So I was driving to work this morning and went past a particularly nice (but way out of my price range) furniture store that had big signs in its windows advertising a ‘relocation sale’
I don’t really understand the concept of a relocation sale, and was hoping someone could enlighten me.
The way I see it, they are going to have the moving vans in to move the stuff they don’t sell (as well as all their work stuff - point of sale machines, that sort of thing).
Instead of selling a couch for $5,000, they are selling it for $2,500 in the relocation sale. Surely the expense of moving their floor stock is not so horrendous as to justify losing $2,500 on that sale?
OK, I realise I’m talking retail prices, not the actually cost of the product (which might be $500 for all I know, so they are still making $2,000 on the sale), but I still don’t get the sale concept.
There is a HUGE markup on furniture. I’ve heard 100%, and that may be somewhat inaccurate, but there is still a lot. Also, there is always a risk, no matter how careful the movers are, that furniture will be damaged in transit. There is most likely insurance, but I don’t know the details of that. It’s also, of course, a good excuse to get folks into your store to see the quality of your merchandise. A certain number will come in, see a nice item but not like the color of the upholstery or want one in a different size. So there’s a chance to convince that potential customer to come to your new and improved location, or to place a special order.
Would you rather spend $100/couch (made up #s) to move 10 couches to your new store? Or would you prefer to sell the couch at a discount and not have to move it at all?
Even a tiny profit is better than a moving expense. And they can always order more couches from the manufacturer for the new location to sell to their new customers.
