Dubai Consumer Mirror

Tuesday, January 10, 2006

Discount Shopping Myths

It amazes me how there are plenty of shoppers out there that still do not understand or fully comprehend the concept of "Discounts" or "SALES". I will try to clear out some facts about sales without getting into too much detail. I will try to bust some of the myths that many shoppers believe about Sales.

  • Shops offer their entire stock on sale
    Myth. The majority of discounted items (if not all) are from previous seasons/collections that could go 3 or 4 years back. This can be clearly noticed in women's clothing shops when 'professional' female shopping junkies notice that very few "new" items are on sale and "those boots from last year's collection are suddenly back on the shelf again".
  • During discounts, shops make more sales but less profit
    Myth. Believe it or not, in SALES, shops make more marginal profits than they do in non-sale periods. Successful shops that hit their sales targets, carry remaining inventory from that closed season. Its this inventory that becomes "discounted items". So, even if they sell these 'leftover' items for 1 dirham, all the revenue generated, discounting the cost of inventory, will be pure profit.
  • All shops jack up tag prices the night before Sales.
    Partial myth. Most respectable (franchise-managed) retail outlets are audited by the chamber of commerce (or whatever economic body) to verify original price lists, making sure that promoted/discounted prices are actually reduced. Questionable shops, however, do play this jack-up prices game and they are usually spotted by smart/avid shoppers.
  • Shop employees get to get all the "good stuff" first
    FACT. Majority of shops offer in-store early-bird SALE for staff, family and friends before the official sale period. This is one way shop owners/managers try to (1) give employees a moral boost before the whole Sales frenzy hits and (2) to maximize sales of course.
I can't think of anymore myths ... Can you?


  • something that has always puzzled me:
    "cost price"
    what exactly does it mean?
    any explanations?

    By Blogger samuraisam, at January 10, 2006 at 1:32 PM  

  • Here in the UAE the only shop that I have found who actually do sell all of their seasons collection in sales is Marks & Spencers. They cannot bring out old stuff a year later, and they keep on reducing the prices until it is all gone. The rest are disgusting thieves. They hoard it all in warehouses and bring it out for every sale. Mothercare are ridiculous, they will bring out the same clothes year after year in the sales, and it is so obvious. It is bad enough being pregnant, never mind having to buy the same old dated maternity wear with each pregnancy......
    BUT on another note...IF you see something has been marked 'up' so that it can be reduced in a sale, then PULLLLLLEEEEEEEEEEEEEEZ don't moan here....go straight away to the complaints dept at the Department of Economic Developement and make an official complaint. They WILL do something.

    By Blogger CG, at January 10, 2006 at 5:22 PM  

  • sam,

    If you own a computer shop and you buy 100 laptops at DHS 4000 each, then you manage to sell them at DHS 4200 each then your profit is DHS 200 and your cost price is DHS 4000.


    i admire your official and proper way to screw these screwers.. i hope people actually read this and go and complain formally. i will certainly try it next time i have the chance.

    By Blogger BuJ, at January 10, 2006 at 10:44 PM  

  • but buj, the definition of cost is
    cost (kôst)
    An amount paid or required in payment for a purchase; a price.
    The expenditure of something, such as time or labor, necessary for the attainment of a goal: “Freedom to advocate unpopular causes does not require that such advocacy be without cost” (Milton Friedman).
    costs Law. The charges fixed for litigation, often payable by the losing party.

    the definition of price is
    price (prīs)
    The amount as of money or goods, asked for or given in exchange for something else.
    The cost at which something is obtained: believes that the price of success is hard work.
    The cost of bribing someone: maintained that every person has a price.
    A reward offered for the capture or killing of a person: a felon with a price on his head.
    Archaic. Value or worth.

    they both sound exactly the same to me.
    i thought people used like "net cost" and "profit margin" and all those fancy economical sounding words

    By Blogger samuraisam, at January 11, 2006 at 12:01 AM  

  • you are right sam, the use of the term 'cost price' is a bit stretched.. Its like when shops promote 'factory' or 'whole sale' prices. Its just a way of telling people that the promoted items have a lower price.

    One thing i still do not get are the shops that are on sale 365 days a year .. how can they get away with that?

    By Blogger moryarti, at January 11, 2006 at 1:59 AM  

  • CG - thanks for the tips on mothercare.. not that i would have noticed it before!! since i never really went there unless i am buying a present .. but this time it was like WoooooHooooooooooo .. i went crazy over the baby girls clothes!! Mr. M could have excercised his biceps by carrying the stuff i got!!

    Also some other shops that bring out old stuff are mango and zara.... Although they do have really nice jeans on sale (like i can even think of buying them!!) :0(

    By Anonymous mrsmoryarti, at January 11, 2006 at 9:50 PM  

  • Just been to the M&S sale and picked up a swimsuit that was marked down from Dh 195 to Dh 100, but because they had written Dh 10 on the tag they gav eit to me for that. Now that is a bargain...and the fact that it fits and looks nice is an added bonus...yummmmy.

    By Blogger CG, at January 15, 2006 at 12:21 PM  

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