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It’s on sale!

Paul's Posts — 01 March 2012

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It’s on sale!

Opening my email I noticed a audio retailer was having a sale and it was tied to a calendar occurrence.

Is it just me or do you think it’s strange retailers feel the need to tie a sale to a holiday or an event?

In most cases retailers put things on sale because they are not moving – lowering the price stimulates people to buy – and has absolutely nothing to do with the calendar event.

I sometimes see more honest approaches like “inventory reduction” sales, but for the most part it’s “holiday sale” or some such.

I think this behavior stems from the way products are fixed in their pricing – the value of this product is X$ but for this brief time it is X$ less the sale incentive.  This helps maintain the agreed upon “value” of the product when it goes back to its regular price.

I admit I am not a shopper but it would hearten my engineer’s heart to see something like this:

“Sales are slow so we’re lowering the price for now”.

I am sure no one’s going to do this but ….

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About Author

Paul McGowan

Paul McGowan is the CEO and co-founder of PS Audio Inc. a Boulder Colorado design and manufacturing company of high-end audio products and services. McGowan has been designing and building high-end products for nearly 40 years. Hobbies include skiing, music, hiking, artisan bread baking, kick boxing and cooking. He lives in Boulder Colorado with his wife Terri and his 4 sons.

(8) Readers Comments

  1. Bassman23

    March 1, 2012 at 4:53 am

    Establishing the difference between an engineer and a marketer :-)
    Never try for a positive outcome with the public by starting with a negative statement.
    “Holiday” is a positive thought; attaching “Sale” to it leverages the good vibe. Marketing 101.
    A “Paul’s Birthday” sale sounds good to me! But of course, I just responded to a “New Upgrade Rollout” sale; that worked fine!

  2. Gordon

    March 1, 2012 at 5:34 am

    Retailers have conditioned the consumer to know that most everything goes on sale eventually.
    This high-low marketing concept has created a “false value” concept where the consumer actually feels stupid paying full price since he no longer trusts that full price exists.

    Very few manufacturers and retailers can do this dance and still retain credibility. Many don’t care.

    To tie the sale to a holiday or special event is camouflage and an attempt to legitimize the discount.
    “You can fool some of the people some of the time, BUT…………………………

  3. Terry Franklin

    March 1, 2012 at 12:04 pm

    Come on Paul, it is not like I am being fooled. If you want to come up with a reason for putting something on sale, it stills boils down to simply do I want it and do I have the money to afford it? There are items that go on sale at time when I am flush with loads of cash and I still do not buy them.

    Perhaps the flush with loads of cash was a tad overboard.

  4. Gordon

    March 1, 2012 at 2:56 pm

    Simple fact of life.

    Sales minus cost of goods = net income.
    Net income minus cost of goods = profit.
    You have to make sales!

    Add to that the “tricky” issue of cash flow and you have many reasons why ALL companies have to turn widgets into cash at various times of the year.

    Since “branding” is a difficult marketing concept for most, the number one attention getter is “discount” and since the “market” purchasing ability is not really expanding, then discounting also steals market share from competitors.

    When I needed cash flow I would call my key wholesale customers and say “hey, I need some $$$ so let’s make my problem be your bonus.
    Not to say that it always worked though.

  5. Gordon

    March 1, 2012 at 4:27 pm

    line above should read as

    Net income minus cost of sales = profit.

  6. allen_bh

    March 1, 2012 at 5:50 pm

    Hey Paul! Why don’t you have a sale on the new PWD Mark2? I have never seen your site offering it on sale, yet I can purchase it from a range of re-sellers at a very broad range of prices. I think you’d actually get more sales if you occasionally offered discounts just like the others do. Heck, why even play that game? Why not just offer your gear at a reasonable markup all the time?

  7. Gordon

    March 2, 2012 at 6:14 am

    Geeze.
    You are obviously not a business school grad.

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