1. Beyond the Dollar Amount: Pricing Strategy
A Case Study: Pricing the Catholic Charities Community Services Thrift Store
Beyond the Dollar Amount:
Pricing Strategy

2. Pricing Strategy Defined:
A pricing strategy is a plan of how to use pricing as one of the drivers of your business, it incorporates many other factors than just the bottom line price, including:
the mission
the target customers
inventory management
brand management
location
facilities
staffing

3. Our Pricing Strategy Detailed:
Our Pricing Strategy reflects our four-stores-in-one concept: each store has a unique pricing and discount structure to accommodate separate business models and plans. Each strategy however, is strongly defined by
our mission to provide low cost goods while maximizing revenue for programming,
benefit the residents of the immediate neighborhood,
keep merchandise flowing through the store quickly,
build our reputation as a destination thrift store,
reflect the community we are located in,
and to maximize our facilities and staff strengths and minimize their weaknesses.

4. Discounts
Discounts are an important part of our pricing strategy. Daily changing discounts are offered primarily to encourage shoppers to shop frequently. However, discounts also help regulate the flow of merchandise and build customer satisfaction and loyalty.
Today’s Sales daily discounts offered based upon inventory
and other factors including holidays and seasonality
Senior Citizen Discounts
Client Discounts
Targeted Outreach Discounts
Promotional Event Discounts
We do not haggle prices, nor do we barter. Staff persons, including managers, are not allowed to offer any other discounts or price changes to individual shoppers.
Price adjustments for items that may be priced to high, for any reason, are done after we are closed for the day, not for individuals on-the-spot.

5. A Quick Look at Our Pricing The Catholic Charities Community Services Thrift Store
Thrift Store Clothing Prices: Category Pricing
All Thrift Store Clothing is $1, $2, $3 or $5 each
Boutique Clothing Prices: Value-based Pricing
Boutique Clothing is priced as a percentage of their know or estimated retail value, typically 50% to 75% off
Furniture Store Prices: Modified Category Pricing
Furniture Store pricing is a combination of category pricing, with a scale for quality and condition, an estimated 10% to 30% off other second hand stores
Antiques & Collectibles Prices: Value-based Pricing
Antiques & Collectibles are priced at or slightly below other antique stores, a value-based system subject to perceived value

6. Thrift Store Clothing Prices: Category Pricing
All Thrift Store Clothing is $1, $2, $3 or $5 each, based upon categories: Children, Women, Men, Coats
Thrift Store Discounts:
Daily: Thrift Store Clothing is marked down to $1 after a day or two, for most items.
Special Discounts: based upon seasonality, excess inventory, etc
Senior Discount
Occasionally, selected Thrift Store Clothing is included in Today’s Sales
Planned length of time in store: one or two days for most items
Merchandise: high quality, gently used clothing and other necessities
Price Range: $1 to $5

7. Boutique Clothing Prices: Value-based Pricing
Boutique Clothing is priced as a percentage of their know or estimated retail value, ranging from 50% to 75% off
Boutique Discounts:
Daily Discount System: Items move though a series of discounts based upon length of time in the store. Price tags are punched to indicate the current discount.
Today’s Sales Discounts: Every day we offer some type of discount in the Boutique which may include: 30% Off, 50% Off, BOGO (Buy One Get One) Free, etc.
Senior Discount
Special Discounts: based upon seasonality, excess inventory, etc
Planned length of time in store: one month or less, weekly markdowns
Merchandise: New items, luxury items, vintage, specialty, and other unusual or high value clothing and accessories
Price Range: $1 to $1,500+

8. Furniture Store Prices: Modified Category Pricing
Furniture Store pricing is a combination of category pricing, with a scale for quality and condition
Example: Sofas typically range from $35 to $150
based upon condition, etc
Furniture Store Discounts:
Daily: Items are marked down 30%, 50% and finally 75%, typically based upon length of time in store and inventory levels.
Excess Inventory: Pick it up Today and Save 25%, or more
Senior Discount
Planned length of time in store: a few days, up to a week or two for more expensive or unusual items
Merchandise: gently used high quality furniture, house wares, regular art, electronics, lighting, floor coverings, limited medical equipment, books, records and tapes.
Price Range: $1 to $500+

9. Antiques & Collectibles Prices: Value-based Pricing
Antiques & Collectibles are priced at or slightly below other antique stores, a value-based system subject to perceived value
Antiques & Collectibles Discounts:
Often included in Today’s Sales: 25% to 50% Off, BOGO, etc.
Weekly: Items are marked down 30%, 50% and finally 75%, typically based upon length of time in store and inventory levels. Occasionally, price adjustments are done if the item was originally priced to high or damage occurred in the store.
Red Dot Sale: 75% Off Selected Items
Senior Discount
Planned length of time in store: varies widely based upon value, market, and other factors, especially our strategy of becoming a destination thrift store
Merchandise: Antique furniture and other antiques. Collectibles such as glass, ceramic, metal, etc. Art, sculptures, paintings, mirrors, etc. Fine furniture and other high value items.
Furniture Price Range: $10 to $2,000+
Collectibles Price Range: $2 to $900

