Current wall street Journal Opinion Article Essay

Current wall street journal Opinion Article - Essay ExampleIn fact, you make water been fooled after all. Well, I would non be surprised if you have dropped your jaw that wide, but it is absolutely true the terminate rates that you got from retailers atomic number 18 not really discounts they argon skilful the moving elements of the discount game. The most ordinary of assumptions that we have is that discounted productions argon actually stock up goods that were not sold so the retailers are lowering down their price by killering discounts just to avoid heavy inventory at the end of the day. This is your first pitfall. The truth is that retailers are working rearward with their suppliers in order to come up with prices that protect their gross margins the difference between the cost of the product and the kickoff price. For instance, consider a Lee pants that is on sale for say 45% off its supposed starting price of $200 so that you can take it home at $ cx does not actuall y offer you discount at all the pants is actually worth less(prenominal) than $200 the starting price was actually calculated with the discount included. They take the products from their suppliers at a actually low price but they put a flat margin on top of the supererogatory amount intended to take on the discount. The problem is that buyers are not so mindful roughly how much they have spent and if what they have spent really commensurate to the quality of the product that they bought. This should have not been a pitfall in the first place because many of the products these days that were sold at full price but were put on sale for a 40% to 50% discount have illegitimate prices. Think about a pair of shoes that costs $200 it would not appear like a legitimate price especially if the brand is not known and if it has been stocked with up in the store for a long period of time. Now here is the most frightening truth about this discount illusion in an article written by Suzanne Kapner (2013) for the Wall course Journal, she found that from 2009 to 2012, the deals offered by 31 major department stores and apparel retailers increased 63%. That includes an average discount of 36% from what the previous 25%. save what is more astonishing is that the gross margins were flat at 27.9%. This center that notwithstanding the whopping discount offers retailers have for their customers, their gross margins are not affected at all. This is because the margins are set at a flat rate of about 28% the discount is only then(prenominal) added to the price once the margin is established. In other words, the discounts are computed based on the original starting price. And just try to think about it this way if retailers are selling products like they are some giving them, why have not they got into closure yet? They should have long gone bankrupted if this is the case. But majority of the discounts are actually rated into the product. Knowing all about this discount game may appal many buyers, but in fact, the stupidity of this entire thing is that the original price from which the discounts are creation determined if, most of time, erroneous or false considering that original prices normally does not aim for salability no one would ever attempt to buy an ordinary shirt for $50 but starting prices are rooted from the excessive markups of the products. Hence, if you got a shirt for 40% off the starting price of $50, and got it at $30, retailers