Read the article...it's interesting. I've put my comments in highlight :)
6 Secrets Retailers Don't Want You to Know
By Naomi Mannino | Bankrate.com – Wed, Jul 11, 2012 3:00 AM EDT
If you're like most consumers searching for the lowest prices when shopping, you need to know retailers have some tricks up their sleeve for fighting back against their own rising costs.
It's no secret prices keep rising. According to Consensus Economics, publisher of Consensus Forecasts USA, inflation and overall prices will rise a modest 2 percent in 2012, but income will not rise accordingly. Gas prices are expected to rise, and we can all personally attest to food price hikes. Even the U.S. Postal Service raised its rates in January, and it might do so again soon. Prices for branded goods in high demand such as Levi's jeans and Nike sneakers already rose 5 percent to 15 percent during 2011 and will rise another 5 percent to 10 percent before 2012 is over, according to retail analysts.
Be warned, say consumer experts and retail industry insiders alike, because the best price is not all you have to look out for when trying to get the most for your money.
1. Low prices don't go with high quality
Manufacturers for items from bedding to boots have been sweating price hikes in cotton, leather and other textiles. And, the costs of doing business in China, from sewing to shipping, have increased as well.
"It's a dirty little secret in the retail industry: To avoid retail price increases, retailers and manufacturers 'value-engineer' a product to reduce its cost by purposely taking the quality out of products to make that price point a reality for you, the consumer," says James Dion, president of Dionco, a Chicago-based retail consulting firm. "You will see this with smaller brands and private-label products at discount merchants and off-price retailers where the prices seem to actually get lower."
[Related: Things Your Thrift Store Owner Won't Tell You]
"Prices for popular name-brand footwear (think UGG and Nike) are still increasing 5 percent to 7 percent more this year with the quality and workmanship what you'd expect," says Mike Featherston, president and CEO of ICB International, a footwear development and resourcing company. "Not every manufacturer or retailer has cut corners, but be very careful at evaluating low-cost, no-name merchandise."
It's no secret prices keep rising. According to Consensus Economics, publisher of Consensus Forecasts USA, inflation and overall prices will rise a modest 2 percent in 2012, but income will not rise accordingly. Gas prices are expected to rise, and we can all personally attest to food price hikes. Even the U.S. Postal Service raised its rates in January, and it might do so again soon. Prices for branded goods in high demand such as Levi's jeans and Nike sneakers already rose 5 percent to 15 percent during 2011 and will rise another 5 percent to 10 percent before 2012 is over, according to retail analysts.
Be warned, say consumer experts and retail industry insiders alike, because the best price is not all you have to look out for when trying to get the most for your money.
1. Low prices don't go with high quality
Manufacturers for items from bedding to boots have been sweating price hikes in cotton, leather and other textiles. And, the costs of doing business in China, from sewing to shipping, have increased as well.
"It's a dirty little secret in the retail industry: To avoid retail price increases, retailers and manufacturers 'value-engineer' a product to reduce its cost by purposely taking the quality out of products to make that price point a reality for you, the consumer," says James Dion, president of Dionco, a Chicago-based retail consulting firm. "You will see this with smaller brands and private-label products at discount merchants and off-price retailers where the prices seem to actually get lower."
[Related: Things Your Thrift Store Owner Won't Tell You]
"Prices for popular name-brand footwear (think UGG and Nike) are still increasing 5 percent to 7 percent more this year with the quality and workmanship what you'd expect," says Mike Featherston, president and CEO of ICB International, a footwear development and resourcing company. "Not every manufacturer or retailer has cut corners, but be very careful at evaluating low-cost, no-name merchandise."
I agree with this to some extent. I have noticed that items you buy from Wal-Mart or K-Mart or sometimes even Target, just don't last the test of time. I have also noticed how certain things I've bought from TJMaxx have rusted over time (such as my super cute red colander). Now, I do think some of these stores are just CHEAP! But in general discount stores such as Marshalls, TJMaxx and even ROSS are where I find some of my best deals. Some people won't even step foot into these stores, but you know what, you're loss, my gain. I have found some of the most beautiful things at these stores (even ROSS) that would shock some people.
