Thursday, June 19

What Discounts mean

June is the time of the Great Singapore Sales (GSS).
Which means everywhere you go, you are sure to see all stores proclaiming discounts of epic proportions.

As a stingy rational, practical level-headed man, this is how I interprete discounts.

50% discount - What it all means

(1) It makes no economic sense for any shops to sell you something below cost price.
So if they say
Usual Price: $100, Now: $50
It can be interpreted as the cost price should be less than $50. So it means suckers you have way overpaid when the stall is not having any discount.
Jewellery stalls come to mind as I am typing this.

(2) Price something expensive so that you can have a sale.
As an implication of (1), stalls should double their price so that they can give attractive 50% discounts.

(3) The Greater Fool Theory.
The original price can sometimes be a "fictitious number". Imagine a box of paper clip with the words
Usual Price: $500, Now:$5
At 99% discount, you will be a "fool" not to get it!
But if you get it, you end up being a "greater fool" because paper clips are not worth even worth $5 (not to mention $500).

(4) Need vs Want
Some of you may have already read the unforgettable lesson that my mum imparted me.
As a kid, there was once when I saw a McDonald Happy meal priced at $3 instead of $4.50. Being the greedy little boy that I was, I asked my mum to buy it for me because its "save 33%" if I buy it. My mum countered that if I don't buy it, I will "save 100%". I was speechless, but found it very true.
Yes, even though Limpeh is greedy when it comes to food, I am still a rational greedy guy.

(5) Discount at the price of another discount
Discounts do not usually stack.
Supposed your credit card normally entitles you to a 15% discount at a retail outlet, and that in a sale, the discount is 50% but you are not eligible to have the credit card discount, it means that the additional discount is only 35%, not 50%.

Having said all these, lets move on to
UP TO 50% discount - What it all means

It just means the shop can have 1 or 2 items at 50%.
And the rest at 10-20% discount.

Enjoy your Great Singapore Sale.

4 comments:

Mockingbird said...

Words of wisdom from Shingo T: 50% off the usual price of $100 means the product's cost price is less than $50. Cool :)

khengsiong said...

Out-of-season products could be sold below cost. But jewelery?

I prefer Wal-Mart's 'Everyday Low Price'...

Shingo T said...

Mockingbird:
Thanks!

Kheng Siong:
The other thing that could be sold below cost are consumables that are nearing expiry dates. I see that alot in the Singapore night markets. =p

The Horny Bitch said...

Retail usually sell things at 700% above cost.. so do your maths bah.. :)

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