by Anil Machado

Created on: January 31, 2009   Last Updated: March 21, 2009

Wish it was true, but suggested retail price is never the true value of a product. Retailers having a very specific pricing structures which include the cost price+minimum margin+mark up+cusion. However, the grocery and food stuff items may include a less margin+mark up but the other retailers do have a huge margin & mark up. Retailers have price tagged items that are either fixed or bargained. However, on the other hand the big designer wears and brands do have prices which are extremely high priced due to the advertising, marketing budgets and other overheads in that category of business.

Some retailers who conduct discounts, sales and special offers also make their profits on the products sold. I have never heard that retailers would sell their items at cost or less then cost. For instance there are retailers who conduct sale for 50% discounts, even thats absurd in terms of reality. As i have worked in retail industry for over 15 years and only way to sell products for 50% is by hiking up the tag price. In factthe 50% discount schemes make more business and generate more business or even get rid of the dead stocks/non-moving items from the store. We might think that due to the ongoing recession and financial crisis the retailers have reduced their prices and giving products for cost price. Its not fully true, there are retail units which have felt the burns of this ongoing crises but the units which have suffered big losses or under financial commitments might sell their products for throw away prices.

Perhaps, one should be only clever to actually see the real worth of the products and make use of such opportunity. In times to come we hope that suggested prices would come as true prices, but thats not certain and will never be done. As we all need to understand the fact the retailer is not the producer of the products and they have to incur costs such as employee salaries, rent, tax, operations cost, return on investments. Therefore, its only wise for us to look out for original economical products and not to spent money on fakes.

Also next time when we are at a store we should be smart to select our choice of products and not to get impressed by the sales talks that the sales person is actually selling for almost cost price, remember that never happens. If only we really keep a track of what is our requirement, what are the available prices for those products and compare the prices to buy the best priced one, but do not get overwhelmed by the sales talks and decide to pay more if you haven't done your home work.

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