The American media is flooded with books, articles and reality shows about how to get the best bang for your buck when making a purchase. Most of them focus on flea markets, pawn shops and tags sales where haggling for a lower price is all part of the fun. A newer trend is bargaining with mainstream retailers that usually would not consider negotiating prices.
Discounting and haggling in jewellery stores can increase sales, but they cut away at the already eroding profit margins. It can also bring in the hard-core bargain hunters that are often rude, annoying or intimidating. Whether or not to haggle is an important decision the each jewellery store must face.
Many jewellers that specialize in high-end custom designs feel that offering any discount at all dulls the mystique and lowers the perceived value of their goods. They believe all of their customers deserve equal treatment. As one retailer stated, “Even my mother pays the same price as any other customer.” A non-negotiable pricing structure works best when you have truly exceptional items, high standards, and fair pricing. An extremely well trained sales staff that can smoothly deflect haggling and still close the sale is essential.
Some retailers welcome haggling and love the challenge. It is a game and they play to win. A friend of mine had a single business mantra: “GET THE MONEY!” He believed that cash flow was more important than high margins and turning product into cash was his only goal. He always made at least a bit of profit, usually quite a bit. It worked…he was very successful.
Others are forced to haggle due to local customs and cultures. There is little choice in the Caribbean. Port lecturers and shopping experts on the cruise ships get the passengers so worked up about getting a discount that the retailers must offer at least a 50-60% discount to even have a chance at getting a sale. This is only possible by highly inflating the tag prices to preserve a reasonable profit after the illusionary discounts.
I like the middle ground. If the Items have a reasonable and attractive price there is no need to discount, even if there is room to do it But I still hear that mantra telling me to get the money so I take it to the next level…”Get MORE money!”
This is the time to bundle. Instead of taking 20% off on a necklace, reward the customer with 20% on the matching bracelet and 30% on the earrings to complete the set. The customer gets a deal; you sell three items instead of one with the discounts only applying to the less expensive items. Best of all…more money in the till! If you are going to haggle, be good at it. You need to get at least two dollars back in extra sales for every dollar you give away in a discount. Otherwise it’s just money out of your pocket.