Pricing Wars - tanTALK

Beachbum110 · 02-25-2005, 03:24 PM

I'm sure this issue has come up several times on this site... but I am getting extremly aggrevated with the tanning business. Once we were 1 of 3 salons, in just two short years we are now 1 of 8 as another new salon opened this month.

We re-did our pricing, added membership discounts and were feeling really exceited about our new pricing structure.

Now... the new salon has some of the same equipmetment we have. On our high-end bed we are charging $18 per visit and just found out they charge $12 for the same model (except ours is 3-years old).

Once our tanners discover the $6.00 discount up the street, I can kiss them good-bye.

Do we now drop our pricing to compete with "Low-Ball Tanning Inc"... because he is new and everyone likes the new exciting places.... its driving us nuts.

What does everyone suggest...?

It amazes us that someone wants to build a new tanning salon in a town where there was already 4 existing places within a 2-mile radius.

Thanks and I await some feeback.

engfant · 02-25-2005, 03:36 PM

I say, sell out to some JERK, let them run the place into the ground then offer them 1/2 the money they paid for the place to take it back. Honestly, I don't know what I'd do if another 6 showed up in my area. Fortunately, most of my comp. is short term and they change hands all the time.

No one trusts a place that is constantly turning over.

glamarama · 02-25-2005, 03:39 PM

its like the marketing text books say - you go out of business UNDERpricing . . . you know what you have to charge to make a decent profit, let him drive himself into the ground. . .

if all he has is lower prices, you will outlast him for sure, when he doesnt have enough $$ to change his lamps, buy new equipment, pay his mortgage, whatever!

Kay · 02-25-2005, 03:46 PM

Do you have room to offer some other services? Body wraps, nails, massage therapy....

_________________
[ This Message was edited by: Kay on 2005-02-25 15:48 ]

Beachbum110 · 02-25-2005, 03:55 PM

My wife feels the same way... keep our pricing as-is, but I hate to see a big bed sit idle. The funny part these new salons used us a business/pricing model, and then low-ball it. The book says not to get into a pricing war because it degrades tanning... but I don't think the new guys read the book.

The busy season is when we need to build our nest egg to offset the slow season... now we'll be loosing a chunk of that potential revenue to these other stiffs that came to town.

Selling is not an option for us... a) we paid waaay to much for the salon from the previous owner a few years back... and b) with the new equipment loans and liabilty we wouldn't recoup our initial investment and will loose tens of thousands if we did.

These new people should thank my mother for raising a nice catholic boy... because the Italian anger says to go throw a nice molitof cocktail through their window. However, that little voice of reason says "jail is not a fun place"... so I take my anger to this board to hear from others who had to deal with this type of situation.

Thanks and I look forward to more replies.

Beachbum110 · 02-25-2005, 04:01 PM

Yes we have room... and plan to expand our services. We have yet to get into the spray tan game becuase we want to offer more spa services. Something to offset the slow season.

TanningEmporium · 02-25-2005, 04:20 PM

Dont put yourself in the game.
Run your business as you know you should.
Have a salon here giving tans away, dont expect her to be around long.

Standby · 02-25-2005, 05:38 PM

[ This Message was edited by: Standby on 2005-02-26 12:42 ]

JeffinKC · 02-25-2005, 05:52 PM

I am not sure about your financial situation but if it was me I would sell the bed in question and purchase a new bed your competition does not have. There are now many VHR beds on the market that are high in quality at a reasonable price.

I would also very seriously consider adding sunless as well as possibly some other services. It is hard to compete on price so you have to offer more. I might have more suggestions if I knew your equipment mix and your competitors.

Hank van · 02-25-2005, 06:21 PM

from experience He will not go out of bussiness he will make it up in volume. your still paying rent and labor if your bed gets used or not. Tanning is getting very competitive unfortunately people only see price. if your bed is three years old it has paid for it self already price it cheaper than his buy a new bed that he doesn't have and make your new bed 20 per visit.

