind shelling out the asking price for these goods.

If your product is in the nice-to-have, not a must-have, it leaves room for bargaining.

An Earthen Oil Essence lamps kit falls in this category. An air freshener is cheaper and has low maintenance.

An earthen lamp needs a resupply of tea lamps for the oil essence to work. Not to mention the occasional cleaning. And too bad if you drop the oil or the lamp.

Unless your customer is really into it, the product will be a hard sell at the cost you are asking.

4. Your product does not meet the latest trends.

Using the best silk fabrics, you have created a fabulous pattern for a Salwar Kameez set. However, the fashion market has left you behind by moving on to the new trend in colors, patterns, and fit.

Customers are aware. They want to be a part of the trendy crowd.

Unless the price of your product equals the cost of holding on to the old-fashioned dress till the time comes to wear it, they will not buy it.

5. Your products do not follow market standards.

The home-based business is a fairly unregulated area. Sales often happen through word-of-mouth networks and a long-standing reputation. Market standards are unheard of or bent to suit the maker.

Which is fine till the goods are not a danger to or affecting people.

In every exhibition, there are at least a dozen women selling homemade beauty products. They claim the products are organic, without harmful chemicals, and long-lasting.

Everything that apparently commercial beauty products are not. Who is to know?

Why would someone buy a lipstick from them v/s buying it from, say, a Revlon or a Chambor — unless the price point is too good to resist?

This gives customer room to bargain — it’s you v/s the big boys. And we know who wins.

If the homemade product does not work for them, they can always chuck it without guilt. The bargain price they got it at was low enough anyway.

6. The perceived value of the product is different from your price.

Just like beauty is in the eyes of the beholder, value is in the eyes of the consumer. Forget need, want, or wish — people will only pay the value they perceive your product is worth.

Think of the quilt seller. She procures the cloth, teaches herself and her artisans to stitch the patterns so that each quilt is unique. The size, material, and effort decide the price. Then she added a charge for the uniqueness. After all, it is a feature worth coveting.

The challenge is when the customer does not share her views. For them, everything but the fact that it’s a single-edition piece matters. Is it warm and wide enough? Sure. Eye-pleasing patterns? Great. Then it’s a good buy minus the cost of uniqueness.

Ok so far. Then how to deal with it?

Mimic some of these SMO behaviors to get bargaining leverage for your products.

1. Create hard-to-replicate items — uniquely your own.

The market should not be able to catch up for a few years until you’ve had a head start. Create a product that saves people time, is aspirational, and sets trends.

2. Once a customer shows interest, be firm on your price and steer them towards the benefits instead

— unique, handcrafted, best materials, small batch, helps artisans, specially sourced, safe, meets standards. The list can go on.

You know the USPs of your product best. Some will be convinced. Some will walk away. Be prepared for and accept it.

3. It is always good to have a volume and price matrix ready should they push hard.

Tell them how many units of an item they would need to buy to get an X % discount.

That will either shut them up or clock you a good sale.

4. Respect your creation, the hard work, and the process behind it.

There are all kinds of gimmicks and tricks sellers use to sell cheaply — cutting corners on quality or quantity and making false claims, among others.

You might make good initial sales using the same tricks, but are you really that kind of a business?

5. Take the help of a growing community of dedicated home business owners creating products in small batches with their own hands.

Items that are locally made, produced with zero waste, use resources judiciously, and are created by women are increasingly getting eyeballs from conscious consumers. Use social media to find them and grow.

It’s your time to shine. Use it well.