Hi
Is there a term for a scenario where sellers discriminate between customers in terms of the quality of a product they sell to them (based on the seller’s view of how long he or she can retain them as customers)?
There is such a thing as a seller’s bias. If a product is in short supply and seller may want to maximize his earnings by selling to someone he believes will provide him with more repeat-business.
What is this type of sale called?
I look forward to your feedback
Preferred customer is a term for this.
Thanks TriPolar. Is there a term for the sale of an interior good to someone a vendor thinks might not be a long-term customer?
I am not sure that any seller would pass off inferior goods on the grounds that they think that it may be short term business - surely that would ensure that the relationship was short term. Inferior products are usually sold, labelled as ‘seconds’ or something so that they don’t damage the seller’s reputation.
On the other hand, it is normal business practice to give discounts to regular buyers. As a retail customer, you may come up against this while on holiday. Local shops will often charge the fly-by-night tourist more than the regular local.
Oh yes, it’s done, both that and selective pricing. Usually it involves people that the seller assumes to be “passing birds”, due to speaking a foreign language or to not having seen them before.
In goods with natural variance, this is known as binning and it happens either formally or informally. For example, top sushi restaurants form long term relationships with their suppliers such that the highest quality fish is specially set aside for them. If you’re an ordinary retail customer, you’re going to get the 2nd tier at best.
I’m in a business where I primarily charge for my time.
When I have an client I’d rather not do business with, instead of turning them away I add an “asshole tax” of 25% or so to my estimate. Ideally, they walk away, but if not . . . profit!
I think that’s pretty common. When we had our house re-wired, I got several estimates. I used an internet agency to find tradesmen and one guy quoted over double what the others did. I assumed that he was obliged to quote, but didn’t want the job.
I accept what others are saying about giving second quality goods to second class customers. Like the “asshole tax” above, I doubt that it appears on the invoice.
Maybe another term for this is product versioning.
This is an example of second degree price discrimination. But versioning doesn’t need to depend on the prospect of having a repeat customer, so maybe not what the OP is looking for.
I’m not sure there is a specific term for what the OP is looking for. At first glance I’d say it’s called swindling if the seller is passing off a second grade product as highest quality, and charging the customer likewise. But I guess you weren’t after that term…
Maybe you could be more specific: what sort of product are we talking about? Is it a complicated man made machine like an electric drill or an ipad? Or a natural bulk product like apples or potatoes?