Sales

Vol.2 No. 83 February 15, 2008
The Bogus Economist
Sales


Ever since I wrote about our government being for sale, I've been a lot more sensitive to sales, generally. Over the last three months, I've been bombarded by Pre-Christmas Sales, Post-Christmas Sales,, End-of-the-Year Sales, Beginning-of-the Year Sales and some more imaginative ideas like Santa Sale, Kick Back Sale, Employee Pricing Sale and This is It Sale. It wouldn't have surprised me too much to see a Les Schwab Scratch-and-Sniff Tire Sale or a Two for One event at the local mortuary.

According to my trusty dictionary, a sale is “the exchange of a commodity for money.” However, the way we seem to hear the word is “the exchange of a commodity for far, far less money than it's worth.” Presto! A bargain! Hence, lots of sales.

The Law of Unintended Consequences dictates any action will set off an unwanted reaction. One of my strongest reactions to Big Sales is “If an item is selling at a fifty percent discount, how much was I ripped off when it was full price? If a store is still making money at half of what it was, how much have they made on stuff that was sold for twice what I could have paid later?”

That's one question. Another is the paradox of infinite expandability. I saw a sign advertising “Huge Discount Sale – up to 70% AND MORE!” Hold on. What does “up to” mean if there's MORE? If I were in a building and the elevator went up to the thirtieth floor AND HIGHER, would I eventually reach Heaven? Would going down to the Bargain Basement AND LOWER lead me to perdition? I can hardly wait for a “Hundred Percent and More Sale” where they'll give me money to take the stuff away.

I discussed sales with a real, honest-to-goodness economist, Dr. John Cooper, a former professor at Lewis and Clark College and, at present, a successful real estate broker. He talked about the differences between products that are socially useful and products we are taught to want through advertising, which Dr. Cooper says drives our consumption. So who's driving the drivers?

Once, the villain was often pictured as an old man rubbing his palms together. “Ah,” he was chortling, ”Here is a new design that looks like a pregnant fireplug. All I have to do is pin a French-sounding label on it, mark it at $450.00 and advertise it at thirty percent off. The women will knock down the doors.” Women are smarter nowadays, but both sexes will shell out $6.99 for something they won't touch for seven bucks. It's not spending the extra penny, either. Research shows that we ignore the pennies and concentrate on the dollars. Seven is more than six. If there is a sign reading “BIG SALE!! Two dollars apiece – three for $6.99,” there are some who will buy three.

The “Nothing Down” sale is fun, especially when you don't have to make a payment until 2009 or so. If there's anything more absurd than making you pay for something until it's worn out, it's making sure it's worn out before you have to pay for it. This leaves you needing a replacement, which can be bought with nothing down and no payments until 2011.

Does the Bogus Economist advocate the end of sales? Heavens, no! Trying to economize and get as much as possible for a shrinking dollar is becoming a way of life for more and more of us. All The Bogus wants is for the value to be real and for the buyer to be aware of what he or she is getting for the buck. This is called Truth in Lending and has been fought tooth and nail by many manufacturers because they're mortally afraid consumers might discover the money goes for the packaging instead of the product. If you don't believe me, check the labels of some headache remedies. When a sale seems like a chance to get something for much less than you've been told it's worth, the key word is “told.”

There wouldn't be any problem at all with sales if we knew what the price of the product was to start with. For instance, I know cotton candy is composed roughly of a spoonful of sugar and some air. The cost of the product, including mechanical wear and tear, is about a nickel. The last time I bought cotton candy it set me back a dollar. This is a huge profit margin, but I don't mind. I know how much the stuff costs. I like cotton candy and I'll pay it. But how about an iPod or a Starbuck's mocha? Or a box of cereal? Or a Barbie? Should the buyer be told the cost of manufacture? How about the wholesale price?

There have been a number of efforts to get this information out, but all have been defeated on the grounds that telling customers how much profit the companies were making would reveal proprietary secrets to competitors. Instead, we get the Manufacturer's Suggested Retail Price (MSRP), which allows dealers to “slash” prices in order to offer great – SALES!!!!

Ready for Mothers' Day? Fathers' Day? Fourth of July? Don't worry. You can practice on Presidents' Day. It's just around the corner.

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The Bogus Economist © 2008