Wednesday, November 27, 2013
World of Finance: Price drama that retailers play-2
And you would think that since the stores are going out of business, they would want to sell items at the lowest possible price but I read somewhere that they do not and they actually price it higher than the regular price to make sure they recuperate as much money as possible. And since the customers are not in the habit of remembering what were the prices a few weeks ago, they get lured into these shops and pay for it thinking it is a bargain but it is not. And I will readily admit that I have visited these places but the prices I have seen made me turn back. And when the prices go down each week by 10 percent and then you visit the store, there is only crappy stuff remaining and the staff about to get laid off does not care that much any way of who buys or not. And recently a news article came out which said was an open secret that businesses don’t sacrifice their margins even when the discount or put items on sale. They buy from vendors for a certain amount and then put amount on the item which is like 200 or 300 percent more and even if they discount it to like 50 percent that is their initial margin that they are comfortable with and that is what they adjust it in their books. It is like a casino where the house (casino) never loses money no matter how many gamblers win, it is the same with retailers unless the customers don’t shop their anymore in which case the stores go out of business.