As the abandoned locker door is opened on A&E’s Storage Wars, the teams have only a few minutes to decide if there is anything of value among the old furniture, books and mystery boxes. While you probably don’t spend your days sorting through castoffs, small-business owners must often make quick decisions without having all of the necessary information.
Just like on Storage Wars, informed decisions on purchasing and pricing is often the difference between being in the black versus the red. On each episode of the show, professional buyers bid on storage units and then resell everything of value at their own consignment stores or to buyers directly.
Related: Why Some Entrepreneurs Are Turning Pricing Power Over to the Public
Here are three things you can learn about pricing your products and services from Storage Wars, without even having to step foot into a storage unit:
1. Get the best price possible from your vendors. The teams on the show often act disinterested in a locker or even hide behind another bidder just to get the lowest price. While feigning disinterest might not be the best tactic for your business, you should have a firm budget in mind before negotiating with vendors.
Jarrod Schulz and Brandi Passante, a team on the show who own the Now and Then Secondhand Store, often allow their emotions to take control of their wallet and while sometimes this works, they often end up paying too much.
Negotiate with all vendors for the lowest price by asking for cash discounts, volume discounts and even take a page from consignment store owner Dave Hester‘s playbook by being willing to walk away empty handed.
2. Consult experts on pricing and sales trends. Instead of just slapping a price tag for a few hundred dollars on an old desk, regular bidder, Jeff Jarred, took the piece to an antique dealer to have it appraised and found out that it was worth over $5,000.
Use all of your available resources when setting your pricing structure, including industry experts, competitor prices and nationwide sales trends. Although Hester was convinced that an envelope full of stock certificates was going to make him a millionaire, an expert was able to quickly tell him that none of the stocks were redeemable.
3. Know what the product is worth to your customer. Who would have thought that someone would pay $500 for three pairs of tiny rose colored glasses for chickens? When determining your pricing, know the value that it has in the current market to your customer and what they are willing to pay.
Related: Why You Can Raise Prices Now
Many of the teams write off lockers containing surfing gear, tools, and contracting equipment as junk. But Darrell and Brandon Sheets, a father-son team, often realize the value that these items have to people in those with those interests and take home significant profits as a result.
How do you price your products and services? Share your best pricing tips in the comments.
Jennifer Goforth Gregory has over 18 years professional writing experience and specializes in writing about small businesses. Her work has been published MSN Money, FOX Business and the Intuit Small Business Blog and American Express OPEN Forum.