As any business person will tell you, the customer is king (or queen). Over the past few years, those same business people have been struggling to get those regal consumers into their stores and to hand over their hard earned paychecks, paychecks that feel smaller and smaller and harder and harder earned. As Stephanie Clifford describes in her New York Times article “Knowing Cost, the Customer Sets the Price,” businesses have implemented a number of creative pricing strategies to try and convince consumers that it is worthwhile to buy that watch or jacket that they’ve been eyeing for a while. Consumers, for their part, have realized their buying power, which can make businesses more likely to negotiate prices that once seemed set in stone.
The question is “Who is going to make sense of these transactions? How are businesses going to keep track of their ever fluctuating profit margin (if they’re lucky enough to have a profit margin that is), when that margin potentially is shifting on a customer by customer basis? Or, if the business does keep profit margins stable across product lines, but makes across the board price cuts to entice shoppers, who will help decide how low this can last? Accountants, that’s who! It will be accountants that slog through thousands of transactions with different profit margins to ensure accurate financial reporting, and it will be accountants that advise businesses of the profit margins they need to stay in business while also making sure shoppers buy their wares. So go out into the world young accountants, and help resuscitate the American economy.
By Matthew Irwin
A link to Stephanie Clifford’s article “Knowing Cost, the Customer
Sets the Price,” can be found here:
Hello ZGAS Members,