Penny wise…Pound foolish

Today I drove past the spot where a balloon and party store used to be.  Yes, used to be as in no longer in business.  This was the same balloon store where I bought a batch of red, white and blue balloons to both decorate and hand out to kids as part of the grand opening of my first store back in 1991.

Funny how some moments are seared in your memory…I had called around and gotten prices on a quantity of balloons before placing an order with the now defunct business.   When I called to place the order,  I specified a red, white and blue mix rather than assorted colors.  I didn’t think there was anything unusual about my order.  The balloons arrived and we used them.

Then the invoice arrived…the price was several times what I had been quoted so I called, assuming a simple mistake which would be corrected.  No, I was told that because I wanted only red, white and blue (and we all know how RARE that particular color mix is!) it was more expensive.

No, I wasn’t told of the higher price when I ordered the specific colors and, having often seen packets of this exact color combination for sale everywhere including discount stores, I didn’t expect there to be a surcharge for this mix.

My position was basically met with a big, “Too bad, that’s the price”.  I then added that in fact, I would pay this invoice but that perhaps they might want to reconsider given that this was only the first of many stores I was planning to open and someone would be providing balloons for all of those future locations as well.  That was met with the same “Too bad, that’s the price” type attitude.

I did pay the invoice.  I did open more stores…7 more that same year, 35 over the next few years and I did buy red, white and blue balloons for every opening – never from this particular vendor.

I often have wondered what the owner of that balloon store thought as he heard all those radio and television ads.  Did he ever kick himself for not working with me to find middle ground?  I didn’t relish the thought of having to again shop for the same item (this is before the advent of internet shopping).  I had a lot of balls in the air in those days and vendors who worked with me were rewarded with many years of loyal business.

Are you being penny wise and pound foolish in your pricing structure?  Back in 1991, not all businesses were as cost conscious as I was, but today, most businesses are more mindful of spending.  Where it’s necessary for you to make a profit, it’s also necessary for you to build value and relationships so you can be in business going forward.  Let’s call this “The lesson of the balloon store that WAS.”

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