8 ms·
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoe
by axiom 16y ago
This is the difference between business-to-business versus buying consumer goods. You can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. So you have a fixed price for everyone. However you can (and should) negotiate with people buying $20k worth of services from you.
Historically, the consumer experience is actually the exception, not b2b. Up until fairly recently it was standard practice to haggle for everything you buy. It's only the rise of the middle class and of huge companies that sell goods/services to millions that brought about this new idea of fixed prices that aren't open to negotiation.
- bmcleod 16y agoSlightly related: In pretty much any store which has sales people that come and talk to you those people have the ability to knock 5-10% off if you ask for it. Cheap things aren't worth negotiating a lot for, but they certainly can be negotiated and the other side will quite happily make a small concession normally since it pays off in happy customers. This is why always asking for a discount is worth it.
- vacri 16y agoThe medical equipment company I used to work for had a 5% discount that they built into every sale - people rarely paid full price, so sometimes just asking 'can you do better?' on high cost items will at least get you this "auto" discount.
- deleted 16y ago[deleted]
- patio11 16y agoYou can't waste time negotiating with every client who buys a $50 pair of shoes from you - it's just not cost effective. This is where price discrimination comes in, and it is staggeringly effective: coupons, sales, discounts, etc etc. The great thing about fixed prices is that there are so many to choose from!
- eli 16y agoOr even easier: put the same shampoo in three different bottles and charge three different prices.
- jiganti 16y agoOr in a more scrupulous light: let some pay for a story and others pay for a commodity.
- Tyrannosaurs 16y agoA friend worked on a documentary about a major UK supermarket a while back. Talking to them off camera they admitted that their budget range chickens and their regular chickens where identical save the packaging.
- eftpotrm 16y agoI'm not entirely surprised but I don't see where's the incentive for them to behave like this. They double the lines they must carry and are surely to some degree both undercutting themselves and overcharging so reducing sales. Surely they could achieve better results with a mid-range pricing and labelling?
- ra 16y agoBig supermarkets also lease shelf space. So they are competing with their leasees products in two different segments.
- rmc 16y ago* I don't see where's the incentive for them to behave like this.* They almost certainly get more money. They are selling the budget chickens to the budget customers at a profit. They are getting the same chickens at a larger profit to other people.
- yayadarsh 16y agoWhen firms offer price discrimination (that's what this is called formally, offering different prices to various classes of consumer) they are making more money by taking the consumer surplus that would have been made (the extra money a consumer would have paid for the good). Think of it this way: a rich man is willing to pay up to $10.00 for the chicken breast that his family needs for dinner, but his blue-collar cousin can only afford $6.00 at the most. Had the grocery store only created one line with the price of $8.00, their revenue from these two consumers would be only the rich man's sale, 8 dollars. If, on the other hand, the store had two lines, one for $5 and one for $10, they can make 15 dollars from these two shoppers! Hope that clears it up.
- netcan 16y agoIn many places people still haggle for most things. Even where I live (Melbourne, Australia) a very non bargaining place, some restaurant districts have bargaining cultures. If you play your cards right, you can get wine and dessert thrown in if you order the steak, site by the window before the dinner rush (makes the restaurant look full). My point is that bargaining norms aren't necessarily evolved from necessity, it's often just cultural quirks. This video is poking fun at a particularly quirky subculture.
- thret 16y agoI'm living in Melbourne and I am unaware of this. Wine and dessert? Surely you must be joking.
- hartror 16y agoTake a walk down Lygon st or Hardware Lane of an evening. All the maitre d's will vi for your business with the best deal. You play it cool and you can get 30%+ off the menu costs especially in a large group (Lygon St for groups, Hardware Lane can be touch and go on tables as it is smaller). I am a bit more shifty as I normally have the target place chosen before I even leave home and will try to make sure the maitre d' seeing me chatting to next door so I can play him off against them. It is all good natured and they expect it.
- vacri 16y agoNow I have an image of Lygon St spruikers madly typing in vi... A near lifelong citizen of Fitzroy and Brunswick, I've noticed that locals have shifted heavily away from Lygon St - for me, I refuse to eat there simply because even after you've had a satisfying dinner, you can't walk down the street without being accosted by every spruiker you come across. Having to walk a couple of hundred meters continually chanting "no thanks, we just ate, we just ate" takes the shine from a good dinner. I'd rather pay for dessert and wine than run the spruiker gauntlet...
- staunch 16y ago
- Goladus 16y agoTrue, on the other hand scenarios very similar to this do happen in real world consumer retail situations. If any of your friends work in retail show them this video and ask if they have any stories about customers.
- cubicle67 16y agoI bargain for almost everything (much to my wife's embarrassment :). One thing I've found, is that if you can't get them to reduce the price, you can often get extras thrown in. I recently bought a fairly expensive coffee machine (a real one, not one of those electronic ones); supplier wouldn't budge on price, but I did manage to get $400 credited to my account, 2x barrista training vouchers worth $150 each, and a few other little bits. Extra value to me, over $700. Cost to supplier, assuming reasonable markup, probably less than $300. Win win. Edit: few things: * Most important of all - don't be a dick. Be friendly, honest and don't waste people's time * If you can, hold of your purchase until you get the deal you're looking for. When I got my macbook, I when to a number of places and in the end got free applecare and a free case. * If you're buying white/brown goods (except computers), a simple "What price can you do on that?" will almost always see a 10% discount, sometimes way more. * Some stock is in constant demand, and you'll almost never get a discount. Black mens trousers, for example. * If something on offer, the person selling it want's to get rid of it, and will most likely negotiate. Best example is food at the end of the day. Walking past a stand discounting the remaining donuts for $6/box, but you've only got $4? Make an offer anyway. er... think I'l stop before this looks like a post on Lifehacker or something :)
- jberryman 16y agoYeah better stop with the haggling for stale donuts ;) What are "white/brown goods"?
- michaelneale 16y agoWell on the software side I saw it as the difference between software as a product, versus bespoke development (although it can get fuzzy with enterprise sales, I am sure) - but the principle is the same. Many consumers == no wasting time (and no need) bargaining, vs 1 consumer: you have no choice.
- zalew 16y agoExactly. Funny is, I've seen this video months ago (or more) linked as 'pay for marketing/advertising/webdesign', so it applies to most industries.