Oreo’s… Potato chips… CHOCOLATES…
“Fire sale! Everything must go!!!”
Welp, I’m guilty of this when I walk past Valu$ or ABC Bargain Centre occasionally.
I’ve caught myself wanting to buy things I didn’t need several times, just because it’s that cheap.
It doesn’t help that the Fire Sale signs are all so prominent and in your face.
C’mon, I’m not alone right?
Looks familiar, eh?
Fire Sales, No More?
Don’t worry though, these misleading signs will likely be history soon, as it breaches the Consumer Protection (Fair Trading) Act.
It’s pretty straightforward.
Basically, it’s unfair for businesses to publish that there is a limited-period sale when they know that the products and prices are going to remain past the limited period.
Sounds about right!
Following several complaints on misleading claims like the above, the Competition and Consumer Commission of Singapore (CCCS) will be developing a set of guidelines on price transparency.
CCCS sought to provide a better shopping experience for consumers through these guidelines on pricing practices such as time-limited discounts, free offers and price comparisons.
But all’s good, it seems like only the misleading signs are going away, not the low prices.
What Is A Fire Sale?
Well, when the term fire sale emerged many years ago, there really was a real fire involved. Shop owners were selling goods that were damaged by the fire at heavily discounted prices, to recoup some of their losses.
Nowadays, it’s more of an advertising tactic to draw more consumers to purchase their products, by introducing the timed element to their sales.
But, we’ve seen the signs long enough to know that the shops are not really going to close down anytime soon, don’t FOMO and fall for their trap leh.
How Are The Prices So Cheap?
There are a few ways how budget stores like Valu$ and ABC Bargain Centre can still survive, even though they seem to be selling the products way cheaper than our usual supermarkets.
Economies of Scale
Both Valu$ and ABC Bargain Centre were founded and operated by Radha Exports, so you’re essentially buying from the same company here.
According to Radha Exports, they are currently operating 69 outlets in total, with an 80,000 square foot warehouse.
If you need help picturing 80,000 square feet, that’s bigger than the US White House…
Or approximately 2 floors in Funan Mall…
Now, boys and girls, we all know that things are cheaper when you buy in bulk.
With a lower cost price, they can afford to sell you these items at a lower price and still earn money.
If you’ve compared the same items in the different shops, you might have noticed slight differences in packaging, or that they may be printed in a different language.
Instead of importing items from their original country of origin, suppliers like Radha Exports may import items that are manufactured in a different country, usually at a way cheaper cost.
Now, that can mean different things depending on the products.
In some cases, the recipes may be slightly different; in others, the recipes are the same but the ingredients used are different.
But either way, while you may notice some differences in taste, these goods are still safe for consumption.
Regardless, lower costs to these suppliers mean that they can afford to keep the prices super low.
Grey Market Retailing
Not all products in these budget stores are imported from different countries though!
The grey market effect is more prominent in luxury goods, such as bags and watches, that are sold at a fraction of their actual price.
But it applies to daily items too!
Often, a brand may face a situation where they have too much stock left and their official distributors are unable to sell the products fast enough.
The reasons could be as simple as a change in packaging, or an over-produced seasonal item, or also because the products are nearing their expiry date.
In such cases, these brands may choose to sell their excess products to grey markets at a heavily discounted price.
And you know what that means, lower prices for us too!
Lessons From Fire Sales
Don’t buy things just because it’s discounted or cheaper
Now that the misleading signs are likely to go away, would you find yourself buying things less impulsively?
Imagine that every time you walk past a budget shop once a week, and you bought something you don’t need out of impulse, every single time.
Even if each item only cost you $1, you’d have spent extra $52 over a year.
It may not seem like a lot, but it’s money you didn’t have to spend in the first place.
This doesn’t just apply to products from budget stores, this applies to all sales that you encounter on a daily basis.
Just because something is way cheaper, doesn’t mean that you have to buy it.
Smarter financial decisions
Even though it may seem like a minor issue, the above situation is the perfect training to make smarter financial situations.
If we are conscious enough to ask ourselves if an item is a want or need, even with small purchases like these, it helps to build a habit that will guide our bigger financial decisions in the future.
Save more money
While some of us may still be sceptical about buying consumables from budget stores, other products are perfectly fine for day-to-day use.
It may be difficult to keep track at first, but after a while, you’ll eventually remember which are your go-to stores for the products you purchase regularly.
This way, you might be able to lower your monthly household expenses and allocate more savings to things that matter to you.
Similarly, this applies to any financial products you may be purchasing for yourself and your loved ones, always do your homework to find out which ones suit you best.
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