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02-25-2005, 03:24 PM	#1 (permalink)
Beachbum110 Join Date: Dec 29 2004 Location: MA Posts: 190 Rep Power: 20	I'm sure this issue has come up several times on this site... but I am getting extremly aggrevated with the tanning business. Once we were 1 of 3 salons, in just two short years we are now 1 of 8 as another new salon opened this month. We re-did our pricing, added membership discounts and were feeling really exceited about our new pricing structure. Now... the new salon has some of the same equipmetment we have. On our high-end bed we are charging $18 per visit and just found out they charge $12 for the same model (except ours is 3-years old). Once our tanners discover the $6.00 discount up the street, I can kiss them good-bye. Do we now drop our pricing to compete with "Low-Ball Tanning Inc"... because he is new and everyone likes the new exciting places.... its driving us nuts. What does everyone suggest...? It amazes us that someone wants to build a new tanning salon in a town where there was already 4 existing places within a 2-mile radius. Thanks and I await some feeback.

02-25-2005, 03:36 PM	#2 (permalink)
engfant Join Date: May 20 2003 Posts: 9,301 Rep Power: 29	I say, sell out to some JERK, let them run the place into the ground then offer them 1/2 the money they paid for the place to take it back. Honestly, I don't know what I'd do if another 6 showed up in my area. Fortunately, most of my comp. is short term and they change hands all the time. No one trusts a place that is constantly turning over.

02-25-2005, 03:39 PM	#3 (permalink)
glamarama I'm Banned Join Date: Jan 31 2005 Location: GTA Posts: 404 Rep Power: 0	its like the marketing text books say - you go out of business UNDERpricing . . . you know what you have to charge to make a decent profit, let him drive himself into the ground. . . if all he has is lower prices, you will outlast him for sure, when he doesnt have enough $$ to change his lamps, buy new equipment, pay his mortgage, whatever!

02-25-2005, 03:46 PM	#4 (permalink)
Kay I love Derf!! Join Date: Jul 16 2004 Location: NH Posts: 474 Rep Power: 21	Do you have room to offer some other services? Body wraps, nails, massage therapy.... _________________ [ This Message was edited by: Kay on 2005-02-25 15:48 ]

02-25-2005, 03:55 PM	#5 (permalink)
Beachbum110 Join Date: Dec 29 2004 Location: MA Posts: 190 Rep Power: 20	My wife feels the same way... keep our pricing as-is, but I hate to see a big bed sit idle. The funny part these new salons used us a business/pricing model, and then low-ball it. The book says not to get into a pricing war because it degrades tanning... but I don't think the new guys read the book. The busy season is when we need to build our nest egg to offset the slow season... now we'll be loosing a chunk of that potential revenue to these other stiffs that came to town. Selling is not an option for us... a) we paid waaay to much for the salon from the previous owner a few years back... and b) with the new equipment loans and liabilty we wouldn't recoup our initial investment and will loose tens of thousands if we did. These new people should thank my mother for raising a nice catholic boy... because the Italian anger says to go throw a nice molitof cocktail through their window. However, that little voice of reason says "jail is not a fun place"... so I take my anger to this board to hear from others who had to deal with this type of situation. Thanks and I look forward to more replies.

02-25-2005, 04:20 PM	#7 (permalink)
TanningEmporium Join Date: Jul 15 2003 Location: 213 Skyland Shp Ctr Posts: 2,613 Rep Power: 22	Dont put yourself in the game. Run your business as you know you should. Have a salon here giving tans away, dont expect her to be around long.

02-25-2005, 05:38 PM	#8 (permalink)
Standby Join Date: Oct 25 2003 Posts: 159 Rep Power: 21	[ This Message was edited by: Standby on 2005-02-26 12:42 ]

02-25-2005, 05:52 PM	#9 (permalink)
JeffinKC Join Date: Apr 21 2001 Posts: 418 Rep Power: 24	I am not sure about your financial situation but if it was me I would sell the bed in question and purchase a new bed your competition does not have. There are now many VHR beds on the market that are high in quality at a reasonable price. I would also very seriously consider adding sunless as well as possibly some other services. It is hard to compete on price so you have to offer more. I might have more suggestions if I knew your equipment mix and your competitors.

02-25-2005, 06:21 PM	#10 (permalink)
Hank van Join Date: Nov 23 2003 Location: michigan Posts: 362 Rep Power: 21	from experience He will not go out of bussiness he will make it up in volume. your still paying rent and labor if your bed gets used or not. Tanning is getting very competitive unfortunately people only see price. if your bed is three years old it has paid for it self already price it cheaper than his buy a new bed that he doesn't have and make your new bed 20 per visit.

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