Why We Overpay for Products While Shopping and How to Land a Great Deal
Even the savviest shoppers may not realise quite how often they end up overpaying for products. Stores are designed to lure you into buying products that you do not need, with attractive impulse-buy displays whilst you wait to pay for an item, or endless click-bait product advertising online. Unless you know how to land yourself the best deal, you may be losing unnecessary money.
But why do we overpay for products? According to a recent report by The Pearl Source, one of the largest online jewelry retailers in the U.S., this is largely down to high mark-ups for many brands, be it that designer handbag, sold at a whopping 10x more than cost, or the crippling 300% mark-up on that classic 14k white gold diamond engagement ring you’re eyeing up for your future spouse, or the pearl necklace with a 400-500% markup.
More expensive products can also be easier to buy, with quicker, pain-free payment options, and faster delivery times. External pressures can also be a factor in spending habits. If you’re shopping with friends and they all buy the expensive product, you may feel pressured to do the same. It may not be as fun, but it can be cheaper to shop alone! Watch out for sales pitches too - if you go into a store wanting to buy a product but not really being prepared, you’re more likely to be lured into buying a 75 inch 8K Ultra High Definition Sony Smart TV when you only wanted a small TV for the kitchen.
Minimum advertised pricing (MAP) is also another culprit for high mark-ups and subsequent over-priced products. MAP is the lowest price in which a product can be advertised at, specified by the supplier or manufacturer. This means that if you see the new iPhone 12 for $899, the price may already be above the specified MAP to allow for any future ‘discounts’, meaning that even then, you’re paying more than you should for a product. With that said, you can purchase an item for less than the MAP – it’s only the advertised or label price that is set in stone. If you can effectively negotiate discounts, you could see yourself landing some spectacular deals. For example, that watch you’ve wanted for months, sold originally for $400, but you negotiated it down to $180, saving yourself an incredible 55%.
So, just how do you negotiate that great deal you really deserve? Well, research is key. You will be far better equipped to negotiate a bargain if you understand the product you are looking for, and what the competitors have to offer. This does not just apply to large purchases either – it all adds up. Why pay $2.90 for a loaf of bread at the store down the road, if another local store sells it for $2.50?
Understanding the business as well as planning in advance will also work in your favor. Why wait until summer to buy your summer wardrobe, when you could take advantage of a store’s eagerness to rid its shelves of shirts and sundresses at bargain prices as the colder months approach? Some companies price-match as well, so having an awareness of similar products sold for cheaper elsewhere, can be a great bargaining tool.
Interpersonal skills are also a crucial element to effective bargaining. This starts with the ability to spot the person who can get you the deal you’re looking for in the TV store. This may require a keen eye; who has the air of authority on the floor? Who has a different uniform or looks to be directing others what to do? This may be your go-to person. Your own demeanour is a vital factor here too, as you need to be firm, but friendly too. Whilst you do have an advantage that your busines is not guaranteed and they obviously want to close that deal, ultimately, you are not in a position of power. So be friendly when you’re trying to negotiate that 42-inch Smart TV. Whilst the saying ‘the customer is always right’ is true, no store clerk is going to really want to give a better price to a rude customer. With that said, being ‘nice’ does not mean being a push-over.
If you are a regular customer, for example at a hotel, your loyalty should be worth something. You don’t get if you don’t ask. Persistence is key, do not give up straight away if you get a no. And don’t forget, there are other ways you can land a great deal if the price cannot be negotiated – free delivery, discount codes for future purchases, free upgrades, etc.
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