Pricing FAQs (Demystifying Pricing)
PART I: Demystifying MSRP (aka "List Price")
What is MSRP? MSRP stands for Manufacturer's Suggested Retail Price (also known as "list price"). For virtually all products, MSRPs are published by the manufacturer of each product. Unless a product is our own brand, we do not set or inflate the MSRP. We report it. For our Blick and Utrecht brand products, the MSRP is established based on the MSRP of the third-party brand that most closely compares to ours in quality. There are also a few vendors (most notably, Sherwin-Williams/Krylon, Crayola, and 3M) that do not provide MSRPs. In these few cases, the "list price provided" is admittedly subjective.
Does a discount off the MSRP represent a sale price? Not necessarily. A typical example would be that a product has an everyday discount of 30% off the MSRP, but during promotional periods it may rise to 40% off the MSRP. Other products might be 40% and 50% off, respectively, etc. Paint lines often observe this type of format. Some products may never be promotionally priced.
Are the large discounts off the MSRP offered by Blick and Utrecht real? Yes. Many retailers, if not the bulk of them, use the MSRP as their everyday price. You will find this to be the case at big box craft stores. Blick, Utrecht, and other discount art suppliers offer significant value to the consumer by offering steep discounts. Both Blick and Utrecht (and our like-minded competitors) work hard to make sure artists get great value.
Why is the MSRP valuable to the consumer? As long as the MSRPs provided by the manufacturer are reported honestly by the retailer, the larger the discount advertised off the MSRP is, the lower the price to the consumer will be. In other words, if one retailer prices a product at 50% off the MSRP and another prices it at 40% off, the retailer at 50% off the MSRP is indeed charging a lower price for that particular product.
PART II: Location-based Pricing
How do we set store prices? Our local retail staff comparison-shop all discount fine art supply competitors located within 25 miles of each of our stores. We adjust our prices based on these efforts to ensure that our customers are getting the best price. Further, we adjust prices toward online prices to ensure that after shipping and handling, preferred card discounts, and other factors are taken into account, the online and retail prices are similar overall. Blick and Utrecht guarantee to match the price of any art supply competitor within any store's reasonable selling area.
How do we set online prices? Online prices are based on comparison-shopping at other online resellers. Blick's online store adjusts its prices both up and down every day based on these comparisons. In this way, we try to take price out of the equation, making the consumer's purchase decision come down to service and selection, where we believe Blick is superior. Eventually, Utrecht's online store will follow this approach as well.
How do we set catalog prices? Annual catalog prices are set once, based on expected annual price increases from manufacturers. Unless a manufacturer has a very large price increase during the year (which is very unusual), these prices are honored throughout the year, but are typically higher than our online prices. Scholastic (K–12) and other institutional buyers are encouraged to contact our bid sales staff to establish a discount program off the annual catalog prices. Prices in the quarterly sale flyers are set based on the online price at the time of publication, but also include seasonal promotions offered through vendors.
Where do we charge the lowest price? The answer varies by product and transaction size. Some products have shipping characteristics (bulky, flammable, heavy, etc.) that make them cheaper at retail. Sometimes, there are products that are priced lower in a particular market at the request of a large customer (for example, an art school). However, as a general rule, larger transactions that can achieve the free freight threshold (usually set around $100) are less expensive overall online. For small transactions, it is almost always more economical within the Blick/Utrecht system to buy at a retail store to avoid shipping and handling charges.
Why don’t we just charge one price? Our policy is that each store must be market-competitive AND profitable. To us pricing is a local market consideration. With different cost structures and different competitors, a one-price approach would force us to close some stores because they could not break even at the lower prices offered at stores that have a more advantageous cost structure. If we raised prices in the low-cost locations to protect the high-cost stores, it would mean those other stores would lose volume and profitability because they would be charging a price higher than their local market would accept.