If you’ve been searching for cheap office supplies online or discount stationery in your area, then by now you are probably feeling like you have stumbled onto the set of Continue At The Circus. It’s difficult to get a read on what’s an appropriate price to pay for pens, paper, printer or biscuits – specially when you’re ordering in bulk. Whomever your dealer is, you are prone to achieve massive savings over high-street prices.
On the contrary, you are able to still wind up paying 2-3 times over the odds. A price reduction promotion or buy-one-get-one-free offer is actually a warning signal, and almost definitely forms element of a pricing strategy that can see you paying more for stationery and office supplies.
If you’re a financial director or office administrator, you may be clued in the big secret – but throughout us, here’s the one secret that’s planning to wipe off as much as half your workplace supplies expenses in a single swift movement:
Stop looking for Bulk Office Supply
It’s not just a call to arms over quality control – for many situations, it could be also appropriate to choose the budget option rather than the high-end one. Nor is it about wastage and logistical planning, although proper cost analysis is a crucial element of managing your office budget. Rather, it’s an issue of Bayesian signalling; Gricean logic; and, ultimately, basic principles of pricing. Even though there are complicated concepts at the job, it boils down to simple human nature.
We’re hard-wired to visit right after the option with all the big shiny ‘discount’ sticker on the front – even if it’s higher priced. It’s a bizarre little quirk from the brain, and something that’s hard to shut down – as US retailer JC Penney discovered to their ongoing regret.
Way back in 2012, the supermarket giant announced that they were putting a conclusion to their promotional pricing strategy, which saw everyday staples at a permanent discount. Similar to most supermarkets, JC Penney was artificially inflating their shelf prices before offering them an arbitrary discount. Occasionally, a 50% discount was actually a 10% increase on the recommended list price.
The incoming CEO Ron Johnson announced a shift to an alternative, ‘honest’ system of pricing with no fake discounts; two-for-one deals; coupons; prices ending in 9 or 7; or any other shifty tactics. The newest system was intended not only to less expensive costs, but to aid consumers make informed decisions with regards to their groceries and budgets. The reality that Honourable Ron pxuovj Jobless Johnson within under a year probably lets you know how successful that strategy worked.
Customers abandoned JC Penney in hordes, some with a feeling of anger over whatever they regarded as a betrayal; revenue and share price went into freefall; as well as the company quickly returned for their previous technique of artificial markdowns. When offered the identical products with a lower pricetag, customers still preferred to pay the higher price – so long as it experienced a discount sticker on it.
Actually, JC Penney customers were so offended through the disastrous strategy that brand loyalty not merely went down, with perceived trustworthiness falling as prices decreased; but stayed down too. The business actually issued an apology to jilted shoppers, however the customer base stayed away until prices were raised – in some cases higher than they originally were. A niche commentator had this to express:
“The bargain-hunting website dealnews has since commenced tracking prices at JC Penney. What it has discovered is the fact that prices of certain items-designer furniture, specifically-have risen by 60% or more at JC Penney almost overnight. 1 week, a side table was listed at $150; a couple of days later, the “everyday” price for the same item was approximately $245.”
Discount pricing strategies are virtually par for the course on the high-street – and, as the BBC uncovered, a lot of them are as arbitrary and misleading as JC Penney’s. And, in most cases, they make sense coming from a B2C perspective. The Chartered Institute of promoting claims that attention spans are limited to 8 seconds, as opposed to the 12 seconds that they were during the early 2000s.
We are now living in the data age: a world of multitasking; 140 characters; ‘top 10 everything’; truncation and enumeration and fast food; where consumers have to make decisions quickly based on limited information. Discounting is definitely an immediate recognisable signal that the wise purchasing decision has been made, (whether true or not).
For somebody associated with B2B procurement, however, discount pricing needs to be public enemy number one. Unfortunately, every workplace from your local chip shop to the condition of New York City has at once or other fallen victim towards the same ruses that function in the supermarket.
Promotional pricing strategies in the office. It’s often said disparagingly of politicians they don’t know the cost of a pint of milk, (or when it comes to the mayor of the latest York, the price of a pen and paper). In all honesty, however, none of us do.
Milk, bread, as well as other staples are generally far less expensive than they must be – for numerous reasons:
They might be used as being a loss leader, to draw in customers who’ll then pay more for other items. They may be inferior-quality versions employed to undercut competitors. They may be bundled with some other items included in an up-sell; sandwich-drink-and-snack deals at lunchtime are a wonderful example, but you can find invisible examples like coffee strainers and coffee (or ink and printers). They might be used to build trust or complacency in the shopper, who will often judge all of the prices of any retailer based on the first or most common items that they purchase from them.
They can use tricks of human perception – like charm pricing (like.9 or.7); pricing under benchmarks (including £1, £5, £10 and so on); or perhaps just including information that looks relevant but isn’t. A thing that is advertised as “Only £1.99 when you buy 2!” may appear to be a price reduction, however if the single unit costs £0.99 then it’s actually more expensive.
Each of the tricks outlined above, utilized for milk and bread, apply equally well to equivalent office basics like pens and paper. You can verify that for yourself with just a few minutes of searching – or checking your most current receipt.
In everyday life there’s not a whole lot we could do about this type of obfuscation. Very few people have enough time, resources or inclination to research and compare grocery prices on an item-by-item level – and also the opportunity costs of rushing from supermarket to supermarket in the quest for the cheapest potatoes by gross weight in reality probably outweigh the rewards. That’s why JC Penney’s consumers are slowly returning because the prices are rising.
A business facing similar purchasing options, however, has the benefit of a monetary director to guard its decision-making process.
There’s still scope, even or maybe especially in age of information, to possess someone on staff that can perform considered, researched procurement. Someone who can spend some time to do a proper cost analysis; engage in slow thinking; are available to your conclusion based upon facts as opposed to on sound and fury.
While honesty didn’t exercise very well for Ron Johnson, we at CP Office still feel that it’s both worthwhile and worth a shot. So, unlike a number of other stationers and vendors of office supplies, we would rather offer an impartial cost analysis to the potential customers, along with the benefit of our genuinely huge discounts. With CP Office, there’s no fuss and no tricks – just an honest discussion about what’s right for you along with your office.