What does DISCOUNT mean to you?

Mano · Post by **Mano** » Wed Sep 19, 2012 6:35 pm

I have been thinking of starting this thread for a while and finally got the chance to do so. Living in the UAE, we are exposed to all kinds of mentallities and cultures. It would be nice to share and learn from whatever eachother has got to say:

What does DISCOUNT really mean to you?

desert_hawk · Post by **desert_hawk** » Wed Sep 19, 2012 6:42 pm

Mano wrote:I have been thinking of starting this thread for a while and finally got the chance to do so. Living in the UAE, we are exposed to all kinds of mentallities and cultures. It would be nice to share and learn from whatever eachother has got to say:

What does DISCOUNT really mean to you?

Hi Mano,
For me, as the dictionary states, special rate or percentage of price drop for a special reason

Mano · Post by **Mano** » Wed Sep 19, 2012 7:01 pm

I will give my honest answers which are based on 2 things:
1- I am part of the Ramy 4x4 team. And Ramy 4x4 is very cautious with discounts
2- I have spent the last 6 years of my life in the UK and over there it is badly seen to ask for a discounts

For me DISCOUNT means the following:
1- Seller is raising his price and then giving you discount from the raised price. At the end of the day, even after discount, he is not selling below his set NET price. He is selling you the item at a value higher than its true value or equal to it after discount.
2- Seller is giving discount on 1 item but is compensating with the sale of another item sold at a higher price. In the automotive industry, people give 200dhs dirhams on parts and raise installation by 200dhs.
3- I cannot trust someone that does not give me his best price from the first time. I will always feel that I can bargain and the more I bargain the more discount I get. But my time is valuable and I do not go to places that are not straight forward with me.
4- My friend will not be happy if he discovers that he has purchased the same item I purchased at a higher price simply because he bargained less.

Would you ever trust Mr. X as your trusted supplier if you cannot get a best price from him from the first time? Would you trust Mr. X if he provides an initial price, and then changes his word by changing the price once, and then changes his word once again by changing the price once again?

At last but not least, if you fill petrol at the station, go to a restaurant, go to the movies,...or any similar-like professionally run Company, do you bargain for your discounts?

I am hoping that this discussion will help us share our "feeling" about bargained discounts and create awareness. Please do not get me wrong, I am not against club discount policy and any other form of transparent, clear and NET discounts.

desert_hawk · Post by **desert_hawk** » Wed Sep 19, 2012 7:27 pm

In UK there are things we don't have with the local retailers
1. Healthy competition
2. No forged goods
3. Fixed price policy (no discount for anyone)
4. Active consumer protections laws and agencies
5. Seasonal or promotional discounts, again, the discount will be fixed
6. The presence of whole sellers, which sell at a discounted eates

Most if not all retailers here do not have fixed prices, and since the price that was offered to me might be higher than my friends, I bargain for better price.

If a retailer want to fix his price, let him write a label with a clear price tag, and put a sign that his prices are fixed.

Moreover, if we are in a group, or a club, and it allows retailers to advertise for their goods, then this will be free marketing which will allow more volume of sales, this group or club should get back special rate.

When I visit your shop, and I say I'm from AD4x4, and the seller tells me he will give me the special "CLUB RATE", I will not bargain anymore, or I feel embarrassed to do so, but if I know afterwards that this "SPECIAL CLUB DISCOUNT" is actually given to anyone under different names, I'll be really disappointed.

Obviously I'm happy with your company policy, I'm just Mentioning your company as a hypothetical example.

Mo

Mano · Post by **Mano** » Wed Sep 19, 2012 7:52 pm

Thank you for your detailed answer. You are right in so many ways. In case I have miss-explained myself, I totally agree that "club discounts", "frequent flyers", and all sort of similar discounts are healthy. And yes, it is important that the retailer serves a club differently when this club offers support as you mentioned.

Thanks again Desert Hawk!

desert_hawk · Post by **desert_hawk** » Wed Sep 19, 2012 8:18 pm

You are welcome, I'm not trying to defend our club discount, your company does that already.
But it's the bulk marketing that leads to bulk sales that all businessmen should look for, I'm in business as well, and I do the same when such deals are available

MalteJK · Post by **MalteJK** » Wed Sep 19, 2012 8:25 pm

Biggest point : missing wholesale in here.

