We all like a bargain, don’t we? It’s thrilling! What is it that excites us so much? is it because we feel we’re saving money? Perhaps we love the idea of getting something for less money than it is worth? Or do we just like the idea that we’ve paid less than somebody else? Whatever it is that pushes our buttons, bargains are big business – with flash sales (Sale MUST end tomorrow!), BOGOFs and seasonal offers everywhere, tempting us to spend our cash.
Photo – pixabay
How and Why do Retailers Give Us Bargains?
If you think about it I’m sure you’ll realise that retailers need to make a profit, so they certainly won’t be planning to sell anything at a loss. The retailer generally wants to buy something as cheaply as they can and sell it on for as much as they can get. They pitch the price by analysing the market and how much people will spend on a particular item. For branded, designer items you can expect to pay many times more than the retailer paid.
But retailers have to consider their costs. If they can’t pay their bills then they will go out of business. Using bargains is a great way to manage their money coming in (alias cash flow).
Here’s some reasons why retailers create bargains….
1. They might need to clear space for new stock which they believe will sell at a higher price – it’s more fashionable/the new version/seasonal. They can then sell off the remaining, older stock, often with less popular/out of date items left, at a cheaper price. It’s still income and better than being in a box in the storeroom.
2. For high fashion items the prices can be massively inflated initially and then reduced after a certain amount of time when interest is waning.
3. Offering a discount price to someone who is already a customer is a great way of encouraging loyalty. By approaching these customers directly, who are more likely to buy anyway, the retailer is saving money on advertising so reducing their costs which means they can afford to sell slightly cheaper.
4. Often a discount sign or voucher is available to attract new customers. The retailer is hoping to engage you and turn you into a loyal customer.
But the key message is – it is a business transaction. They are not giving you anything.
So are Bargains Good or Bad?
The key issue here is do you actually want the item you are buying? If you do, and you are happy with the price (bearing in mind that it is a business transaction) then why not? If you are only buying the item because it is cheap then perhaps it is worth thinking about whether you really want it. What will happen to it after you’ve bought it? Will it sit in the back of the wardrobe or go to the charity shop (or the bin)?
Photo – Pixabay
Unfortunately the thought of a bargain does drive some people …
Source:: The Huffington Post – UK Lifestyle