Suzanne O’Connor’s Bargains LA

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Tuesday, August 21, 2018

A Bargain Doesn’t Mean Cheap

By Suzanne O'Connor

I’ve said it before and I’ll say it again, a Bargain isn’t always cheap.

Definition: A Bargain is an item that is priced BELOW is actual Value.

Where as a cheaply priced item is just priced cheap. But still can have some value.

Look at it this way, if I bought a base model Tesla Model 3 for $25,000 instead of the sticker of $35,000, that would be a bargain…. Around a 30% savings.
Based on car value and manufacturer mark up, it’s actually an incredible steal.

Another way to understand it ….
A designer furniture manufacturer builds a luxury sofa with a solid hardwood base, high density / high grade foam with down feathers and top grade fabric. He employs top, experienced craftsman to construct his sofa. It cost him $1400 in labor and content to build. He wholesales for $2600 and the retailer prices it for $7000.

After a while the sofa gets marked down to $3000.  Is that a deal? Hell, YES!
The original value was $6000 and now it’s priced $400 above the wholesale cost.  The retailer barely covers his costs and you get a great deal.

On the other hand a plastic desk drawer organizer retails at $7. The cost to make it is 20 cents. Wholesale mark up and volume purchase makes it 80 cents at wholesale. Add in Big Box distribution & retail mark up and business costs, it’s now $7. But it’s on sale for $3. 

That’s a cheaply priced item. But figure in the ease of buying it, the costs of the bring it to market at a Big Box retailer…. and it is a bargain! It’s worth more than it is priced.

An items actual price doesn’t make it a bargain, the Value does.

Outlet mall stores generally have product that is advertised at being below retail. The problem is most those items are of lower quality and were never offered, or sold anywhere else at a higher price. They are priced at the respective value they should be at. So most outlet malls have many stores selling at RETAIL and are not a bargain

When you look at the price of a product you have to figure in the costs of making the product, the distribution and the retailers costs to offer it to you. Almost anything that is priced at 30% off of original retail is a fair deal. Anything priced at 50% off it’s actual initial offering price or more is a bargain.

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