Suzanne O’Connor’s Bargains LA

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Tuesday, December 13, 2016

Retail Pricing

By Suzanne O'Connor

Retail pricing! OY! What a headache that is for shoppers to figure out.  As we have all seen, Retailers will hide, manipulate and deceive you.  With Macys. Khols, JC Penny and Sears finally getting sued for misleading pricing. Here’s what you need to know.

Actual Market Retail which is what most consumers actually pays for a product.  On average this price is 5%-25% below original asking.  But can be higher or lower. This variance is often due to what time of year, where and by whom the product is being sold and what type of product it is.

For example Apple phones, iPads and Computers pricing is controlled by Apple. If a retailer agrees to sell Apple product, Apple tells them what they can sell it for and when if ever they can discount.

Generally speaking, Apparel and Home Furnishings has a much wider range of pricing that is not solely dictated by the manufacturer. Because of competition, there is some wiggle room that can be exercised by the retailer… or not. They can mark way up or way down.

A lot of the retail pricing these days are controlled by the manufacturer. There are retail / wholesale mark up formulations. But the truth is, the retail price is more about what they think you’ll pay and how they want the product to be perceived in value. Not so much what it cost to make and distribute.

This is where MSRP comes in. Manufacturers Suggested Retail Price is just that a suggestion.  Which is more like a marketing ploy. Just keep in mind, “Asking doesn’t mean they got that price”. That price is usually used to make you feel like you got a deal.  It’s used as a comparison price.

Market Retail is real retail. What someone actually paid for an item. But that price varies so much that it’s hard to nail down.

Unfortunately, MSRP and advertised retail is the only price we, at BargainsLA can start with. Which is why I look for discounts of at least 30% for anything to be close to a fair deal.

As I have stated before, Retailers are not your best friend. They are in business to make a buck. They will do what they need to do or can get away with, to do that.

It is always buyer beware.

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