I think one of the problems today is that retailers just make cheap products and sell them at low costs, just to force you to have to buy it again the following year. But, I don't agree with the fact that all expensive things are high quality. Perfect example is walking through Nordstrom and looking at their clothing. I can get the same quality and material at another store for much less that will last the same amount of time (a week!). I have a few items of clothing that I paid a lot for and they tore and shrunk after wearing them once. This has nothing to do with the price I paid for it or where I bought it, but more so to do with the fact that retailers are able to get away with using cheaper fabric (such as this horrible trend where almost EVERYTHING is made of stretchy jersey material).
Handbags are another story. I do agree that if you want a good sturdy handbag, you need to fork over the money. My only problem with this is that I get tired of my purses. And so, paying $500 for a Gucci that I will probably have forever just doesn't suit me. But, I am starting to think about forking over some good mulla for a good black tote bag. I'm considering it.
Consumers often set a price in their mind to pay for an item, says James Dion, president of Dionco, a Chicago-based retail consulting firm.
"If your eye is on the lowest price when shopping for footwear, apparel or household goods, you can make serious spending mistakes this year," Dion says. "You will overlook smaller packages, (fewer) items in a set and inferior goods that simply won't last or wear as well."
It's a trend that can be tracked, according to Britt Beemer, who found similar results in his 2011 Consumer Track Back-To-School Shopping Survey.
"We found that a troubling 56 percent of people don't notice how an item is made and base their decision solely on price," Beemer says.
"It's very dangerous to be set on a price alone when shopping. Items of high quality may cost more than you dreamed, but you have to remember that one great, high-quality item replaces many mediocre items," says Vicky Oliver, author of "The Millionaire's Handbook."
Well, can't help it when you're living on a budget. What are people to do???
3. Outlet stores are no bargain
You might think outlet stores and off-price shopping is the way to get the better goods for a cheaper price. "But manufacturers and retailers have figured out it's actually cheaper to just make lower-quality merchandise specifically for these stores (think outlet malls, Marshall's and Ross), and that's 90 percent of what you'll find there," says Vicky Oliver, author of "The Millionaire's Handbook."
"That Coach handbag at the outlet is not the same one sold in a department store," Oliver says. "It's a completely different caliber of an item. Its full-price cousin is sturdier, has superior stitching and softer leather. The outlet merchandise is less costly, but lower in quality, too. And if it is the real thing, the only reason it's there is because people with money didn't like it enough to buy it."
[Related: 10 Ways to Get Yard Sale Deals]
Oliver suggests spending time in the upscale department stores to train your eye and hand in the look and feel of the higher-quality designer items. "Try them on, and notice the drape and superior fit. Examine seams, pockets and buttons in the light so you can recognize high-quality versus low-quality when you are shopping on a budget," she says.
3. Outlet stores are no bargain
You might think outlet stores and off-price shopping is the way to get the better goods for a cheaper price. "But manufacturers and retailers have figured out it's actually cheaper to just make lower-quality merchandise specifically for these stores (think outlet malls, Marshall's and Ross), and that's 90 percent of what you'll find there," says Vicky Oliver, author of "The Millionaire's Handbook."
"That Coach handbag at the outlet is not the same one sold in a department store," Oliver says. "It's a completely different caliber of an item. Its full-price cousin is sturdier, has superior stitching and softer leather. The outlet merchandise is less costly, but lower in quality, too. And if it is the real thing, the only reason it's there is because people with money didn't like it enough to buy it."
[Related: 10 Ways to Get Yard Sale Deals]
Oliver suggests spending time in the upscale department stores to train your eye and hand in the look and feel of the higher-quality designer items. "Try them on, and notice the drape and superior fit. Examine seams, pockets and buttons in the light so you can recognize high-quality versus low-quality when you are shopping on a budget," she says.
