Have you ever really considered what those words mean? They mean that whatever ‘it’ is, the makers of ‘it’ are now going to sell ‘it’ to you for less money than they usually sell ‘it’ to you for… which in no way implies that they aren’t still going to make a profit on ‘it’.
So if they are now selling ‘it’ to you for 50% off, and they are still making a profit, that means that they have been selling ‘it’ to you up until now for at least 60% more than it costs them to make ‘it’… and now they act like they are doing you a favor…
Pouring My Art Out 
Hubby & I used to own a grocery store. Sometimes we would have a sale with a loss leader (an item we were selling at cost or below) in order to get people to come into the store to see our other items on sale. And sometimes we would be so overstocked on an item with a short expiry date, we would sell it at a loss just so we would get something for it rather than lose the entire cost of the inventory.
and that is why I had to give up my career as a male escort… to many sales…
What you are saying is true sometimes but it is very hard to tell when. I was the transportation manager for a large retail organization ($1.5 billion per year) and I saw the cost on everything that we hauled. I was also a good customer of the stores. Stuff happens behind the scenes that often determines prices – stuff that is unknowable unless you’re involved. For instance we sold a ceramic and cast pot holder (used to keep hot pots from burning counters and such) for $9.95 (a competitive price ). We sourced them locally from an importer for about $7.00 each. As the company grew, we eventually had enough volume to buy direct from China – the exact same holder from the same manufacturer, landed at our warehouse were $1.95 each. So, initially 50% off would have dropped the price $2 below cost and when we bought direct, 50% off still left a profit of $3. Same product, same store. Capital cost is also a big determinant. Because unsold merchandise takes up space and ties up funds, smart companies will identify slow movers and cut the price below cost just to get rid of it. That is because the real cost continues to grow over time with warehousing, self space and capital costs. Merch is like money, it is not a fixed value – the real cost grows daily. Stores will often put stuff on sale (even below cost) just to get rid of it and free up capital. When you need a product that falls into that category you will get a real deal. Often, on higher priced goods – like winter coats in spring – most people don’t realize that the store manager has a great deal of leeway in pricing (to liquidate the goods)and you can negotiate an even lower price. This is not true for new or good selling merchandise. So, you can often get even more than the advertised discount on older or seasonal merch. Another big influence on price is lost leaders. Stores will often put high usage, lower priced items (like toothpaste) on sale below the cost and then advertise them to get people into the store. If you have the time and energy to cherry pick specials at various stores, you can drop your grocery bill considerably (I find at least 30%). And you are right – there is a whole psychology behind store set -up that encourages customers to buy more. We once had a Christmas party and the guest speaker was the company owner’s wife (Nancy). She confided that even though she knew all the tricks and why stores were set up the way they were , the psychology still worked on her and she would inevitably leave with more than she came to buy.
All in all, sometimes stores will screw customers with sales when their cost was inflated to begin with – but sometimes there are real bargins out there where the customer can buy below cost.
Oh Paul… I love that you think I actually think very much about the stuff I write…
I wouldn’t have ever even thought about this reply except you blew my mind one day when you gave a concise synopsis of West Bank politics over thousands of years – complete with maps and graphs. I checked the URL 17 times to make sure I had the right blog. i put in an inquiry to the College for the Assessment and Training of Squirrels (Crack) or CATS(Crack). I was concerned that the squirrels crack supply may have been getting low and their behaviour was losing abberance.
Anyway, that was what precipitated this comment. Carry On!
I guess I get lucky now and then and sound like I was thinking…
And if you sit enough monkeys at keyboards sooner or later one will write the complete works of Shakespeare. Uh Huh, Right, whatever you say.
It also works for squirrels on crack… only faster
… and what about that one monkey who got it all right but one word misspelled…
Bwahaha! Too funny – I was thinking the same thing. It is like that game from years ago called Labyrinth ( http://ecx.images-amazon.com/images/I/41B107Q4N7L.jpg ) . Get the little steel ball all the way to the last hole and lose it in the hole – after 15 minutes of sweating and swearing.
we played that game a lot when I was a kid… my older brother’s friend did it like 17 times in a row.
Why anyone bothers to buy anything unless it’s on sake confuses me. I don’t understand why we have to go through the charades of endless sales and coupons. Just set a price and sell it. Oh wait…Penny’s tried that and almost went out of business. We have a strange shopping mentality.
I don’t know, but I just heard on the radio that gas went up thirty cents in one week in San Diego.
You won’t cure me of my shopping addiction even if I know this stuff – which I do. And buy one get one free sales aren’t real either – I even did a post on it. Speaking of which, you might like my latest post but it gets kind of dark – but it’s really good 🙂
gotcha
Or, like some stores do, they double the price then put on the 50% off sticker.
that is just so cynical…
And so true… also needed if they want to stay in business.
like when Disney built an amusement park in the parking lot of their amusement park…
Did they? That’s kinda cool except for the drive bys
a cynical way to make people stay more days… they had room in the regular park for most of the rides.
Those words mean nothing. A retailer can take 10% off the top at any time no sweat–since standard markup is 40% or more. I’m speaking from experience working in hardware–home improvement stores.
Right… I could have researched real numbers… but I am more inclined to just winging it.
That’s a good way to be–nothing like good Buffalo wings.
unless the buffalo flies over you
Something else to be thankful for.
word
So true. I worked 7 years in retail management and the industry “tricks” are exactly that!!
The worst is when they do store layouts to funnel you in and make it hard to get back out… like a casino… that and the ‘impulse buy’ racks…
It is all a science that triggers your mind to buy, buy, buy! Especially Target!!!
I could do a post about sweat shops and child labor… but now I am too depressed.
That got a chuckle
yay