Saturday, December 25, 2010

How to Stretch Your Dollar

It is through your understanding of the boutiques sources of income and, more importantly their profit centers, will you be able to negotiate your best deal.

The profit centers for both types of boutiques are different. For the designer boutiques, their primary source of income comes from the sale, or rental, of their gowns. As mentioned earlier, although they offer tie-ups with other service providers, these tie-ups are purely for the client’s convenience and do not generate commissions or referral fees.

Much as every bride would love to wear a designer gown designed exclusively for her, designer gowns are expensive as this is the designer’s primary source of income. The alternative available is for the bride-to-be to rent a ready-made gown for her wedding.

The fact that wedding gowns can be altered and that the only cost involved is the labor required to alter the gown, designer boutiques profit whenever a bride rents their ready-made gowns. This profit increases significantly the more times the same gown is rented out. This then is the true profit center of designer boutiques.

In the course of any wedding, the mothers’ of the bride and groom, the brides-maids and even the relatives will all want to look their best. This entails having evening gowns made. This is where the designer boutiques do their add-on sales for their extra income.

In the case of the one-stop boutiques, their income comes from every service they provide. Unlike designer boutiques, one-stop boutiques’ primary profits come from the sale of additional photographs.

As material costs for additional prints are low, and as clients have been known to spend as much as $10,000 extra on their wedding albums alone, such add-on sales are extremely profitable.

It therefore comes as no surprise that one-stop boutiques deliberately price their packages significantly low to attract clients with the aim of earning their profits via add-on sales. This approach is based on the fact that once a client has taken a package with a particular boutique, for the sake of convenience; the client is unlikely to source elsewhere for their other wedding requirements even if they know that the service costs slightly higher.

One-stop boutiques price their packages, and structure their entire business to enable them to gain maximum profit from the sale of photographs and add-on services.

The following table summarizes the primary, secondary and profit centers of the two types of boutiques.

Primary IncomeSales and rental of gownsSales and rental of services
Secondary IncomeSales of additional gownsAdd-on Sales
Profit CentresRental of ready-made gownsSales of additional photographs

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