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Tuesday, December 17, 2013

On Charging a Fair Price for a Product

18k yellow gold bracelet with looping wire design and bezel set round orange sapphires
18k gold loop de loop bracelet with orange sapphires
I read an interesting article in the paper the other day about how some of the mainstream, larger retail outlets have started teaching their employees how to bargain with their customers.  In other words they were giving them permission to have an ongoing sale all the time basically for anyone who asks for it.  Unfortunately this type of practice leads to a plethora of ethical issues.  First of all it means that everything is basically on sale all the time.  But if something is on sale all the time, then there is no "real" price anymore.  The sale price becomes the real price and it would require further deductions for anything to be considered on sale.  Secondly it's unfair to customers who don't know to ask or are too timid to ask for a discount.  They end up paying more than anyone else is for exactly the same item.  These people also end up supporting the sales prices for the other customers because without some of the people paying full price, the stores couldn't afford to give the discounts they are to the ones who ask for it. Third, and most importantly, it means that most stores will raise their prices to cover the discounts they are being asked for. This is both unethical and again punishes those who can't, or won't, ask for the discount.

My question goes back to one I brought up recently (in this article about the airline industry).  Why is it that we have such a big problem with charging a fair price for a product and sticking with it?  Admittedly a lot of this issue falls on the heads of the retailers out there because they encourage this kind of behavior and we seem to fall for the hype and the idea that we are getting some kind of a "deal".  Unfortunately usually we aren't getting a deal, for a variety of reasons.  Often the retailers simply mark their items up more knowing that they are going to be negotiated down, so it's not really a deal. 

Or sometimes stubbornness on our part may also lead one to think they're getting a deal. I have a very good friend who hates to pay full price for anything (despite the fact that he can afford pretty much anything he wants---in part it might come from when he was a lot poorer).  He told me a story once of spending three hours driving around town to get a better deal on a set of tires.  I think on that search he managed to ultimately save himself a hundred or a hundred and fifty dollars.  Sounds pretty good on a $600 purchase.  But let's say he paid the full price at the first place.  He'd have three hours to do something far more productive with, whether that would be more time at work (where he would get paid), or with his family, or just going to see a movie and relaxing a bit.  Now I know we don't think along exactly the same lines (my idea of a vacation is to go somewhere for awhile and do nothing---his is to go do everything possible in the area he's vacationing in) but in three hours I could have: 1) made up a beautiful new piece of jewelry worth way more than $150 2) caught up on my sleep so that I could actually see straight most of the time, 3) spent some time with my wife doing something we like to do together, or 4) gone out to get some needed exercise thereby increasing my life span a bit.  All of these things are worth far more than the money I would have saved if I had pursued the same exercise in tire purchasing. 

So in my store I believe in putting my pieces out at a fair price for the value you get.  I have an advantage over many retailers in that you can't get my work anywhere else but that doesn't mean that I sell my goods for more than they are worth.  I price it in a way that lets the customer get something of value with stringent warranties, that is creative, made locally, often with recycled materials, allows me to make a modest living, and allows the customer to have something that very few other people have. People know what to expect when they come in my shop and that's exactly the way I like it.

The bracelet at the top is a piece I just put out. It's one of my loop de loop chains but I have added some of the orange sapphires I got from my new German connection that I also got the jellyfish earring carvings from.

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