Why I hate retail sales--a lesson for all buyers.

[flamin lib]

I first got into retail sales in 1975. It was a camera store at the beginning of the 35mm SLR craze. Back then a retail store tried to make 20% margin on everything it sold; that was what it took to keep the lights on, pay the rent, pay the help, refill the inventory and make a % or two for the owner. I could sell anything that filled the customer’s needs, any brand, any model and only the accessories the customer needed to maximize their enjoyment of the hobby. The goal was to build a relationship, to have a return customer who counted on my honesty and expertise to improve his craft and enjoyment of the hobby. It was a long term relationship and after I left that store to move up the food chain to Manufacturer’s Rep I had old customers call me from time to time.

Then the mass marketers entered the scene. In Dallas it was Barry’s Cameras. The marketing of product and gimmicks replaced the customer relationship. The concept was to sell the product at or below cost and load up the consumer with add-ons of questionable quality and value at exorbitant mark-ups.

Example: Camera X costs $199.00 and there is a 4% advertising allowance and a free case, actual cost is $191. The store would advertise the camera for $190 w/o case, drawing in a lot of customers. The sales staff were paid minimum wage plus “spiffs”. Spiffs are selective commissions on very high margin ad-on sales. For instance, that free case would sell for $20 with a $5 spiff so the camera/case combo would net a $5 profit ($190+$20-$5). Then the sales person would add a filter to protect the lens, a good idea, that cost .75 and sold for $10 ($2 to the salesman). Only problem was that the quality of the lens was filtered through .75 glass instead of the $20 manufacturer's filter (cost $10) made of optical quality glass. Why bother?

The really insidious thing was the add on warranty. Only $35 ($10 to the salesman) to cover basically nothing because statistically the product was covered by the manufacturer for it’s useful life. Then the manufacturers got involved and began paying spiffs directly to the sales people which meant the store could pay even less for it’s employees.

In those days a typical camera cost $200 but the average sale was $350 with most of the add-ons being at keystone margins. That extra $150 netted the store $125 or more and the employee was paid in part by the supplier! The margin on that sale was 35% and the consumer got screwed when before the margin was only 20% and the customer was the most important part of the transaction. What the fuck is wrong with this picture?

It’s worse today. Trusted names like Sears, Radio Shack and even your mortgage broker are doing the same thing. Sales people are paid NOTHING if they don’t shove all this worthless crap off on you. You, as a customer, mean NOTHING to the store except another possibility to sell a warranty.

That is why I hate retail sales and why Walmart’s “Save money live better” is a lie.

[Hello_Kitty]

1. I'm of the opinion that at least 25% of our GDP is scams.

Probably higher. You are right. We are constantly having junk pushed at us from all angles, and usually by some poor schlub who isn't being paid a living wage to do it. The entire country has turned into a surreal Glengarry Glen Ross nightmare.

[flamin lib]

3. The sad part is that we have lost sight of value v cost.

My sister used to backpack into remote areas. She paid outrageous prices for equipment but said to me, "Buy it once or pay for it many times."

Those customers who came to me in the '70 spent LESS and got more enjoyment from the hobby than anybody who buys today on price alone. Yeah, they bought a $200 camera and $150 worth of shit that got in the way of quality imaging and enjoyment of the experience.

Seems we are a lost nation . . .

Save money, live better my ass.

[phantom power]

2. I've been thinking about this in relation to economic niches...

A naive economic prediction would be that somebody would be filling the "quality" niche in consumer products. You pay more for a product X, but it is good quality and lasts a long time, etc.

What disturbs me is that this niche does not even appear to exist for many things.

[flamin lib]

4. It it can be mass merchandized it will be sold cheap with crap to make

up the margin.

Too many people fall into the either/or trap: I can get it cheaper at Walmart so it must be a good buy or For that much money it must be good.

The bitch is that people will shop the expertise of good, honest retail sales people and then buy at wally world.

In any other world that is stealing.

[MindPilot]

6. There is a homogenization factor that has "de-niched" many products..

I used to work for a very large electronics company. Their TV's used be the absolute best in the business, top quality in both design and manufacture and you paid a premium for that. But now a TV is a TV; regardless of what name is on the box, chances are good that its major components came off the same assembly line.