I have mixed feelings about this. I have bought some great items at outlet stores that have lasted longer than things I bought elsewhere. But the fact comes down to this: it is no longer about name brands. You can have clothes or handbags, or really anything from anywhere that just doesn't last. Quality and craftsmanship no longer exists. If they can make it look good for much less...that's what they will do. They don't care if it doesn't hold up in the wash, or whether they pre-shrink the material before they use it. I can't tell you how many times I've washed something in cold water and it has shrunk. There is no excuse for this. People should be able to buy nice things that last, period.
"That Coach handbag at the outlet is not the same one sold in a department store," Oliver says. "It's a completely different caliber of an item. Its full-price cousin is sturdier, has superior stitching and softer leather. The outlet merchandise is less costly, but lower in quality, too. And if it is the real thing, the only reason it's there is because people with money didn't like it enough to buy it."
Wow...the arrogance of some people. Now, I've heard this before about the Coach handbags, and I really don't know if it's true or not. I have seen NO difference between the ones in the store and those at the outlet. But I do know, some outlet bags are made specifically for outlet stores and are stamped inside accordingly. But you know what, WHO CARES! It's a bag! And, even if it wasn't made for the outlet store and it's there because, "...people with money didn't like it enough to buy it." then WOOHOO for you, you get a great bag that YOU LIKE, with a great price. Why does our style have to be dictated by those with money anyways.
4. All bedding and bath items are not the same
"Consumers think any towel or sheet is as good as any other, and that's a costly mistake," explains James Dion, president of Dionco, a Chicago-based retail consulting firm. Two bedding and bath suppliers, who preferred to remain anonymous, gave the following advice for examining bedding and bath merchandise.
Towels: The standard bath sheet size is 35 by 60 inches, but bath sheets in stores today may be sized 30 by 54 and cost the same or less than their larger counterparts. Compare towels by size and feel first, then on price for comparable items.
Bedding: Pure-spun microfiber polyester is the cost-cutting bedding textile retailers from Wal-Mart to Bed Bath & Beyond turned to in 2011. A recent price check found that pure cotton 250 to 300 thread-count sheets cost double the same size microfiber. The thinner microfiber splits easily and does not breathe like cotton. Pure cotton thread counts now range from 100 to 1,000, with the lowest feeling like burlap. The main difference between the 600-count and 1,000-count is the exorbitant price. If the label doesn't specify, it is likely a cotton-polyester blend. And bedding sets may contain fewer items than you remember.
I TOTALLY agree with this. Pay the money for good towels and good sheets and they will last you a lifetime. If that means you're going to fork over $200 bucks for some nice sheets and towels, you're going to have them forever. I got my sheets and towels from bed bath and beyond (wedding gifts) and they were NOT cheap. They are amazing and after 4 years, they're going strong. However, the sheets that I bought from TJMaxx because I loved the color and were reasonable (400 count)...not so great! If you want something that lasts in this category, pay the money and get good quality. Don't be fooled by the price or brand name. Read the labels!
5. The latest trends will cost you more
"If you examine hot new trends such as colored skinny jeans, faux leather outerwear, handbags and apparel ... with zippers instead of buttons or laces or less fabric, you will see that these are all ways a manufacturer can cut costs," says Andrea Woroch, savings expert for Kinoli Inc., creator of CouponSherpa.com. "These small changes per item really add up to a lot of cost savings for the retailers. Plus, they are promoted to you as the hot, new thing and priced higher to boot."
Apparel suppliers say it's cheaper to dye a pair of jeans one solid color than it is to acid wash or treat denim many times to achieve a desired denim wash, and they use less fabric in a thinner grade of cotton to manufacture skinny jeans and most "jeggings," or leggings that resemble skin-tight jeans. Zippers are faster and cheaper to sew in than buttons and lace, and they can take the place of more expensive fabric or leather, too.
