Inconsistent Pricing can be Confusing to Potential Manufactured Home Purchasers

“Manufactured housing industry, we’ve got a pricing problem.” – (I say “we” as I’m sorta in the industry).

No, our prices are not too high. The problem is the pricing is inconsistent. Purchasers have no idea what price a manufactured home should sell for. Therefore they tend to go from one retailer to the next trying to get a low price on the same size home that they are desiring to purchase. As a result they often purchase a particular size of home at a much lower price than another of the same size, sometimes not realizing that all same-sized manufactured homes are not equal.

Buyers will always shop for the lowest price on any large purchase item. However, when pricing is similar, a customer will usually choose the retailer that he/she feels most confident with. A professional who negotiates a sale and treats customers in a professional constructive manner is likely to sell more homes at a higher price than those who sell price only. Pricing is an integral element in “value,” but it should not be the only consideration when a customer is making perhaps the biggest decision he or she will ever make. “Professionalism trumps pricing.”

It is suggested that the retailer mark-up all the available factory options and provide each member of the sales staff a copy of the entire factory option list with a retail price for options directly from the factory wholesale price list. Your philosophy should always be, “You are entitled to a profit on everything you sell.”

Retailer’s sales persons should understand the company;s pricing philosophy and advise shoppers that a base price may be negotiable. However, the negotiating of a lower price should only be based upon the likelihood  that  the customer is really a “buyer” now or in the future.

Negotiating a lower price with a buyer can be “deal breaker” if not handled properly. Here are some tips that may be helpful:

• Establish a “down to price” for every home. This is the absolute lowest price you will accept on any home. Make sure everyone who negotiates pricing knows exactly what this bottom price is. Never “dive” to that price.
• Price reductions should be in the $100’s, not in the $1,000’s. Customers have no idea what your profit margins are on manufactured homes. If you drop prices in large chunks, he or she will assume you must have a large mark-up to begin with and will not be happy until you drop the price again.
• Quite often a customer wants the self satisfaction of knowing he or she has done a good job of getting you to lower the price, not necessarily the amount you agreed to accept. That being the case, you should never quickly lower a price. It should appear that price lowering is painful to you. And you are having a difficult decision to reduce. After all, your sales commission is typically reduced $20 to $25 every time the piece is reduced by $100. The customer must feel he or she has won the negotiating battle. You should commend the customer on his negotiating skills.

The bottom line is this: “The price should be fair to both the buyer and seller.”