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 Post subject: Sales and pricing psychology
PostPosted: Feb Mon 26, 2018 4:03 pm 
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Location: Aurora, CO
Here's an article I found interesting. It gives insight into the game of pricing and negotiating. When I list something on CL, I price it higher than what I want knowing potential buyers will feel better about buying it if they have negotiated a lower price-regardless of what it's worth.
http://behavioralscientist.org/forget-e ... -relative/

http://business.time.com/2013/05/02/jc- ... of-course/

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Mon 26, 2018 6:04 pm 
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"Oh, look... I've just purchased a new Sofa... It was half price, how clever am I"
Sheesh...

:) Greg.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Mon 26, 2018 6:12 pm 
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When I lived in the San Francisco Bay area a friend of mine's father was a manager in a large grocery store. He had a lot of 1/2 gallon bottles of juice @ $1.45/ea that were not selling and were taking up valuable "shelf" space. He moved them all to the front of the store and stacked them neatly with a sign that said "3 bottles for $5 - Limit of 6 bottles per customer". They sold out the entire inventory in only a few hours!

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Mon 26, 2018 8:22 pm 
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Hobby Lobby is a good example, some items are always 50% off of marked price, such as picture frames and knick knacks and stuff. Why not just make the regular price the 50% off price?! And Menards says everything is 11% rebate, why mess with that? The rebate is only good for Menards. So it is an endless cycle. I worked in retail for decades and the "sale" price tag was put on before the merchandise hit the floor.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Mon 26, 2018 9:41 pm 
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Menards rebate plan is smart, and not easy to receive, You take the receipt, fill out a rebate form, send it in, get a coupon
good at menards, then remember to take and use it. A person completing all these steps, I bet no more than 20% of customers,
so it's a give-away. we use it on dog food and dog snacks, adds a bit more to the discount in the year.

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Tue 27, 2018 8:32 pm 
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A local Seven-Eleven store had bananas 2 for $1. They changed the sign to 50¢ each and sold more.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Tue 27, 2018 8:39 pm 
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Sister was a buyer at a fairly high end dept store, the retail prices were double what they paid wholesale. A 100% markup but, they called it a 50% markup.

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Tue 27, 2018 9:20 pm 
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scopedope wrote:
Sister was a buyer at a fairly high end dept store, the retail prices were double what they paid wholesale. A 100% markup but, they called it a 50% markup.
In retail, it has been traditional to state markup as a percentage of the selling price. Subtract their overhead, inventory financing costs, taxes and labor costs, and there is not so much left.

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Last edited by FStephenMasek on Feb Wed 28, 2018 4:44 am, edited 1 time in total.

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 12:52 am 
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100% markup (at least) in retail has been SOP pretty much forever. If you think running a business is easy, you should try it sometime. Not many do, but they sure have an opinion.

Dick Cabela back in 1961 came up with a plan to sell fishing lures he had purchased while at a furniture show in Chicago. He put ads in the paper reading: "12 hand-tied flies for $1"

Nothing.

Then, changing tack, Mr. Cabela rewrote the ad "FREE Introductory offer! 5 hand tied Flies....25c Postage....Handling" and they sold like hotcakes. Cabela's is now a HUGE outdoor gear supplier based in Sidney, Nebraska went public in 2004 with net assets of around nine billion dollars. Not too bad for selling a few hula poppers or whatever.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 1:08 am 
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FStephenMasek wrote:
scopedope wrote:
Sister was a buyer at a fairly high end dept store, the retail prices were double what they paid wholesale. A 100% markup but, they called it a 50% markup.
In retail, it hason been traditional to state markup as a percentage of the selling price. Subtract their overhead, inventory financing costs, taxes and labor costs, and there is not so much left.

When we had our retail ladies ready to wear store in a strip mall, the standard markup on the major brands we carried was simply double the garment cost. Some items bought from lesser known and lower priced sources -such as garment alley in downtown L.A.- could get 2.5/3x markup, costume jewelry and accessories -scarves, hats, purses- easily 4x.

We had a guest book, where customers could leave their name and address in order to be notified of our semi-annual sales days. At the end of the season, we would send out postcards inviting them to a one day, 30-50% off sale. The store would get mobbed, and it allowed us to dissolve most of the just ending season's items and generate funds for the next season's wares, + a lil' profit.

In retail, the faster moving an item is, such as grocery store produce, the lower the markup, and the slower, such as furniture or major appliances, the opposite.

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 2:22 am 
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scopedope wrote:
Sister was a buyer at a fairly high end dept store, the retail prices were double what they paid wholesale. A 100% markup but, they called it a 50% markup.