Everybody seems to put the "normal" retail price of the rest of the world + 30% as the normal price and then discounts based on that.
Whereas most of the products are bought in bigger volumes so normally 10-20% below the retail price of the rest of the world as a minimum. I still have trouble understanding, that i.e. US produced goods are sold in here at the retail + 30 % price whereas the same US produced product i.e. in europe (whereas something around 20% tax on it ) is still cheaper ...

In my opinion if there is a oversea transportation to europe or to dubai shouldn*t really matter...
So this is maybe why a lot of people are wondering a lot about prices in here sometimes and of course demand higher discounts - simply because they know the "normal" price in other countries which are not equal to the manufacturing country...
The meaning of discount itself - of course i for myself expect honesty.
If i talk to a dealer i don*t expect him of course to sell me anything below his buying price or better below his variable fixed costs.
Everybody has to live and a business which doesn*t earn money is not a business for long.

But yes - basically competition is low means prices are high - this is a rule of the market. If we want lower prices we need more competition as well as maybe a bigger market in terms of volume ... which might attract more whole sellers...

Anyway if discounts are given it should be transparent and honest.
As you said Marwan, if you think you got that special price - and you get to know that this is the "normal" discounted price and basically everybody who asks gets it like that - you as a customer will be disappointed and lose the faith in the honesty of that shop.
Of course the same goes for telling everybody its the original parts whereas its cheap asian copies.

Serge · Post by **Serge** » Wed Sep 19, 2012 8:35 pm

I'm lazy to reply whole question in full.

But yeah, as one of points stated by Malte.. If its special its special... you (me) as a client, want to be the one, the special one!

So if we talk of AD4x4 specials. It should not just be Club Rate... that any offroad club can get... and as we know there is a lot here in UAE.

Special for limited public... ! Than its cool.

Yet when such specials are there.. i think vendor should verify the member is really a member... and not a member just to get discounts from vendors! As its again unfair to active members...

Sorry i got this for What is DISCOUNT, into particular point with our club

iguana · Post by **iguana** » Wed Sep 19, 2012 11:32 pm

Mano,

I can agree with your statement that a vendor will never sell you anything below his cost + profit. No one is opening his business for charity, and any business should close the year with an amount of net profit to continue being in the market and be able to maintain or improve the company business.

I hate bargining here, but it is part of the culture, some times here you go to big companies asking for a rate of something and I hate the answer of "it's AED 20,000 before discount" and then he give you a streight discount of 15% without even asking for one.

I would trust a loyality program, club discounts and or miles. This means that I am part of a preferred group for this supplier, and I am getting this discount because the vendor is getting bulk purchases from my group and therefore, he is willing to give me a discount to keep me as one of his preferred customers.

One of the main things for me is also service and advices I am getting from my supplier. The culture here again is that I go to the vendor who give me good service ... Look at all the complains in AD4x4 forum from different suppliers, it will be all from bad service not from high prices ... The internet word opened the eyes of everybody of the real cost of everything, we all accept that vendors in UAE will add their shipping and acceptable profit margin, but we never tolerate with service.

MalteJK · Post by **MalteJK** » Thu Sep 20, 2012 2:02 am

iguana wrote:# The internet word opened the eyes of everybody of the real cost of everything, we all accept that vendors in UAE will add their shipping and acceptable profit margin, but we never tolerate with service.

i don*t want to sound greedy or offensive ... but if other companies residing in countries different from the manufacturing country manage to have nearly the same price as in the originating country ...

then there is something seriously wrong in here ... as in that ... i accept and appreciate the efforts of vendors bringing high quality material and tools here - but if i can have the same stuff cheaper if i order it myself + the airfreight ... then i think something is wrong.

