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Retail loss leaders.

 
 
Reply Sun 10 Oct, 2010 07:41 pm
I'm being tempted by what is an obvious loss leader and I'm not sure whether to fall for it or not.

(For those that don't know: A loss leader is product or service sold at a substantial discount in order to generate additional sales.)

I have the ultimate in crappy kitchens. My appliances are hellish. There was an ad in today's paper for: fridge (I desperately need), stove (I need), microwave (I kind of need) and dishwasher (don't need) for $1,500.00.

These are all okay appliances, not great, but goodish.

We're considering a mini-makeover of our kitchen (new applicances, new floor (practically free for us), a bit of paint (next to nothing), to tide us over for the next 3-5 years until we can afford to build a new kitchen.

I'm still skeptical. I've worked in a retailish type business and I understand loss leaders are often bad investments.

I'm just wondering what your opinion on them might be.

Thanks!





 
Butrflynet
 
  2  
Reply Sun 10 Oct, 2010 08:36 pm
@boomerang,
What brands?

3 to 5 years until a major overhaul? Will you be replacing the appliances again during that major overhaul or will these you label as a loss leader be included in the overhaul? If included, and they fit in the future design scheme and are of decent quality, buy them now. Things rarely get less expensive in 5 years and neither does the cost of money.

On the other hand, if these appliances will not be the final selection for the future design scheme and you'll be replacing them again in 5 years, don't waste your money. Just replace the frig and save the rest of the money for the future remodeling costs.
CalamityJane
 
  1  
Reply Sun 10 Oct, 2010 08:44 pm
I once bought a dishwasher that was quite cheap and running okay, but just not
perfect. I always regretted not paying the $$$ extra to get a really good one.

Check out IKEA, boomer. They're selling appliances as well and they're great European brands. For $ 1500 you get excellent energy-efficient products.

Butrflynet
 
  1  
Reply Sun 10 Oct, 2010 08:45 pm
@Butrflynet,
For comparison, I took a look at the Home Depot website and this is what I found in their appliances section:

Home Depot - mid-range refrigerator is $700 - $900

Home Depot - mid-range dishwasher is $600 - $800

Home Depot - mid-range electric range is $800 - $1000

Home Depot - mid-range microwave 9s $400 - $600

Total of all mid-range appliances at the low end is $2,500.

That's quite a difference from what the ad in your paper is offering. You might want to compare features and quality with those available on the Home Depot site to confirm or debunk your feeling that these may be inferior loss leader items.
0 Replies
 
Butrflynet
 
  1  
Reply Sun 10 Oct, 2010 08:48 pm
@CalamityJane,
Here's a link to their kitchen appliances page:

http://www.ikea.com/us/en/catalog/categories/departments/kitchen/10477?pageNumber=0
CalamityJane
 
  1  
Reply Sun 10 Oct, 2010 08:55 pm
@Butrflynet,
Thank you, Butrflynet, that's nice of you. I wanted to add the link but forgot....
0 Replies
 
dadpad
 
  3  
Reply Sun 10 Oct, 2010 09:25 pm
I dont believe this is a loss leader. What else can they sell you? Its more like a bulk order discount.
Remind yourself that if it seems to good to be true, it usually is.

Are the brands well known and do they have a decent warranty on ALL the appliances? Google and review.

Dont be pressured into the sale. ie we're only running this offer for a few days. If they can sell at this price today they can do it next week.
0 Replies
 
tsarstepan
 
  1  
Reply Mon 11 Oct, 2010 04:48 am
@boomerang,
As far as I understand, loss leaders are used to draw in customers. They themselves aren't the desired objects the store wants to sell. They want the customer to buy the more expensive model. The model with the greater profit margin. Or at least the customer to buy the loss leader AND other items which are not loss leaders.

Many times, there is nothing wrong with the items themselves. They tend to be attractive items that grab the attention of the typical customer who wouldn't usually go to that store in the first place. My fear over the practice is the scummy and grey ethical practice of bait and switch. Car dealers are known for this. They advertise a really really low price and in very tiny print say they have only X amount of cars or other items at that price. When the customer gets to the store (perhaps later then usual) the salesman indicates they no longer have any more of those items at that cost and would the customer like to look at and buy another alternative to that loss leader?

Often this bait and switch is based in fraud and the store never has enough of the products at the loss leader price.

