If you were to open a sailboat supply store would you...
a. Market to nearly-homeless live aboards that never leave the dock and never spend money.
b. Market to better heeled live aboards that maintain their boats to a good standard.
c. Market to racers. One design or larger?
d. Market to the appearances set that spends $$$ without knowing what things are worth.
e. Market to long distance cruisers.
f. Market to DIYs.
g. Market to "average joe" weekend sailors.
h. Market to all of the other "catagories."
You would also look at each inventory item and try to determine how many you will sell and whether the customer is likely to successfully seek that item elsewhere. Clearly, we are willing to pay too much sometimes, for convinience; 7-11 learned this early.
I'm not about to say what's right, but you would very carefully add up what each group spends and how much margin each group will generate, and take a composite approach. I believe that is what we see. Some ridiculous over pricing and some competitive pricing.
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Case in point. 30 years ago, when I started rock climbing, climbing gear was sold in specialy strores. Yvon Chuinard started a hardware company called "Chuinard Equipment"... but he sold the equipment company (became Black Diamond) and put his energy in Patagonia Clothing Company, because life-style clothing is where the money is. North Face used to make climbing gear; now 98% of what they make is not really very suitable for climbers. It is lifestyle clothing equipment, designed to look good in the mirror. Junk, for real climbing. REI (recreational equipment Inc) was started by several Seatle climbiner, including Jim Whittaker (first American up Everist) so that they could get climbing gear wholesale, but now days I visit REI and see that I have a far greater selection of climbing gear in my closet; they realized they make money on ski parkas and stuff for the climbing gym, not on hard-core gear. I had a friend that started a climbing gear store, that morphed into a ski-wear store in one season. That's where the money was.
So that is why we see some much overpriced clothing at WM. Easy money. Having a good selection of sanitation hose or obscure fittings... not so much. If the catalog has an expensive and less expensive version, they stock the more expensive one, since you are buying convenience; if you were cheap and had time, you would have shopped around.
I don't fault them. I buy there when it makes sense to me.
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Is it a high-class activity? Who cares. However, bricks and mortar stores logically market to that segment.