Small shops refuse large discounts | Deal – tech2.org

Small shops refuse large discounts | Deal



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NEW YORK – When Mark Aselstine founded Uncorked Ventures, an online wine retailer, he thought he should offer discounts, so he gave a 30 percent discount to people who bought wine baskets or subscriptions for monthly deliveries. But when he badyzed the sales, he did not feel that the agreement helped, and he suspected that people who wanted first clbad wine were actually disconnected.

"People who paid $ 50 or $ 70 per person, bottle of wine did not look for a discount," says Aselstine, whose company is based in Berkeley, California.

Many small, independent retailers find that big discounts do not motivate people to shop at their stores or websites. Or, they can not afford to use them: unlike national chains, they do not have the large sales volume that allows them to reduce prices without hurting profits.

Retailers who want their stores to have some prestige also believe that cuts in prices can lower their appeal. And some store owners do not want to play cat and mouse with customers, continuously lowering prices until buyers finally buy. Those who grant holiday rebates often make them modest or limit them to big days like Small Business Saturday or Cyber ​​Monday.

Last year, Aselstine decided to experiment, ending all discounts except 10 percent off during the weekend of Thanksgiving. Its revenues increased 20 percent from the previous year, in line with the sales increases of the previous year. Their most expensive wine sold better than when it was discounted. This year, he is not offering rebates; Even without a Thanksgiving discount, sales were good.

Lea Thompson learned in the worst way that being a small retailer and offering great discounts does not mix. Wanting to be in line with other retailers during the 2016 holiday season, she gave customers of her online women's fitness store a 15 percent discount plus free shipping.

"After many customers took advantage of that, including some with incredibly large orders, we realized that those deals reduced our profits instead of helping them," says Thompson, owner of Fit Fly Fab, based in Dyer, Indiana. .

This year offered Cyber ​​Monday offers, but they ended at midnight.

Putting profits aside, it can be risky for some small retailers to offer big discounts, says Elaine Kwon, a Seattle-based online retail consultancy.

"The customer is debating between a brand they love is the full price and a brand giving them the discount," says Kwon. Buyers can forgo discounts if they think they are getting good value, even at full price, he says.

Peter Manning, a retailer of men's clothing 5 feet, 8 inches tall or less, tries to convey to buyers that it offers quality at a fair price.

"We are clear about our approach, that we are not a traditional retailer that offers big discounts, and once they understand our philosophy, they seem to be good," says CEO Jeff Hansen.

The New York retailer, which performs 90 percent of its online business, offers first-time buyers a 20 percent discount throughout the year, and established customers get the same break every weekend of the year. Thanksgiving.

But the rest of the holiday season and the year, the only sales are at the end of a season when it's time to change old merchandise.

Peter Manning's revenue has more than doubled each of the five years he has been in the business, says Hansen, who believes that the sales have become something of a game in retail.

"No business can survive selling things with 70 percent discount, so obviously they are marking things, only to be able to discard aggressively later," he says.

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