Think you are getting a discount? Think again… that's what its worth

The only reason discounts work is because every buyer thinks they are ‘special’…

1) “Everyone else pays full price but *I* get it at 50% off. This salesperson must really love me, they just let me keep my extra $10K in cold cash that I can now spend on my spouse.”

or

2) “Boy oh boy, I found a great deal! 65% off – I bet nobody else gets this great a deal. The salesperson said they were able to do this because I was the 1st caller that minute.”

Problem is, we are programmed to respect MSRP as being equal to the value of something,. But it is not. What it sells for is ‘the value’.

But the perception of MSRP may be changing.

When shopping for video cards on newegg.com, who looks at MSRP, it is the street price we care about.

When shopping for CDs, the MSRP is what $15, $17? [this was written a year or two ago and not posted. I think $18.99 is now the standard price]. Kind of hard to tell. But we know they go on sale at random (it seems to me) for $11. And they are free if you can find and download them or copy them from a friend.
[Not sure why I originally put this in here. This is the opposite of a discount economy and is pure price gouging. It might have worked a decade or two ago – but we now all KNOW how much it costs to make a CD. In some ways it is this kind of over-charging that may have triggered the discount economy.]

This is worse now during this ‘Downturn’ or ‘Great Recession’. It is worse because both consumers, sales people and manufacturers think they now have carte blanc to play games with reality. “Everybody expects to get big discounts these days”.

It ain’t a discount if that is what they are selling it to you for – that is what it is worth.

See also:

Cheap: The High Cost of Discount Culture

and more factoids:

“Manufactured goods have been getting cheaper, both in absolute terms and relative to services. Since the Consumer Prices Index was first launched in 1996, the prices of “goods” have fallen an average 2%; while the prices of services have risen 35%. The most talked about example has been in textiles: since 1996, the average price of clothes has fallen 36%. But it is not just clothes that have been falling in price: new cars are 1.5% cheaper than they were in 1996; household appliances are 24% cheaper; toys are 30% cheaper, and of course, in the audio-visual category, you’ll find things are on average now 56% cheaper than they were nine years ago”

And this is BEFORE the 50% off discount…. 😉

Where most people shop for pedestrian and cheap [what others might (do) call America’s love affair with the shoddy], others shop for uncommon value. I personally do not see how the ‘discount economy’ has caused the current economic clime, but I do, personally, find it boring and tiresome and not at all where the ‘cool’ stuff is happening.