By Karl Dakin
Sullivan Chair in Free Enterprise
Regis University
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Everyone has seen the advertisements where a vendor has offered a customer something for free, or a product or service that is offered at a price clearly below market, or selling a combination of products that represents a discount on both products. Visitors to the Horseshoe Market, which will be held this Saturday, July 13th in northwest Denver, will likely see examples of all these sales techniques as the 100+ vendors will demonstrate their ability to compel a purchase. The Horseshoe Market is an outdoor fair of artisans and sellers of selected used products with a cast of supporting food vendors. It represents a place to find that special or hard to find gift.
A premium is a product or service that is given away. The offer is intended to gain the attention of a potential customer because it is ‘free’. Having gained this attention, the vendor seeks to interest the customer in its products which are being sold at full price. The old saying that ‘There’s no such thing as a free lunch’ is true for this selling technique. The vendor must pay for the premium and if it gives premium products away without gaining a true sale, then the vendor loses money.
Selection of a product to act as a premium is its own art form. The cost to the vendor must be less than the profit margin that the vendor will earn on a ‘true sale’. In addition, the free product must be something desired by the prospective customer of the products sold at full price. There are all kinds of premium gifts that a customer might ordinarily buy and to which they will assign a value.
A common practice in giving away premiums is to put the name and contact information on the premium product to serve as a continuing advertisement to both the customer and anyone they show it to.
Premium products can be any product or they can be purchased from vendors who serve this market with an ability to print, silk screen or stitch onto the product.
The Horseshoe Market practices a particular form of the premium sale in that it gives away a ‘Swag Bag’ which contains premiums from many of the vendors. This special offer will go to the first 50 visitors who enter the Market when it opens at 9 am.
A doorbuster product is a product that is sold at a discount from its standard price. Typically, this pricing discount is so low that it can be recognized by the customer as a ‘great deal’. As with a premium product, the vendor is seeking to sell the customer one or more products at a higher price. And, as with the premium product, the vendor is looking at the combined price of the doorbuster and that other sale to generate a profit. Another similarity is that for a doorbuster to generate the desired attention, it must be a product that is highly desired.
An event ‘special’ is more of an ordinary type of sale where a product is offered at a price that is discounted from a standard sales price. A discount on product pricing can be used to clear slow moving inventory, but more commonly it is to get that first sale with a new customer and generate that first relationship with the customer to be built upon over time.
The Horseshoe Market will be held this Saturday at 46th and Tennyson and will run from 9 am to 4 pm. The large variety of vendors will result in a wide variety of ‘sales’ offers that will be too good to pass by.
Horseshoe Market
Olinger Moore Chapel
4345 W. 46th Avenue
Denver, Colorado
