The other day I was in BJ's Warehouse with my wife stocking up on groceries. If you aren't familiar with BJ's it is similar to any warehouse club you might familiar with such as Costco or Sam's Club. It's big in New England where I live.
There was a person demonstrating pillows with Bamboo branding on them. They were super comfortable. He asked if we were familiar with their competitor Tempur-Pedic. Of course we were. I told him that I use a viscoelastic pillow today... that's the generic name for the "memory foam" that Tempur-Pedic is best known for.
It was explained to me that Bamboo pillows are that material, just ripped up into smaller pieces. To be honest, I tuned out much of what he was saying, because I wasn't in the market for a new pillow. My wife tried it out, but she's a traditional down girl. I knew he wasn't likely to make a sale, but I asked him how much the pillows were anyway. It seemed like a natural question, because the price wasn't listed anywhere.
He pulled out a piece of cardboard that showed the deal. He was offering three pillows and a travel case for $85... a savings of $212 (I'm using my memory, but 98% sure of that). Well that does seem like a good deal, doesn't it? Any Sunday I can save $212, I'm all over it, right? It was his last day at the location and he wouldn't be back for months, so this was a limited-time deal.
Do you think I bought the pillows? Regular readers are laughing at that question. Of course not! I went along with our shopping plan as usual.
It wasn't until later that night, I thought, "I wonder what Amazon is selling those pillows for." So I looked it up. And that's when the story got interesting. Check them out: Original Bamboo Pillow with Adaptive Memory Foam
As I write this article (days after I first looked it up), Bamboo Pillows are still $20 a pillow. That's even cheaper than the BJ's Warehouse price, presuming that I don't put a $25 value on the carrying case. What's most striking about the price on Amazon is that the $20 sale price represents a savings of 88% over the crossed out price of $170.
As I mentioned before, I'm all for saving money, but when it is this extreme, I have the opposite reaction. I think to myself, what is going on here? Is the $20 price really a deal or was the $170 price a rip-off? Usually, I side with more of the later, especially when I can find it cheap it at multiple retailers. The "limited-time" deal from the BJ's Warehouse presenter may have been sincere, but I viewed it as an additional red flag on the pricing.
At the end of the day, the pillow gets decent reviews on Amazon, presumably for some price in the $20-170 range. The recent reviews are good, which I think are more likely to be in the $20-range. I know I wouldn't pay $100 or more for the pillow, but at $20 it rivals the pricing of the off-brand viscoelastic pillow that I have.
If I had to give advice to retailers out there, I'd say, pick a market and stick with it. If you are selling a premium priced product and you think you've got the goods to justify it, don't put it on fire sale. If you have a product that you can make decent profit at a $20 price-point, you probably don't have a premium product that justifies the extreme pricing in the first place.
Those kind of margins are just not seen in too many markets. You can bet that someone else will create a similar product with slightly less margins to make the money themselves.
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