As for your appliances? I'd take them with a grain of salt. Still an educated consumer is the best type of consumer. Always look at the individual models and look for their respective product reviews in whatever third party/neutral electronic product review sources (Consumer Reports is still one of the best sources of electronic goods available).
0 Replies
 
boomerang
 
  1  
Reply Mon 11 Oct, 2010 06:45 am
Thanks all!

They're Fridgedaire products. All of the products are on sale individually for about 25% off, with the bundle it's like getting the dishwasher for free.

We went to Home Depot but they didn't come close to the prices. I hadn't thought about Ikea but I'll check that out!

Yes, all of the products will likely be replaced when we build a new kitchen. We want a gas stove and we can't have that in our current kitchen. The biggest problem though is size -- our kitchen is tiny and the kind of products we'll want for the new kitchen simply won't fit in the current kitchen.

Replacing them all makes sense in that they are all 20-30 years old and were most likely the cheapest thing the owners could find (they rented this house out since the 70s and were notorious cheapskates). They're all terribly inefficient and completely dilapidated.

You hit the nail on the head, Tsar. Mr. B is already thinking upgrade. I say get something decentish at the best price. In 3 years we can donate it to Habitat and get a tax write off on it.

Typically we're both the type to spend a little extra and get exactly what we want but in this case it simply won't work.
0 Replies
 
Phoenix32890
 
  1  
Reply Mon 11 Oct, 2010 07:18 am
Boomer- Check out the reviews on the net. I was looking for a new microwave oven, and was shocked by what customers said about units that had good reviews in Consumer Reports. When checking the reviews, be leery of the product that has only a few reviews, usually glowing. The net is anonymous, and one never knows who writes these reviews. When I see a product that I like, one that has many reviews, and there are some one star ratings (like on Amazon), I look for a pattern. If a half a dozen people have similar complaints, I take it seriously.

Also, as been said before, be careful of the "bait and switch". Often the sales person will steer you away from the advertised product to something that is "much better".

IMO, it is a good idea to check on the net, and write down the items that you would really consider. In this depressed market, many stores will, if pushed, will play "let's make a deal", even on items that they have not featured.

boomerang
 
  1  
Reply Mon 11 Oct, 2010 08:22 am
@Phoenix32890,
I bought my washer and dryer based on the Consumer Report ranking of "best buy" and I haven't been thrilled with it. In fact, it's the only product I've purchased that I ended up extending the warantee on since I had to have it serviced twice while it was still under the original warantee.

I remember attending a business seminar once where the guest speaker said something like "if someone is happy with a product or service they might tell one or two people; if they're unhappy with a product/service they'll tell everyone they know". I think internet reviews bear this out: it is so much easier to find bad reviews than it is to find good ones. Everything is crap, according to the internet.

Reviews are further complicated by the fact that so many manufacturers use the same componets and even the same factory. For example: Frigidaire, Maytag, Electrolux, and LG are all made by the same company, using the same parts but have they slightly different design features -- mostly cosmetic.

I know the product I'm looking at is offered as a loss leader -- which doesn't mean it's bad but it does make me suspicious.
CalamityJane
 
  1  
Reply Mon 11 Oct, 2010 08:43 am
@boomerang,
www.epinions.com is usually a good check for reviews.

I have a Frigidare stove and microwave and a LG refrigerator. The first two are
13 years old - never had a single problem with it, and the LG is around 6 years
old - no problem either. I'd definitely buy their brands again.
boomerang
 
  1  
Reply Mon 11 Oct, 2010 08:49 am
@CalamityJane,
Thank you so much. The opinions of people I know count much more than online opinions. I've wished several times that I would have spent a bit more and bought the washer/dryer you recommended instead of the Consumer Reports one.
CalamityJane
 
  1  
Reply Mon 11 Oct, 2010 08:54 am
@boomerang,
Yeah, Miele washer/dryers are hard to beat, mainly because all parts inside
are stainless steel. Plus they give you a 20 year warranty. Mine are running (many times on overload) for 15 years without any repairs. The front loader
never had any mold on the rubber ring at the enclosure either.
Dto. for the vacuum - can't beat the Miele, and I've had just about every other brand (except Dyson).
0 Replies
 
Ragman
 
  1  
Reply Tue 4 Jan, 2011 08:51 am
huh? I'm not sure what you wrote. Can you explain?
Ragman
 
  1  
Reply Tue 4 Jan, 2011 11:27 am
@Ragman,
Wrong thread. Pls disregard.
0 Replies
 
 

 
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