Sales can be amazing events that let kids get the most out of the little money they have. Exactly why stores go through these events can be confusing, however—after all, isn’t a business losing out if they sell stuff at lower rates? Here’s how you can explain the purpose of the discounts.
What Companies Want to Do
Most businesses have sales at least occasionally for four basic reasons:
- To get you to try the products
Sometimes people don’t buy items simply because they see the purchase as being too risky. If the item is pricey and they end up not liking it, they either have to go through the trouble of returning it or they’re out their money. When a store lowers its prices through a sale, though, customers are more willing to buy because they know they’re not putting as much money on the line. More often than not, customers who like stuff they buy on sale will end up coming back to buy it again, even if it’s no longer priced at a discount. In the long run, this repeat business ends up earning the company a lot of profit. Companies use this strategy on all kinds of goods, but they especially like to use it when they’re trying to make customers aware of new items they’ve just started to carry in their stores.
- To move excess inventory
Businesses usually use tools like computer programs and barcode scanners to figure out what items they have in stock and how much they need to order. If these tools work well, then the company ends up having just the right amount of items and doesn’t waste money in producing or storing extra. Mistakes do happen, though, and when they do, businesses end up with more stuff than there’s a demand for. They have a sale to try to move out the extra items, knowing they’ll need the space in their storerooms or warehouses for other products in the near future. The need to make room for new products is why you’ll often see big sales after each holiday, as well as at the end of each season.
- To improve company reputation
Any time you buy something, whether it’s during a sale or not, you have an experience with the business selling the product. This experience can have a lot of different little parts, such as how the items look on the shelf to you or how friendly the cashier is to you as you pay. Sales can get you in the door to see what the business can do in all these areas. If you have a good experience as you shop a sale, you’re more likely to trust the business and come back. So companies have sales in part to build a relationship with you, get you to see them in a positive way and encourage you to make more purchases.
- To get more money from you
It’s pretty hard not to see regular-priced goods as you shop a sale. For example, you might see full-priced batteries right next to a music player that’s on sale. You might buy the batteries even though they’re not on sale, because you know you’ll need the batteries if you buy the player. In fact, it’s not uncommon for people to walk into a sale and come out with more non-sale items than sale ones, especially if the store workers place the sale items in a location that requires you to walk through a lot of the store to get to them. You might also buy items you normally wouldn’t on impulse, just because they’re at a good rate because of the sale. With more transactions happening, the store still can make a good profit.
Companies always have a purpose for holding sales. Sometimes, the reason is to make the business look good, while other times, it’s to get you to try stuff or get rid of extra products. Just about every store wants to make money during these events. Despite the fact that a sale benefits the business, don’t be afraid to shop during one. Going to a sale can mean you get something you normally couldn’t afford or get more of what you want, so as long as you do your homework and know ahead of time what you’ll buy, they can be a great way to save.