Friday, June 18, 2010

Understanding Store Sales and Promotions (Guest Post)

{All this great info comes from Shelley over at Savor the Savings. She totally rocked and wrote up 2 guest posts for me, so I didnt have to worry about you guys while on vacay! Stop by her site and take a peek!}

New couponers have often made the statement to me that they feel guilty or that they fell they are stealing from the stores. This article will help relieves those feeling and help you understand store sales, promotions and couponing.

Companies provide incentives to the stores to promote their items. Once you start really watching the ads you will see that usually more than one store will have the same item on sale, sometimes it is the same week sometime it is within a week or so. The stores are offered reimbursement for ordering large quantities of a particular item or just for promoting the item in a sale, therefore they can lower the price to you and offer it in a sale. These manufacturers usually are also promoting their item with the offer of a coupon. This is why you often see sales and coupons running during the same time period. This is a win, win for the stores, the shoppers and the couponers. Prior to becoming a nurse or a blogger, for years I was a Territory Manager for a wholesale company. The manufacturer would sometimes offer an incentive to me for selling particular items. For example: I would get 50¢ or $1 for every box of a new candy bar or other items I sold to the retailer. You better believe I promoted those items to my retailers and discounted the cost to them to get those items in their store. The store would buy extras, lowering the price to the buyer, increasing their sales and adding $$ to my paycheck. It works and everyone wins!

Loss leaders are very low priced items that entice the buyer. These are products that the stores are willing to take a loss or a very marginal profit on just to get you in the store because most of the time once a shopper is in the door they will pick up other items. They got you in the door for the BOGO sale but you need eggs, milk and bread. They may have lost a little on the BOGO sale but they made a profit with your purchase of eggs, milk and bread. Many businesses do this, car dealers often advertise an auto a low cost, but when you get there you may find one you like much better making them a higher profit.

Stores are reimbursed the price on the coupon plus a handling fee so they are not loosing at all from your coupon use. Stores that offer double couponing are still getting reimbursed for the face value of the coupon plus a handling fee, they will loose the portion that they double...but this goes back to the loss leader way of thinking, it is an ongoing promotion that gets you, the buyer; in the door, once there you will probably buy other items that you need and probably not on sale.

Some big box stores will match sale prices at other stores but they will not match BOGO sales and double coupons. These sale strategies are the grocery stores upperhand in competing with the big box giants. For instance, yesterday I went to Publix for some couponing and got some really great deals that included BOGO and double couponing ( my total bill would have been >$150, saved >$90, paid a few cents over $61) but I didn't buy just items that were on sale. There were other things that I had to have. Was I willing to make another trip to the store just for those items? No, I bought them while I was there, I did have coupons on most of the other items but I needed them and they were not on sale. So the store strategy of BOGO and doubling got me in the door and I bought other items as well, they got other sells and I saved lots of money !

The majority of shoppers are not so coupon savvy, (think back to before you learned how to really shop with coupons) they may use one, two or a few coupons per shopping trip or even forgot and left the coupons at home. Regardless, their ad got shoppers in the store.

Manufacturers offer high dollar coupons with the purpose of influencing you to buy and try their product in hopes that if you like it you will be a loyal buyer in the future. If the coupon says any size are you doing wrong by getting a trial size cheap or even free with it? No, they are still meeting their goal of getting you to try the product, the store is reimbursed the full price of the coupon plus a handling fee, another win, win for all. So if the trial size is 97¢ and the coupon is for $1 the store gets reimbursed the $1 plus a handling fee!

The percentage of people that really use coupons is limited. Your coupon use is not stealing, not immoral or wrong and in most cases it is a benefit to all involved. You are just a strategic shopper that is aware of the potential savings and willing to put forth the effort to get more for your buck.


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