Example, laptop - normally $995, on sale now for $499. Save $496
My understanding is that businesses never sell at a loss.
So, selling at $499, they still make money.
Extrapolating this, selling at $995 is purely making a whole lot of profit.
This example is offered by a long running business that will not be closing down anytime in the next few years. The business has a multi million dollar turn over. So they are not selling at cost to have short term bulk cash.
Is this what is called treating customers with contempt?
I notice supermarkets putting up the price of an item by 40% then the next week have the item at the price is was the previous week and claim that the customer is saving 40%.
A special that is not a special.
This is not true. Businesses don’t sell at a loss consistently, but they might sell certain items at a loss to get customers to buy with them in an attempt to drum up more business later. The items they sell at a loss are called loss leaders.
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** draw customers into a store where they are likely to buy other goods. The vendor expects that the typical customer will purchase other items at the same time**
I go into a store to buy a laptop, not to buy other items.
I go to a store to buy a bed ensemble, I am not also going to buy a bedside cabinet, or lamp.
I buy a washing machine, I am not going to buy a dryer as well.
You’ve never walked out of computer store with anything else but a laptop? Not a USB cord or a pair of headphones or an extra battery or any number of other things that go with a computer? Those are likely marked up.
If you haven’t, I can guarantee others have. i rarely see people walk out of computer stores with just a computer.
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No, I have never done that. I am disciplined and only buy what I intended to buy.
Not swayed by fast talking sales people.
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Good on you. The strategy didn’t work on you. But on average it works because businesses use loss leaders a lot.
But also, in the case of computers, they get outdated pretty quickly because of changes in technology. Sometimes, companies price them to sell because the next iteration of the technology is due out, and they don’t want to compete with the old technology on price.
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I think this too. Specifications of hardware are updating all the time.
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Yes. I detest this control over us consumers. The other trick is “CLOSING DOWN SALE” everything must go. Those places are rarely closing down. Oh and then also there’s the “TODAY ONLY” trick
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Sorry to me special or unspecial deals are irrelevant as I buy what, not a “deal” I obviously look for a good price (but if its too good to be true it often is) when I have decided what I want and near to the time I have the funds to buy I buy.
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So much to unpick here.
First, the sale price you mentioned. There will be lots of reasons behind such an offer: surplus stock; new models being introduced so a need to get rid of old models; need to drive up footfall as this typically leads to other sales; publicity; manufacturer promotions; need to drive up revenues if the business has a cash shortage; etc.
Second, this may not be at a loss. Typical retail outlet margin is between 40-60% depending on the products. If this is a manufacturer supported sale (and almost all are) then its likely the manufacturer will reduce their product price to the retailer - hence allowing the retailer to still make profit. My guess is that you’d be surprised how low the actual manufacturing cost of a laptop is. The manufacturer has to add in a share of other costs - marketing, tech support, customer service, transportation, etc. It can often offer the retailer large price reductions for specific promotions.
Third, even if this sale price is not making an on paper profit, wider business management factors may make the sale offer worth doing (see above reasons for putting a sale on). Businesses measure their year end profit, not their item by item sale profit.
Fourth, if the non-sale price is an accepted market price then this is the price people are willing to pay for a laptop. Where is the contempt there? Competitor retailers and manufacturers could lower their prices if all the customers thought $995 was so high that it was insulting.
Lastly, the example of hiking prices to then soon offer an apparent discount is banned in most countries as being misleading discounts. It does happen but it can be reported as it violates consumer protection laws.
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Likewise - I want just what need and that’s it. But then I am a stingy old Scotsman.
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I have no idea how specials work but I do keep an eye out for end of aisle bargains at the supermarket, they are often clearance items and sold for ridiculously low prices just to get rid of them.
For example a couple of large fluffy bath towels at $2 each, an egg poacher for about the same price (it would have been worth buying as a stainless saucepan just to throw the poacher part away), a bamboo steamer for 50c (wish I’d bought two), a plastic bucket 20c (they’d over ordered).
All things still in use today.
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You kind of don’t really need specials today because stuff is generally much cheaper than they were in the 1960’s. The days of saving up for 5 years for anything and keeping it for 40 years are well gone.
Washing machines and fridges are way cheaper.
TV’s Computers mobile phones (if you stick with a good basic one) are accessible for teenagers now days.
Cars are realy cheap. Overseas holiday deals.
Stuff has come within reach of the masses as it were which is good.
So it is only ocassionally I see a special on a product I may not have thought I could afford and I will consider it especially on larger items but I know my budget and very rarely take chances.
I always keep a sum safe for things like teeth and glasses as they are not subsidised here.
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