I have this discussion already several times - not really about offroad parts, because this is not my profession but my hobby ... but about IT stuff a lot already. If i get the same warranty, the same product cheaper if i pay the freight and buy it from an international vendor - why should i buy locally ? Why should i think that i*ll get a great discount, while the cost even with discount are still above my own personal price for buying it ?
So as i said before - i'm missing someone who's seriously into the whole sale of offroad parts ...

anyone

?

latief · Post by **latief** » Thu Sep 20, 2012 1:05 pm

In addition to what is said above ...
More important than discount is honesty and respect..We don't like to be treated as fools. when some vendor attempts to charge me 40% above prices in America, and then swears by his mother's grave that he is giving me a discount which has no quantifiable amount, then the result is that next time i will buy directly from America and he can keep his discount to himself

so more important that discount is honesty, trust and credibility: We have to feel that vendors are not trying to rape us....once i feel that a vendor is professional and trust worthy he/ she has my business.....

SSS · Post by **SSS** » Thu Sep 20, 2012 2:29 pm

fortunately there are some vendors which are ok

starting this thread shows me a new quality of customer service and relationship management!

LIKE

desert_hawk · Post by **desert_hawk** » Thu Sep 20, 2012 2:41 pm

SSS wrote:fortunately there are some vendors which are ok

starting this thread shows me a new quality of customer service and relationship management!

LIKE

agree

gilbertk · Post by **gilbertk** » Thu Sep 20, 2012 9:20 pm

Arguements about shipping costs being so high are pretty much nonsense, think of some where like Cooper Peedy or Alice Springs both right in the middle of Australia, now they have no easily accessable coast line, your talking of thousands of miles from the nearest bit of sea, everything will have to be trucked across the country or maybe even flown.

Im pretty sure they are not charging +30% extra on goods for sale there.

Also look at most international shipping routes of the big container ships, most going to Europe from Asia will stop in Dubai.

Plus I doubt very much that there are any import duties on most of these goods either, so compared to the UK where you have 20% VAT there will also be import duty.

Serge · Post by **Serge** » Fri Sep 21, 2012 12:54 am

Guys,

you do pay tax to get items from Free zone - that is 5-7% from the invoice value + documentation fees.

The shipping is not so cheap to here. Sea freight is cheaper, but it takes lot of time, and you have to get a huge shipment to benefit from this.

So if you do, you have to deliver it ans store it somewhere, so warehouse rent + delivery to warehouse + further delivery to the retail place... Etc. Thats where %'s come from

I think that item available Ex-Stock already coasts more than item you have to wait for - 1-2 weeks delivery.

So the thoughts about 30% etc. are not so real. its a very simple economics. Any business is made to earn money, and we can pay for products + service! Yes, that thing, service, we have to pay for it. Well we can have conversation with US... a long e-mail story (as we wake up while they sleep).. i still like face to face conversation more than any e-mail ping-pong.

Now, simple one, lift kit worth USD 1000, + 30% = so that extra 300 USD, out of it, aprox 70-100 USD spent to get it delivered into retal shop, so we got around 200 USD more, now, rents, salaries, telephones, electricity etc. How can a business grow with other policy?

A company can offer wide range of products, with profit rate of 10-15%, and another narrow range, for what they got better terms, being distributors. So we talk of bigger orders, wholesale (as Malte told), Sea freight, so the initial landed cost of product is less. Now the trader can play with the price. Get it almost same as overseas, do offers, considering market, currency rate, landed coast of next shipment etc.

So if you just get a little more deep into this, we cant blame vendors here in UAE. Thats the way its done here.

So what can a vendor do? ... SERVICE, TRANSPARENCY, RESPECT OF CLIENT, INFORMATION, KNOWLEDGE.

And if we have this, why not let the vendor earn few % of their profit?

Now, discounts. A vendor can offer such to some group - lets say AD4x4. They offer us special price, in a trade to extra overturn. So vendor sells more products with lower profit rate, but actually ears the same, as he sells same products cheaper but faster. The most important is time... the longer yo got your stock - stocked, the longer your money is stuck in this stock.

And i do prefer paying a little more, to company that treats me for what i pay them. And when such company offers specials to a limited public, and you are one of them, you feel being that special ..

Its like Emirates Airlines, who can upgrade your ticket to business class if they got no more economy and you are one of their perm client.

Yeah, and i hate this thing -

-how much is balancing 4 wheels 17"?
-200, but for you sir special price 180 (yeah i see the guy for the first time in me life)
-mate, 2 weeks back it was 150
-no sir, normal price 250, but for you 200 and special discount i make - 180!

Do you think i did the job with them?