For a lot of household products, the brand is meaningless to the consumer, any differences are in the marketing.

[MindPilot]

5. Very prevalent in the car business.

The actual margin on a new car is very close to zero. Manufacturer incentives are about the only place the dealer can directly profit on the new car sale. So they make up for it on the used car lot, extended warranties, add-ons, F& I, and of course in the service dept. Most of the employees except for administrative people are paid on commission so there is very little direct labor cost to the dealer.
And a car dealer is a very expensive business to operate.

[BadgerKid]

7. Internet shopping doesn't help.

With the internet around, there's no guarantee of loyalty to local vendors. Online retailers can sell closer to cost because of their bulk purchases. The local "little guy" needs to raise margins to stay alive. That in and of itself could drive more people to shopping on the internet. The continued moratorium on a national internet shopping tax probably doesn't help either.

I've gone into local computer stores, who typically don't have the new parts or quality parts on the shelf I'm looking for. Special orders incur the same 30-50% markups that the national B&M technology chains are asking for -- because it a "special" order. Feh. I would prefer buying local if markups were reasonable.

IMO, we thus come full circle back to consumers -- and local businesses -- needing to make concerted effort to reject the "Walmartization" of the economy.

[flamin lib]

8. What we've lost because of the mass marketers is the concept of

value vs price. I used 35mm cameras 'cause that's where my history lies. The same is true of many every day purchases.

If there were a local alternative, I'd use it. As it is the local alternative is WORSE than buying blind on the web.

There are still some locals tho--my neighborhood ACE hardware store is a great example. Everybody there knows where everything is and can help with a solution to some obscure problem. I'll go there and special order before I'll go to a big box discounter.

There just aren't enough people like that to choose from.

[Dr.Phool]

9. I got really pissed at Radio Shack before Xmas.

I was buying the wife an ipod. They had one left in the store.

I said I'd take it. And then they started with their spiel on extended warranties, and screen protectors, and gift cards, and pre-paid cards. I told the "no" several times. Then they got back to screen protectors. I said no, I have some at home.

They said well, but....

I said in a very firm voice, "Just give me the fucking ipod. I don't want any of this other shit. Just give me the fucking ipod". If they guy had inhaled heavily, I'd have walked out the door.

---------------------------------------------------

Reminds me of a time back in the '70s. I was an audiophile back then. I always did my research, and was up to date on the technology.

I decided it was time for a new system, and knew exactly what I wanted. I was going to pay several thousand dollars for it, in cash. I had it in my pocket.

I go to the store, and tell the salesman what I want, and he immediately starts trying to sell me something else. I said 'no thanks, I came for this", and he kept trying to sell me a cheaper system, and I couldn't get him to take my order. I said "Fuck this place", and left.

I think it was Tokyo Shapiro.

[whosinpower]

10. I realize that I am a dinosaur

I am a small biz owner and have owned and operated a picture frame shop for over 20 years. My business relies very heavily on establishing relationships with the clients - some have been with me right from the start of my adventure in business. Some, who have moved away to different cities, or even countries, will save their work and bring it to me when they come back into town.

I am very fortunate, but my own business model, as it is seen today, reckons back to a bygone era where helping people comes first. I don't advertise - haven't for a few years now and my client base is stable. But I feel and sense a growing threat to my small corner of the marketplace. Micheals, Walmart - that big box mentality. It is hard to fight back when you are small. And there are benefits to being small that I would not give up on. I take time to help those who come through my doors. It is all about building relationships. I'll never be rich monetarily, but I am making a life worth living. Not sure if that makes sense.

This Christmas season, my hubby and I went shopping. It was during this experience that I admitted to him that I was a dinosaur - lost in time, and approaching my own business from a different set of priorities. There aren't many of us left. Soon there will be none.

[Sentath]

11. Thank you for being out there

may your scales glisten forever ( ;

[StrawDog44]

12. Caveat Emptor

I hate to be a party pooper here but there's an old saying Caveat Emptor: Let the buyer beware. Basically retailers prey on the stupidity of the consumer. As a consumer, this is why I educate myself as much as possible before making a purchase. However, the American consumer is as dumb as a bad of rocks. But I agree with the OP about the relationship between salesperson/consumer is irrevocably changed and not for the better. You seem to be the last of a dying breed my friend.