"Most low-priced, low-quality nonbranded or private-label clothing today will simply fall apart faster than its branded counterparts," says James Dion, president of Dionco, a Chicago-based retail consulting firm.
5. The latest trends will cost you more
"If you examine hot new trends such as colored skinny jeans, faux leather outerwear, handbags and apparel ... with zippers instead of buttons or laces or less fabric, you will see that these are all ways a manufacturer can cut costs," says Andrea Woroch, savings expert for Kinoli Inc., creator of CouponSherpa.com. "These small changes per item really add up to a lot of cost savings for the retailers. Plus, they are promoted to you as the hot, new thing and priced higher to boot."
Apparel suppliers say it's cheaper to dye a pair of jeans one solid color than it is to acid wash or treat denim many times to achieve a desired denim wash, and they use less fabric in a thinner grade of cotton to manufacture skinny jeans and most "jeggings," or leggings that resemble skin-tight jeans. Zippers are faster and cheaper to sew in than buttons and lace, and they can take the place of more expensive fabric or leather, too.
"Most low-priced, low-quality nonbranded or private-label clothing today will simply fall apart faster than its branded counterparts," says James Dion, president of Dionco, a Chicago-based retail consulting firm.
My mom has always told me to buy clothing that has a classic look. Something that doesn't mold into the trends of the season. That way, not only do you save money, but you don't have to keep changing your wardrobe to fit the changing styles of the year. Also, I've noticed in the last year, that more and more clothing are see-through. Don't tell me this is the new sexy trend. This is how they've fooled people. Have everything visible...cause it's the style. No, I'm sorry, you're style is dictated by retailers cheapness. It is so hard to find a nice dress, anywhere that doesn't require you to wear a slip or even a shirt underneath it. Dresses, tunics, skirts are supposed to have an inner lining. You're bra is NOT supposed to be visible. What happened to have some dignity and class? This is not just a hijabi issue...I know non-hijabi's that have a problem with this. It comes down to them spending less time and money to make an item (hence less fabric) and therefore, forcing people to accept it, without question.
6. Beware of 'designer exclusives'
So what about brands such as Simply Vera, the Vera Wang brand sold only at Kohl's, or Jason Wu for Target? If you think it's the same designer merchandise sold at Bloomingdale's for four times more, then you need a reality check. "You're buying into the brand name, but you need to understand it's not the same," says Vicky Oliver, author of "The Millionaire's Handbook." "These designer 'exclusives,' as stores call them, are nothing more than cheaply made merchandise using that designer's name.
"They don't feel, look or fit the same as the real thing," she says. "Unless you have disposable income to spend on this stuff, you'd do better to save up your money and invest in just one classic, beautifully fitting piece of the real thing. Even the high-end department stores have sales and coupons, so get on the email lists and befriend the sales associate to find out (about) sales -- and spend your money then."
Don't settle for less in your shopping bag: Read labels and open loose products to check sizes. Evaluate fabric, fit and workmanship carefully to make sure you're getting the best your budget allows.
I'm disappointed to know this, but not surprised. My dad has always told me, if you are going to spend the money, get the best. Now, he may not agree that this extends to clothing and handbags :D but it definitely can. Now, this doesn't mean I'm going to pay $1000 bucks and get that Bottega Vendetta bag I really want or $300 bucks and get that beautiful dress from Nordstrom. No, not in my budget and I'm saving up money for other things. But, all things in moderation!
This article sends the wrong message to people. I haven't read Vicky Oliver's book, but maybe this is something I should pick up and read. Just be smart about what you're buying. If you can spend a bit more to get something that lasts longer, then by all means do, but make sure you use it more than once. Don't be fooled by the high price tag and fancy brand name too, they aren't always going to be better than the bargain deal.
I totally agree with everything you said - what a smartee!
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