"So what's it really worth?"

Opposites do attract, but something my wife and I both thoroughly enjoy is getting deals. We're pretty good at it, too. But we get it honestly - both sets of our parents know how to get a deal and do so regularly. My father, for example, was showing me a couple of beautiful suits he'd purchased recently. Both brand name, purchased at retail at a savings of several hundred dollars. Then came the phrase, "So what's it really worth?". A question of his that I rarely have the answer for.

I typically - true or not - assume a 100% mark-up at retail. That means if the store's cost-of-goods-sold is $100, then they'll be pricing it at $200 (ok, ok, $199.95). Sure some items are loss-leaders - meaning the store takes a hit on the item to get you in the door and buy other items as well. Some items may be ringing up at more like 1000% mark-up. Thats right, an order of magnitude. Try pricing out some AV cables at Best Buy, and then see what you can get them for on-line, you'll see what I mean. At any rate, they're marking it up to cover overhead and turn a profit, thus they can afford to later knock it down "on sale".

The pricing games played at retail are terrible these days - pricing items well above MSRP just to discount it immediately so that you feel good about saving 50%! Not all retailers are guilty of that example, but it seems to be plaguing places like Kohl's and Sears. Some deals are just that - deals. Some are not. How retailers think they can pull this off in the information age is beyond me.

So what's it really worth? How much is a $500 suit really worth? $70 for an HDMI cable? I don't always have the answer to these questions, but I can tell you this: Its generally not worth what they are asking for it. This reoccurring space will be dedicated to those times when we truly, honestly get a deal and have to ask, "So what's it really worth?".


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