Jo Buckerfield (pictured), design director of Your Space Living in Glamorgan, casts doubt on the validity of January sales – and explains why clients still take the bait
As we enter the New Year, the usual suspects are promising the earth with bogus sales and headline offers. I’ve seen it all before and, during a long career of more than 15 years, I’ve yet to find a genuine kitchen sale that is truly worthy of a customer’s attention.
Everyone loves a bargain and the seductive headlines are all over the place – ‘40% off selected cabinets’ or ‘30% off the whole range’. It all sounds great, but the reality is very different. Consumers don’t buy a kitchen very often. So how do they know the price they pay in the sale is significantly lower than the non-sale price?
The factories that manufacture the cabinets don’t offer any kind of sale price to the retailer. The retailer pays the trade price, adds a mark-up and sets a price that is suitable for the market they are selling to. That mark-up needs to cover the running of the business, salaries, marketing and future investment. The business has to be viable or the whole system will break down – and that’s no good for anyone.
Are these discounts for real?
So how can a retailer justify a 40% discount and still keep his head above water? The simple truth is that he doesn’t deliver a 40% discount. Some kitchen retailers are, at best, economical with the truth. At worst, they are deliberately misleading the public.
The way this is done is so simple and so obvious it’s amazing anyone would fall for it in the first place.
Essentially, the starting price is inflated to 40% above the necessary mark-up and slashed alongside a well-publicised marketing campaign. I know it sounds crazy, but that’s all there is to it.
There is a reason why a retailer will never cut their prices. In an effort to illustrate why, I’ll use the example outlined in the book ‘Why Your Customers Suck’ by Jon McCulloch.
“Let’s say you’re selling widgets at £135 with a margin of 35%. This means your cost of supply is £100, and you make £35 on each sale.
Now let’s cut the price by 10%.
So now you’re selling widgets for £121.50, meaning your profit on each one is now just £21.50. In other words that 10% price cut has slashed your profits to just:
21.50/35=0.6143 of their previous level.
To put it another way you just cut your profits by 38.57%.”
After reading Jon McCulloch’s words, you’ll understand why it’s simply impossible for a high-street retailer to offer such huge discounts and stay in business.
So what does this mean for consumers? Well, it means they should be far more fussy about their choice of kitchen retailer. If a retailer is having a ‘SALE’, people need to compare their pre-sale prices with other retailers offering a like-for-like product. If they feel they are being misled, then they should simply walk away. A new kitchen is an important purchase. They shouldn’t buy a kitchen from a person they don’t trust.
Consumers should also adjust their expectations. If a kitchen retailer is attempting to lure customers with a low price, they should expect a lower quality product and service. There are lower quality kitchens on the market that can be purchased at a very reasonable price. If price is the most crucial factor, they should simply go for a low-cost kitchen cabinet. As long as they understand what they’ve bought before they pay, they’ll be satisfied with their decision. It’s that perception of being misled by a salesman that will flood people with regret as the years go by.
Quality kitchens don’t come off the shelf
Many modern kitchens are made to order. I know for a fact that when I place an order with my German or British supplier, the kitchen is built from scratch in the factory in line with my design and specifications. These aren’t flat-pack units that have been stockpiled on a shelf, waiting for a buyer. You need to have a surplus of supply before you’ll see a true reduction in price. That simply won’t happen with a Your Space Living kitchen.
I run Your Space Living differently from the majority of kitchen retailers. Firstly, I establish a fair and reasonable price for the kitchens I sell and back that up with a level of service that cannot be beaten. I believe that makes Your Space Living the best value kitchen designer retailer around. My pricing structure is transparent and payments are staggered to help the client cope with the financial pressures that come with an extensive home renovation. That’s how it is all year round, and I have a long list of satisfied customers who will confirm how well this system works. Those who think it’s better to pile them high and sell them cheap are in a race to the bottom, where they will be swallowed up by the bottom feeders.
The next time a consumer sees an advert for a kitchen retailer that offers a huge discount on a new kitchen, they should remember the old rule. If it looks too good to be true, it probably is.