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  • Category: Miscellaneous
    Points:5

    Why should the sellers jack up the MRPs of their items?

    Nowadays in the market various household and other products are available in plenty and different manufacturers are offering their products to the customers. The cost of these items varies from brand to brand.
    In some cases I have observed that the price is kept high but while selling it, a good discount is given to attract the customer. Sometimes the discount is so high that we start doubting the authenticity of the product. All these things create a big confusion in the minds of the customers and affect their decision making power for buying an item.
    In my view the seller should not be allowed to increase MRP just like that. Alternatively the discount should be limited. Even if the seller sells at a high discount then Govt should levy GST on the declared MRP or after a reasonable discount in that say 5-6%. if it is done then seller would not jack up the MRP just like that.
    What are your views on that? Do you also feel perplexed with these high MRPs? Please share your views.
  • #780205

    Points:5
    Maximum Retail Price ( MRP) is the maximum price that can be sold for that particular item. They can give a discount but they can't increase it. I think huge discounts will not be offered on branded and quality products. All companies will have old stocks with them and should be cleared. Otherwise, those items will become waste. So these companies try to clear these stocks by offering big discounts. They may even be ready to pay GST on declared value as there will be some realisation.
    These days all limited companies should get the cost audit done. In that audit, the auditors will see the value addition and the correctness of the pricing also. In earlier days only Chartered accountants were conducting financial audits. But recently costing audit has also started. As far as my knowledge goes there are some guidelines available for fixing the rate of the product.
    drrao
    always confident

  • #780215

    Points:3
    It is human nature to get free offers and discounts. The sellers. marketers know this well.
    So they cleverly pay a psychological trick. They hike up the MRP and then give discounts. The buyer feels very happy in getting a discount. Not all people are aware or even bothered to know the truth.
    The immediate sequential impact of this is that after a small period, the same item will be sold on the old MRP justifying that the offer period expired.

  • #780227

    Points:4
    While shopping in a supermarket I have also observed this thing that MRP of various items appear inflated and then there is a board on the side which says that so much discount is available for it or there will be offers like buy 1 take 1 free or buy 2 take 3 free.
    The sellers have a tendency of keeping MRP on high side and when sales are not good they will start offering discounts and freebies like that. Many gullible buyers buy these discounted items blindly without considering their consumption patterns for these items and companies and outlets mint money.
    A consumer should be aware of these business tactics and should not fall in the trap of these discounts unnecessarily until and unless the said item is really required by him for consumption.
    Thoughts exchanged is knowledge gained.

  • #780236

    Points:4
    Let me elaborate on one of the points that I tried to bring in this post that is levying GST on the declared MRP or on the selling price after a maximum fixed discount of say 10% on MRP.
    If that is done then seller will not be able to jack up the MRP unrealistically. The seller will not be able to give high discount also because he will have to pay GST on a higher amount restricted by the maximum discount allowed.
    Can such a change in rule help to solve the problem of jacking up MRPs fictitiously? What do the members think?
    Knowledge is power.

  • #780239

    Points:4
    The traders take every step to dispose of their stocks with heavy discounts just before the expiry of the products. That is the easiest way to manage their inventory saving both space and inventory cost of the products occupying an unnecessary place in their stores.
    The psychology of the customers is known to the sellers. An offering of heavy discount goes in favour of the customers. They cannot evaluate the efficacy of the sold items. However, the heavy discount price offered to them would further attract them to have such products for future storage. It is altogether a different issue who wins the game ultimately by way of such transactions.

  • #780258

    Points:5
    Many retailers are selling the products only on MRP by hiding the margin availed by them from the wholesaler or suppliers.
    Many of us do not see the MRP practically as we are buying in super markets, big shops that too paying in credit/debit card so we do not mind the price or MRP.
    This, as pointed out by the author, I noticed casually one day. I bought a sandal soap in a grocery shop, the owner of the shop was there he asked me to pay 75 rupees. On the next month I went to the same shop (not by any intention) I bought a sandal soap and as the shop boy was there without owner, he asked me to pay by seeing MRP as 85 rupees. I told him that I have paid only 75 in the last month he strongly refused to give for 75 and I just paid 85 and returned home. I casually told this to my wife. She suddenly went inside and brought the soap cover of last month purchase as she kept the cover along with almirah cloths for smell. I saw in that also 85 rupees MRP. Then only I realized the MRP is the rate with which the retailers are gaining.

  • #780260

      

    Points:5
    The question is how to know whether the MRP of the product has been hiked. We get to know the MRP of any product by looking at the label where it is mentioned and in various supermarkets, and e-commerce companies such products are sold at discounted rates. In this competitive market, sellers use multiple tricks to get maximum sales and as Dr Rao has mentioned heavy discounts are generally not available for branded and quality products.

    While the seller cannot ask a customer to pay more than the MRP, if the customer has any doubt she/he must verify and compare prices of similar products from other shops before making the final purchase. Unfortunately, in most cases, we become emotional by looking at the rate of discounts and purchase things without batting an eyelid. A few years ago I heard that one seller in our area was heavily fined for pasting a sticker on the MRP label indicating a price quite higher than the original MRP. In such cases, one has the option to go to the consumer forum for redressal.
    Sankalan

    "Life is easier when you enjoy what you do"

  • #780426

    Points:5
    Sankalan #780260 has raised a valid question as how to make out whether the MRP is hiked by the seller/manufacturer. In my view and experience in this matter there is a tendency of increasing MRP by many manufacturers and there are many items where MRP is already on higher side. This gets confirmed when many items nearing their expiry dates are sold at heavy discounts in supermarkets.
    This increase of MRP is more in high end luxury items because the buyers for these items are from the rich segment of the society.
    Another observation is that in supermarkets they rotate items in such a way that everyday there would be discount on some particular item to attract more customer to it and next day some other items would be selling there with discounts. All this would be possible only when MRP is already jacked up by them.
    Knowledge is power.


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