It's a 50% margin. The percentage of the price that's over the cost of the goods. It doesn't include the cost of selling the products, store rent, overhead, employees, taxes. It's expected that margins average 40% or more.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 2:34 am 
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markup is the percentage of the markup, not the result, if an item is $80 and you raise the price to $100, you marked IT up 25%.

I worked in a Jewelry store, pricing varied per the item, and is standard practice. Watch bands, ID bracelets, such cheaper
non precious metal is "keystone", double our price for retail. Gold is market based when buying, formed gold items, rings, necklaces
and the like can be 1000% of the weight value, plus depending on artist. Diamonds, it's a syndicate to get into REAL buying, our chain had 85 stores and related
to other families who had many more, so their buying trips went into the millions in Antwerp, but anyways, diamonds typically run 1800%
markup. Perfect and near run 3000% easy.

edit - inventory may sit for years, the cheap competitive engagement rings are not included, they come in bulk

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 3:24 am 
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a good friend of mine ran a very small feed store close to my QTH.

in the store, there was accumulation over the years of all kinds of "little junk" like fly paper, dog collars, ant traps, dog combs, lighters, dog chew toys, pet grooming supplies, fly swatters, novelty dog tags, and all sorts of little "add on" stuff that did not sell in years.

to get rid of it, he put the stuff in a new propped up wheel barrow at waist level beside the ole wooden checkout counter and made a sign that said: "10 cents a piece with any purchase". the sign and display could not be missed.

it all barely sold and still sat there collecting dust, wasting space, and costing money.

after a while he put up a sign that said "10 cents a piece or two for 25 cents" with any purchase.

...the stuff sold...

:|

steve

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 Post subject: Re: Sales and pricing psychology
PostPosted: Feb Wed 28, 2018 5:07 am 
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Yea, 2 for something is better than only one, especially for the currently math challenged. :shock:


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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Thu 01, 2018 3:14 am 
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yea, lol, call it "walmart math", and yes, it does exist.

it is cheaper By The Ounce to buy new windex spray bottles than to purchasd the refill container.

...at least this is the way it is here at my QTH...

steve

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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Thu 01, 2018 9:09 am 
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Dutch Rabbit wrote:
my QTH...


Looks like you are posting with a lisp... :wink:

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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Thu 01, 2018 8:18 pm 
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Mike Toon wrote:
Yea, 2 for something is better than only one, especially for the currently math challenged. :shock:


That's Arithmetic, not Math. Yikes.


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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Fri 02, 2018 2:52 am 
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fifties wrote:
Dutch Rabbit wrote:
my QTH...


Looks like you are posting with a lisp... :wink:


i get my teeth clipped in the springtime.

8)

steve

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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Fri 02, 2018 5:54 am 
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glue_ru wrote:
markup is the percentage of the markup, not the result, if an item is $80 and you raise the price to $100, you marked IT up 25%.

I worked in a Jewelry store, pricing varied per the item, and is standard practice. Watch bands, ID bracelets, such cheaper
non precious metal is "keystone", double our price for retail. Gold is market based when buying, formed gold items, rings, necklaces
and the like can be 1000% of the weight value, plus depending on artist. Diamonds, it's a syndicate to get into REAL buying, our chain had 85 stores and related
to other families who had many more, so their buying trips went into the millions in Antwerp, but anyways, diamonds typically run 1800%
markup. Perfect and near run 3000% easy.

edit - inventory may sit for years, the cheap competitive engagement rings are not included, they come in bulk


Diamonds are one of the biggest scams of all. The supply is tightly controlled by a cartel. After all, they are made out of a pretty common substance.

On ebay, 1B22 tubes usually go for $30 or so. They also have radium in them. Awhile back I saw one for $90 BIN and it sold. The seller advertised it as "One Hot Mother". I have some tubes that aren't as radioactive, but I put that description on them and sold 6 or 7 for $34.95 plus shipping.

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 Post subject: Re: Sales and pricing psychology
PostPosted: Mar Sat 03, 2018 7:10 pm 
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Joined: Feb Thu 04, 2016 2:41 am
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Location: South Greeley.
Ted wrote:
100% markup (at least) in retail has been SOP pretty much forever. If you think running a business is easy, you should try it sometime. Not many do, but they sure have an opinion.

Dick Cabela back in 1961 came up with a plan to sell fishing lures he had purchased while at a furniture show in Chicago. He put ads in the paper reading: "12 hand-tied flies for $1"

Nothing.

Then, changing tack, Mr. Cabela rewrote the ad "FREE Introductory offer! 5 hand tied Flies....25c Postage....Handling" and they sold like hotcakes. Cabela's is now a HUGE outdoor gear supplier based in Sidney, Nebraska went public in 2004 with net assets of around nine billion dollars. Not too bad for selling a few hula poppers or whatever.

Wait, what? There is a national chain based in the panhandle? :shock:

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