Hello Doug and Sarah;
If you’ve been observant as I have in my 40 some years in retail, you
will recognize this as just another element of the “race to the
bottom” mentality. First, I’ll refer to this phenomenon as RTTB.
RTTB says that customers are stupid and will only respond to a SALE!
because they believe there is only a real bargain afoot when this
happens. They aren’t smart enough to understand it’s a rigged game,
that prices have been artificially inflated, then artificially
discounted. Phase 2 of this mentality says, OK, they’re on to it,
but it’s like Big Time Wrestling. Customers know it’s scripted, but
somehow conjure enthusiasm as if they are part of the charade. To
apply this to RTTB mentality, customers know about the
inflated/discounted racket but think that it’s the only time prices
are realistic in respect to value. Fact is, ALL pricing is more or
less arbitrary, and can be low profit in respect to high volume, or
high profit because part of the “value” is brand snobbery.
I could go on about this, I’ve made quite a study of it, but let me
give it to you straight and concise. DO NOT pull this crap. Customers
may, at times, not be well informed, but they can still have their
senses about them and their instincts will tell them that you are a
bottom feeder like the big box/chain/mall stores and are trolling for
suckers who buy into this baloney about 50% off (after we jack up the
prices). They will also rightly get the impression that you think
they are stupid enough to fall for this. If you want to do a sale,
mark it down from your regular prices as a way to draw in new
customers and clear out old inventory. That is a legitimate sale.
I don’t do sales, but I will bundle multiple items for a discount,
whittle prices for customers who are on the fence, and give good
deals to repeat customers. This has to be done carefully, so they
don’t think you had overpriced the item to begin with. Look at the
tag, pull out a calculator, think about it, and don’t be afraid to
stand firm if you need to. I’ve even said, “I’m tired of putting this
one back in the safe every night, it’s yours for $” or "I’ve got a
little room on this and I think you’ll enjoy owning it, so I’ll go to
$. Joking around with some customers, “you’re killing me on this, but
you’ll be back, I know you are addicted to jewelry, so I’ll make it
up in volume, right?” "I’m going to have to cut my own pay for doing
this, but… " That, they know, is baloney, but it’s harmless and
they know that too.
I’m going to be pessimistic here with a little hyperbole:
INTEGRITY=SURVIVAL!
In a small business, in a small town, if you are scrupulously honest
and fair with your customers, your good reputation will spread like
wildfire and you will accrue generations of loyal customers. I see it
here every day. If you don’t have the traffic that a box store or a
cruise ship has, you won’t get away for very long with confusing your
customers about how a sale is proceeding. Confusing? I mean, it’s not
good enough to just not rip them off, you need them to feel confident
that everything is above board, you sincerely want them to get value
for their money. Value is simply a combination of quality product,
quality service, and a price that is not so low as to be suspicious
but not so high as to seem arbitrary and greedy. Of course, you
should actually price your product in a way that is fair to yourself
and good for your business. And that requires knowing what your real
overhead is. It’s taken me decades and I’m still learning. And by
the way, don’t fall in love with any of your inventory. It’s there to
sell, if it’s sitting too long, it could be overpriced. Sometimes
it’ll sit if it’s priced too low, but not often. Best of luck.
David L. Huffman