"The silliness of it all is that the original price from which the discount is computed is often specious to begin with," sums up the seemingly obvious "retail theater" that plays out every Black Friday in mall after mall across America. As the WSJ reports, the common assumption is that retailers stock up on goods and then mark down the ones that don't sell, taking a hit to their profits. But that isn't typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want. Buyers don't seem to mind. What they are after, especially in such a lackluster economy, is the feeling they got a deal, "I don't even get excited unless its 40% off." The manufactured nature of most discounts raises questions about the wisdom of standing in line for the promotional frenzy that kicks off the holiday shopping season. It also explains how retailers have been able to ramp up the bargains without giving away the store - until now.
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There are usually better deals over the course of the year. Figure out what you want, check multiple vendors, and be patient for that best price to come along.Gone are the days of Free After Rebate items and obvious loss leaders. As the frenzy increases, so do prices.
ReplyDeleteI hope more people will realize this and stay home with their family.