I always enjoys finding a good bargain and am grateful for any discount a retailer may offer me, but my decision on where to shop is going to be based far more on quality and service than on whether I'm offered a discount (unless it's a really big one, then I can be bought
) Unfortunately I think many of us have become so jaded that we tend to view
all retailers with quite a bit of cynicism and even distrust. There's a tendency to assume retail pricing is just a shell game where the prices of products are artificially inflated so they can then be offered at a "discount" in order to create a sense of value. While this may sometimes be the case, there are a lot of other factors that must be taken into account when looking at retail pricing vs. online. Profit margins for retailers who now must compete with online sales are much slimmer than in days past.
A few things to consider..
A brick and mortar specialty shop such as Woodcraft has to maintain a large and diverse inventory of items to be competitive and meet the needs of their customers. Looking at the plethora of items these shops carry, how rapidly does that stuff turn over? Consumables sure, but how about all those knobs and handles, specialty router bits, etc? All of that inventory is already paid for by the retailer, but due to the nature of the shop a lot of it is going to have very low turnaround. On the other hand, an internet retailer may stock everyday items, but for the less common items will only order on an as-needed basis, or more often simply have it drop shipped to the customer. It's easy to look at retail prices vs. online and think "I'm getting ripped off", but all the extra overhead carried by the retailer has to be paid for somehow...
also-
That 10% discount DOES NOT mean the retailer is making 10% less profit on the sale. Their costs are just the same, discount or not. So- say there's a 50% markup. Out of that 50% the business has to pay rent, payroll, etc. Let's say that overhead accounts for 1\2 of the markup, which leaves 25% of the total sale price as profit to the company. Well, 100% of any discount you are given comes out of that last 25%, so that 10% discount he just gave you was actually 40% of his profit. I wonder how any of those customers would feel if they were asked to take a 40% pay cut?
I have no idea what their numbers really are- mine are purely arbitrary- but I do know my business very well. So- a real world example. I'm a dentist. Everyone knows dentists are rich, right? Well, over the 7 years prior to selling, my practice ran at about 75% overhead (just like the numbers above). Since I wasn't a retail establishment I didn't have "sales" per se, but I did have things like discounts to patients, PPO insurance deductions, bad debt, etc. 100% of this came out of the 25% that was supposed to be my paycheck. So- that 10% discount I just gave you was actually 40% of the paycheck I was supposed to receive for it.
So guess what? I'm not rich, and I very much doubt the owners of WoodCraft are either. I know I'm not totally comparing apples to apples here, but I think it illustrates my point that that small discount (10% isn't much to ask for, now is it?) has a MUCH larger impact on the business than you would think at first glance. I actually don't care much for WoodCraft, but I do respect their decision not to offer a discount for NCWW members- I doubt it's based on any sort of greed or indifference to our community, it's simply what they need to do to maintain their business model. I make a lot of purchases online, but I also make an effort to support local businesses, because if I don't then they won't be there to support me when I need them either.
Gads...maybe I should write novels.
