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Marketing/sales question for the experts here...
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<blockquote data-quote="RonJohn" data-source="post: 807278" data-attributes="member: 2426"><p>I am not a marketing person either. In fact I pretty much detest marketing. I think part of the reason you see these types of things is that you do have an engineering mindset. Most stores don't price things exactly based on cost to produce/acquire with a reasonable markup. Many "sales" items are actually a price the store would like to sell at, but they place a price tag with a totally unreasonable price. Sears used to always have shirts(and other items) at huge "discounts". You could buy a $120 shirt for $30. However, the shirt probably cost Sears $5, and they would have sold it for $10 or $15 and still made a profit. Instead of running as a cost-plus-markup business, most store try to get you to pay as much as possible, while getting you to feel as though they gave you a much better deal than you should have been able to get. It is smoke-and-mirrors instead of hard facts.</p><p></p><p>I don't see the kit at the moment, but for a long time a cordless 1/2" impact wrench was $139 for the tool only, but $99 for a kit with the tool, a bag, a battery, and a charger. I don't think they are losing money on either item. If someone has a battery and charger for other tools and only needs an impact wrench, it is highly likely that they won't even compare pricing. They will just get the tool and pay $40 more than they would to get an extra battery and charger. From the standpoint of running a store, it works both ways. If someone notices and buys the kit, they feel like they got a really good deal. If someone doesn't pay attention and just purchases the tool, you get more markup while the customer gets the tool they want.</p></blockquote><p></p>
[QUOTE="RonJohn, post: 807278, member: 2426"] I am not a marketing person either. In fact I pretty much detest marketing. I think part of the reason you see these types of things is that you do have an engineering mindset. Most stores don't price things exactly based on cost to produce/acquire with a reasonable markup. Many "sales" items are actually a price the store would like to sell at, but they place a price tag with a totally unreasonable price. Sears used to always have shirts(and other items) at huge "discounts". You could buy a $120 shirt for $30. However, the shirt probably cost Sears $5, and they would have sold it for $10 or $15 and still made a profit. Instead of running as a cost-plus-markup business, most store try to get you to pay as much as possible, while getting you to feel as though they gave you a much better deal than you should have been able to get. It is smoke-and-mirrors instead of hard facts. I don't see the kit at the moment, but for a long time a cordless 1/2" impact wrench was $139 for the tool only, but $99 for a kit with the tool, a bag, a battery, and a charger. I don't think they are losing money on either item. If someone has a battery and charger for other tools and only needs an impact wrench, it is highly likely that they won't even compare pricing. They will just get the tool and pay $40 more than they would to get an extra battery and charger. From the standpoint of running a store, it works both ways. If someone notices and buys the kit, they feel like they got a really good deal. If someone doesn't pay attention and just purchases the tool, you get more markup while the customer gets the tool they want. [/QUOTE]
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