Reasons Why Price Guns Are an Important Part of a Warehouse

If you’re running a warehouse and need to price your products for sale, there are many reasons why using a price gun to quote prices is a smarter solution than the alternatives. See 6 reasons why here.

If you’re a warehouse manager or owner, you know how important it is to keep track of all your stock. But are there other ways you can use price guns to be more efficient in your warehouse?

Jeff Sullivan said “price guns are the absolute gold standard for warehouse management” so let’s look at why you need to have one.

The price gun is a device that you attach to warehouse displays or keyboards that will show you current prices of all stock. It is a great tool for stocking shelves, checking pricing, and calculating discounts for sales. With a price gun, you’re able to keep track of inventory, reduce errors because you have real customer data on one device, and drive cash to your business. These are the main advantages of using price guns.

At More.com, we use price guns to monitor each shelf and determine accurate prices for certain products, such as toilet paper, at a bid price. We use this information to price our products before they are displayed to the public or sent out to retailers. Using a price gun ensures we get the lowest-priced items on the shelves by giving pricing data for each product.

You can also apply a filter on the price gun that will tell it the products you don’t want to bid. You can select products you don’t want to bid on from within the Price Copier software.

The primary problem with a price gun is that it executes based on a pre-determined bid price. This means that while you can change the price of your products, if the price for any other product on the same shelf gets too high, you will reduce the bid price for that same product to achieve the same profit. This is not ideal because a higher sell-through bid price could hurt you in a product’s short term, even if it’s beneficial in the long term. By replacing the bid price with a pre-determined price, we force any product changes to be for the best interest of the business.

Hiring a price gun is much more scalable since the choices you make in your pricing model are based on specific goals for your business. For instance, you could run a price gun every weekly to set your overall average price per order. You could set a price gun to determine how much you want to charge for in-house inventory, and then set another price gun for clearing out products you don’t want to sell at all.

The price gun aggregates data over time to show you trends for each product. You can use the data to set the recent average price for each product to show consistent, realistic pricing.

Before we look at the other options, let’s look at the pros and cons of using price guns.

Traditional price guns form the basis of price planning and price negotiation, used by both good and bad customers. Usually done with pencils and/or paper, the price gun creates a basic order of price per product, and possible discounts — presumably offered to the manufacturer. Calmulti uses a color-coded system based on product category (for example, green means “cheapest”) to total up all the prices and then calculate the discount.

Price guns are usually great at forecasting demand. For example, if you ask a price gun to put together an order to sell 100 tires per month, it will predict that demand might be 500 tires a month, therefore pricing the order accordingly. On the other hand, if the manufacturer offers a typical 60% discount, the price gun will anticipate an order of three months’ worth of tires and price accordingly.

However, price guns aren’t perfect at predicting demand on the spot. The spot price could change before or even after the order is placed — that’s why calculating the discounts factor into the forecast to take into account any potential variations. If you still have pencils and a list of products but find it difficult to be as accurate as a price gun would be, you could also use a price tracker.

Price trackers make use of various height-adjustable sensors that record prices and calculate discounts. The average cost per unit and bar code data are used to update the monitor and adjust the position based on any changes or variations.

Just like the traditional price gun, the price tracker records prices and calculates discounts, but on a larger scale (up to several hundred per brand) to account for any variations.

There are also price tracking services that offer summary reports on your data. WeTrust uses AI to supplement your manual data by continuously updating a dashboard with stock prices and tracking sales orders. Since harnessing AI is a complex process, you’ll need several consultants on retainer.

The last option is more manual, but has the potential for much more accurate forecasting. traders keeping track of social media feeds, where prices change rapidly and can be significantly driven by demand. They may contain information on the current market conditions as well as historical pricing data.

To find out, we caught up with David Lynch, the store manager for Progressive Wholesale, an online retailer of small-batch perfumes and colognes. He shared five insights into how to use price guns.

The typical process for companies that operate warehouses and retail stores is for someone in management to make the final purchase call from the warehouse or retail store and pass the order along to one of their managers for distribution. According to Lynch, this can actually have the opposite of the intended effect. Having someone in management solely decide prices makes it much easier for managers to hide behind a price gun, and they can claim they are making all these decisions on the fly. “Now when there really are orders to be made, whether they’re per the customer or per the product, it’s so much easier for managers to hide behind the price gun.” — David Lynch

In contrast, by making the final purchase from the warehouse or retail store directly from the customer, you’ll make sure the decision-making process is informed by the current state of inventory. Everyone involved in pricing will be situated closer to supplying your product, allowing them to see prices changing minute to minute. And given why people shop offline, they don’t even need to take time off when their gadget runs on battery power. — David Lynch

As with electronic gadgets, it’s pretty easy for your warehouse to become cluttered. “Railroad tracks aren’t half bad for displaying prices,” says Lynch. But imagine all the fun if large touchscreens were installed in each of the parts of that track, which provides an extremely fast and efficient display of pricing with low latency and flawless results. — David Lynch

With product displays, you can use a price gun to choose the exact price per quantity you’d like to stock.