Discounts
Documenting my startup journey
This is one in a series of posts where I document my startup journey. If you just landed here, go to this link and you’ll find all the other posts in the series.
Big Discounts. Flash Sales. Buy-One-Get-One-Free’s.
That’s a list of things we dislike at Bear Appeal. The reason is simple: people get addicted to these.
We have our customary ‘10% off on your first order when you subscribe to our newsletter,’ and ‘15% off during the first week’ whenever new products are introduced. We have also discounted our products up to 20% during the past holiday seasons, but that’s about it.
There are no ‘friends and family’ discounts. Even my brother gets t-shirts from me at full price. The ‘no discounts unless we absolutely can’t help it’ policy applies everywhere possible.
There’s a lot of thought that goes into pricing a product. If a certain price does not match the product’s perceived value, the market will take care of that and force the seller to re-evaluate. When no such force exists, it must be an indication of the market’s acceptance of that price. From what we see, we are confident that the market agrees with our pricing. Hence, no discounts.
But, there is a set of people who are always looking out for ‘deals.’ This is only rational. I love Black Friday, too. I understand. When these customers come to shop with us, they ask us whether any discounts or offers are available. If we have any, we let them know. If we don’t, again, we let them know. Sometimes they decide to buy even when there are no discounts. Sometimes they don’t.
Here’s a typical conversation that we have with this kind of customer. Let’s call this guy Dave. Dave is chatting with me using the chat tool on our website.
Dave: Hey, do you guys have any offers going on?
Me: We don’t have anything at the moment. However, if this is your first order, you can get 10% by signing up for our newsletter. Would you like to do that?
Dave: No, I’d rather not. I’ll just have a look around.
Normal conversation. Happens every day. In the end, we both go on our merry ways.
But there is another kind of discount hunter. This guy is not just looking for a good deal. This guy is a cheapskate, and has no regard for the amount of effort that we put in to running a business.
This is how a conversation with the second person goes. Let’s call him Rick.
Rick: Hi, I want to buy these 3 t-shirts, [goes on to name them], how much do they cost.
Me: This comes to 4600 rupees. How would you like to pay?
Rick: No discounts?
Me: There’s a 15% discount applied to 2 of the t-shirts since they were newly introduced. This price is after discount.
Rick: Can you give these to me for 4200?
Me: Sorry, we can’t offer further discounts for this.
The fun part is, the Ricks keep coming back every now and then, always ready to haggle, always demanding products to be sold at prices they pulled out of thin air. Even when buying products that are already on sale, they want to drop the price even more.
The Daves are okay. They’re just looking out to save a bit of money, and grab a nice deal if it becomes available. If you have none to offer, they understand. They know your products are priced that way for a reason.
The Ricks? You don’t need the Ricks. Shun them, and run away. You’re better off without them.
