Price Points

One of the phrases that has stuck in my mind over the last year came from Marten Ross, a deputy governor at the Estonian central bank. Speaking in Riga a few months ago he said something like: “A crisis can be like a fever – it may be unpleasant while it lasts but it can do you good in the long run.” (My paraphrase).

While on one level such statements are crass – it’s difficult to point out to a teacher who just got the sack how positive education reform is – there is some truth in it.

One of the most obvious “crisis positives” has been a long overdue increase in competition between businesses. While there is still plenty of cartel-like behaviour in the Baltic markets, largely as a result of their small size rather than some antitrust masterplan, things have improved, as I’ve pointed out previously in blogs about cafes and car washes.

As well as keener pricing in general, Baltic retailers also seem to have finally understood the concept of the sale or stock clearance.

One of the greatest improvements has been the ability to haggle on prices of more expensive items. I enjoy a good haggle – it strikes me as a civilised form of interaction, a sort of mercantile chess in which both parties acknowledge the importance of the other and engage a range of tactics and stratagems in order to achieve their aims.

Haggling also adds a sense of occasion and sometimes even drama. One can walk away from a transaction happy to have got a decent discount and one can even walk away knowing you’ve paid well over the odds but full of admiration for the salesperson who
managed to stitch you up so comprehensively.

In the last two days I’ve had two contrasting experiences that seem to show that while price negotiation is certainly possible these days – a few years ago any attempt at haggling was met with stony contempt – it is still somewhat quirky.

Having moved to a new flat, I’ve needed to buy a few pieces of furniture, white goods and the like. In the process I’ve made the surprising discovery that it’s usually cheaper to buy antique furniture than characterless new stuff from the retail chains. Why this is will probably make a blog entry of its own some day soon, but I think it is not unrelated to the burning question: “How come IKEA has never opened a store in the Baltics?”

Anyway, my Lovejoy-like predilection for knackered old chests and the like has had various pleasant side effects. I’ve got to know the owners of a few antique shops and a very interesting bunch they are, though I’m not naming any names because I don’t want anyone else to bag that nice writing desk and cabinet I have my eyes on.

These dealers take a genuine interest in you as a customer, are open to a good haggle and even give you a phone call about any new arrivals that might be of interest. But you really know you’re hitting it off when they invite you into the back room (every dealer has a back room) to look at the stuff they keep there. They say it’s the stuff that’s wonderful but that there is no demand for – grandiose cabinets de toilette, onyx-inlaid chaises longue and the like – but I suspect it’s really the stuff they don’t want to part with.

Returning to the topic in hand, yesterday I went to buy a TV. I’m not one of these techno-fetishists who must have a home cinema in every room. In fact I don’t even like TV much and once got so fed up with the endless stream of crap being served up on British TV that I waited until the end of the final broadcast of terrestrial test cricket and then threw my television out of the window on the grounds that there would never be anything worth watching ever again.

But as a journalist I grudgingly accept that I have to watch the news every now and again, so I went to look for a telly.

As a confirmed tightwad I spent hours tramping around looking at various deals on various vulgar vidscreens before deciding to do the dirty deed and buy one of the godforsaken contraptions.

I also needed a telephone (sadly another journalistic necessity. It has been downhill ever since we shot the carrier pigeons) and tried to use this double-purchase as a bargaining tool.

So after a bit of chit-chat with the salesman I pointed to the TV I wanted on the display shelf.

“I’ll buy one of those,” I said.

He reached for the cardboard box on the next shelf down. My heart sank because I have been through the subsequent rigmarole a hundred times. Every time you buy a computer, a printer, a camera, a fridge, a washing machine, exactly the same conversation takes place…

“I want a new one,” I said.

“This is new,” he said.

“No, I want a completely new one in a sealed box. Not one that has been in the shop with people touching it and opening it. This one is not completely new.”

I do not know the Latvian for “shop soiled goods” but I really should learn it if such a phrase even exists.

“It’s the only one left. We won’t be getting any more – do you want it or not?”

At this point the salesman’s manager approached, probably attracted by my bizarre speech pattern.

“Can I help?” he asked.

“Probably. I like this TV but I want a new one. If I buy this one, I think the price should be reduced. And I also want to buy a telephone.”

This is where the script diverged from the norm. Instead of saying “Take it or leave it” which always results in me turning on my heel and marching out, the sales manager played it smart, showed me a nice telephone and  listened to my proposals which were along the lines of “If I buy this more expensive one of the two telephones, you’ll knock a bit off the TV?”

Miraculously we did a deal we both thought we’d done well. He sold two fairly expensive items albeit with a bit of a discount (instead of none at all) and I walked out feeling like I hadn’t been played for a sucker and would probably go back to that shop next time I wanted an electrical item. A new dawn for Latvian retailing?

Not quite. A day later I went to a large furniture store that has both new and used furniture sections. As a drove into its snowbound carpark I noticed signs saying “Sale – 15% – 20% off!”

This was already better than the furniture shop I was in last week which excitedly informed potential customers of savings of up to 7%. Woo-hoo!

So I went into the used section of the store and saw a nice little bedside cabinet with a pricetag of 25 lats. I picked it up as it wasn’t heavy, walked to the till with it and pulled out my wallet.

“You take cards,” I said more as a statement than a question – after all, standing next to the cash register was a large plastic stand displaying the logos of MasterCard, Visa, American Express and all the others.

“We only take credit cards for new items. On the used items it’s cash only.”

“Oh… well that sign is  bit misleading then. I will go to a cashpoint and get 25 lats then come back – could you reserve it for me?”

She reluctantly agreed. “You will come back today, won’t you?”

“Of course. I’ll be about an hour.”

And an hour later I was indeed back with a crisp 20 lat note and an only marginally dog-eared 5 lat companion piece. As I smiled and reached into my pocket, I got a surprise.

“Of course you know the actual price is 30 lats. The items in the second-hand section are being sold on commission, so you need to add 20 percent to the prices. So this 25 lat table costs 30 lats.”

There was a barely perceptible pause while I digested this information. I was being asked to add 20 percent to the ticket price on everything?

My heel made a scrunching sound as it ground into the floor and executed a neat 180 degree turn.


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