I heard of a survey that stated that 34% of Americans won’t buy anything that isn’t on sale. Initially I found this shocking and surprising but after some thought I wasn’t surprised.
I often wonder: What does on sale really mean these days?
I see more and more deals that I find hard to believe are going to allow the business to be sustainable. I know about loss leaders but some of these deals appear so substantial to be loss leaders.
Examples:
My wife had received a New York and Company coupon “Save $70 when you spend $150”
Or the many Joseph A. Banks promotions like: Buy one suit get three free.
How does that work? Are they making so much on one suit they can cover the cost of three? So does that mean they are overcharging if bought individually?
The other one that gets me, especially today, is when you look at the “sale” price and it looks like it may be a fair everyday price at the sale price and then you look at what the manufacture says it normally sells for which is completely not reasonable when you compare it to what is available. Today I saw a bike that was regularly $3999.99 and “on sale” for $2499.99. If someone paid $3999.99 for the bike they would be getting taken advantage of. It is just such a misrepresentation to the customer. I could go on but I will save that for another day and another post.
I’ve shopped with my wife who loves to take advantage of her Kohl’s dollars and those deals. I guess their regular margin is so high and the volume so large they can afford it.
With everyone always being exposed to these sorts of deals no wonder everyone wants or expects a deal.
For companies that make products oversees are their costs so low due to volume and a reduce cost of labor? Not forgetting the advantage of being your own manufacturer and the cost savings by removing the middle man. I get economies of scale and don’t blame anyone for leveraging what they can. But if you can afford to run promotions on a regular basis that are purchase x quantity and get x quantity free, maybe you are just overcharging to begin with.
I don’t know their business model but can I be the only one wondering?
I like to sell everything at a fair price everyday and offer discounts when I can. It and allows us to build a relationship with our customers and reward the ones that have developed relationships with over time. Most business are in business to make money. This allows them to pay their employees and to pay their bills. If businesses are always running discounts are they over charging when they aren’t? Or is their margin so small they are relying on volume to cover their expenses and not giving them room to grow?
Only each business knows the answer to these questions.
Updated 11/29/2013
Just came across this article and I love their number one reason for not shopping on Black Friday:
1. The “discounts” aren’t real. Over 90 percent of Black Friday deals are the exact same items and prices as last year, according to a recent study. And many other seemingly discounted deals are faked by retailers to give shoppers the illusion of savings.
from the Huffington Post 9 – Reasons to Stay Home on Black Friday 11/26/2013