10. How do we compare?
In 2006, we conducted an informal study of our prices as compared to estimated original retail prices and also to Goodwill and Salvation Army.
Compared to Estimated Original Retail Prices: Our prices were on average 87% Off original
Compared to the published price lists of both Goodwill and Salvation Army: Our base prices, and average prices were lower, sometimes significantly
Notes:
Since that time we have further lowered our Thrift Store Clothing prices to $1, $2 and
$3 each.
We estimate that our Boutique prices are up to 50% Off similar store prices.
We estimate that our Furniture prices are approximately 30% Off similar store prices.
We estimate that our Antique prices are similar to other antique stores.

11. Pricing Strategy History
FY 2001: Category Pricing. Most items were $1 each. No price tags.
FY 2002: We introduced value-based pricing on a small scale. We began ticketing higher value items.
FY 2004: We had integrated value-based pricing on selected items, with modified category-based pricing for clothing.
FY 2006: We opened an Antique Shop on the 2nd floor. All items, except regular clothing, were ticketed.
FY 2007: We continued to expand value- based pricing to all categories adding a “mini-boutique” concept. NOTE: In FY 2007, we began liquidating merchandise.
FY 2008: Renovation. Moved to temporary location.
FY 2009: We re-opened (4 months late) with a “four-stores-in-one” concept that includes a variety of pricing methods.
FY 2012: Launched Online Stores
FY 2013: Store Closed in March. Revenue prorated for 12 months.
Revenue History
FY 2001: $220,000 approximately
FY 2002: $270,864 ADS: $903
FY 2003: $253,988 ADS: $857
FY 2004: $371,572 ADS: $1,233
FY 2005: $358, ADS: $1,244
FY 2006: $384, ADS: $1,280
FY 2007: $384,300* ADS: $916*
FY 2008: $274,626* ADS: $938*
FY 2009: $188,714* ADS: $682*
FY 2010 $350,821 ADS: $1,253
FY 2011 $409,249 ADS: $1,348
FY 2012 $478,804 ADS: $1,417
FY 2013 $551,333* ADS: $1,631*
ADS = Average Daily Sales total

12. Who determines prices?
Thrift clothing, books, and a few other miscellaneous items follow a category price list.
All other items are priced individually using established guidelines by trained staff.
Boutique items and regular house wares are priced by the cashier and assistant manager.
Unusual items, including Designer Clothing, Art, Antiques, and Collectibles are researched and frequently priced by the manager.
Furniture is priced by the manager and assistant manger.
Occasionally, a volunteer appraiser or expert is used to assist in pricing high value items.
In the future, we plan to use trained volunteers to assist with pricing

13. The Fair Pricing Challenge
How do we determine a fair price when original retail prices may vary from $1 to more than $6,000?
Recent Example:
A new gown, $6,000 price tag attached.
Originally priced: $1,200, now marked down to $600.
Is 90% off, or $600 too much or too little for a $6,000 gown?
If we ask too little, are we providing good stewardship if the donor is expecting us to raise money from her donation?
Is it offensive or insulting to display it in this neighborhood at that price?
Should we take it elsewhere so we don’t have to worry about offending anyone?
Does the neighborhood deserve the chance to acquire something they may not have access to otherwise?
Our solution is to price items based upon their original value, and mark items down through an formal system. Although some comment the prices are high, most agree that our prices are low compared to other stores and appreciate the opportunity to buy luxury items.

14. Another Challenge: Dealers and Resellers
In 2002, dealers formed the core of the business and were the focus of discounts and other incentives. Additionally, staff held items for the dealers because they were “good” customers. The challenge was how do we retain them as customers but create a system that benefits the community more? When items were brought out for sale, the community customers literally had to fight with the dealers for the best items. Our primary mission is to deliver donated goods to the residents of the South Bronx (and other needy New Yorkers) at low cost. The residents of the community did not think of us as a place to get great quality items. The dealers scooped up the good stuff by 11:00am and would leave to resell them in other markets. Our revenue for the day dried up by noon. As we slowly raised our prices closer to industry standard, the dealers purchased a little less, but the community customers were finally able to find a lot of great quality items and purchased more. By 2005, we had gained a reputation for having great items every day. Our customer base had changed dramatically, we were now a community thrift store rather than a dealer outlet. We became a “destination store”. Today, far more goods remain in the neighborhood than ever before.