That’s a really big issue, tbh. People don’t get how prices work. You see the same with promotions/sales. A lot of shops/companies will often put their products on sale for 25%, 50% or even more off. And people think they will actually save that amount of money. Instead of realizing that in most cases the sales price is the regular price, and the regular price is inflated by the sales price amount so that if the product is sold the seller still makes the same margins.
In a former job the company started expanding to Asia, and we got a sales guy from Singapore to represent us in Asia. He said that if we aren’t selling with at least 60% rebate, we have no chance of selling stuff in Asia. So we created a new price list for Asia with all the prices tripled.
Regardless of whether you call it a sale, regular, or inflated prices aren’t you still saving money by buying when it’s relatively low?
I’m aware of the psychology of marketing and the trickery of things like Black Friday. But unless the sale price is literally the same as it was when not on sale, then I’m not following.
Edit: in your Asian rebate example, is the idea that those customers want to see a high price and then get a big rebate when they buy it? That’s fascinating! (And has probably worked on me too)
If the model is high rebates at some times (e.g. an article costs €50 instead of €100 for part of the time), then you do save money buying when it’s at €50.
But you have to remember that €50 is the price at which the seller would usually sell the product. That’s the price that their price calculation says that it should be sold at. Otherwise they’d not be making profit.
So the alternative model is to always sell the article at €50.
Or to put it differently: The seller does the price calculation and comes up with €50 being the price where they would need to sell it to make profit and the price that the customers would still buy it at. It’s the optimal price, and the price they should be going with.
Instead, they sell it for €100, so they can discount it to €50 and put a big “-50%” sticker onto it. Hardly anyone who has the choice buys at €100, everyone waits for the sale, when it’s put to €50. And then more people buy, because they think they have made a massive deal, because they have gotten a €100 item for only €50. They are going to tell all their friends about it, it might even make it into news articles or stuff like that, and then more people buy.
The other option, which is illegal in some countries but legal in others, is to just fake the “full” price all together. The product is always offered at €50, but the sticker says “€100 -50% super sale!”
You can see stuff like that on Aliexpress. Pick some article that has a 50% rebate during some sales holiday (e.g. Black Friday). Then look at the article a week later, and in almost all cases the non-rebated price next week will be the same as the rebated price during Black Friday.
That’s a really big issue, tbh. People don’t get how prices work. You see the same with promotions/sales. A lot of shops/companies will often put their products on sale for 25%, 50% or even more off. And people think they will actually save that amount of money. Instead of realizing that in most cases the sales price is the regular price, and the regular price is inflated by the sales price amount so that if the product is sold the seller still makes the same margins.
In a former job the company started expanding to Asia, and we got a sales guy from Singapore to represent us in Asia. He said that if we aren’t selling with at least 60% rebate, we have no chance of selling stuff in Asia. So we created a new price list for Asia with all the prices tripled.
JCPenney tried to move to a more transparent pricing structure in 2012 and it lost them nearly a billion dollars.
So sad when companies try to do the right thing, the consumer market is too dumb to appreciate it.
Regardless of whether you call it a sale, regular, or inflated prices aren’t you still saving money by buying when it’s relatively low?
I’m aware of the psychology of marketing and the trickery of things like Black Friday. But unless the sale price is literally the same as it was when not on sale, then I’m not following.
Edit: in your Asian rebate example, is the idea that those customers want to see a high price and then get a big rebate when they buy it? That’s fascinating! (And has probably worked on me too)
If the model is high rebates at some times (e.g. an article costs €50 instead of €100 for part of the time), then you do save money buying when it’s at €50.
But you have to remember that €50 is the price at which the seller would usually sell the product. That’s the price that their price calculation says that it should be sold at. Otherwise they’d not be making profit.
So the alternative model is to always sell the article at €50.
Or to put it differently: The seller does the price calculation and comes up with €50 being the price where they would need to sell it to make profit and the price that the customers would still buy it at. It’s the optimal price, and the price they should be going with.
Instead, they sell it for €100, so they can discount it to €50 and put a big “-50%” sticker onto it. Hardly anyone who has the choice buys at €100, everyone waits for the sale, when it’s put to €50. And then more people buy, because they think they have made a massive deal, because they have gotten a €100 item for only €50. They are going to tell all their friends about it, it might even make it into news articles or stuff like that, and then more people buy.
The other option, which is illegal in some countries but legal in others, is to just fake the “full” price all together. The product is always offered at €50, but the sticker says “
€100-50% super sale!”You can see stuff like that on Aliexpress. Pick some article that has a 50% rebate during some sales holiday (e.g. Black Friday). Then look at the article a week later, and in almost all cases the non-rebated price next week will be the same as the rebated price during Black Friday.
People just love being lied to. It’s really sad.