"Good Morning America" did a story last week on how diamonds differ (or don't) depending on the store. The reporter compared purchases from Costco > and Tiffany & Co., and discovered that while the chosen Costco diamond > appraised for $2,000 more than the purchase price, the reverse was true for > the Tiffany diamond. At Tiffany, the reporter overpaid by about $6,000.
In the post-purchase analysis, master gemologist Martin Fuller explained that a customer gets added value from a Tiffany diamond—an upgrade program, for instance. He explained that you're also purchasing a name.
So what's in a name? Plenty. When you're in the powerful position of market leader, often you can justify such a markup. If Costco didn't provide a bargain—or at least a decent value‹no educated consumer would buy a piece of jewelry there again. But Tiffany can jack up a price by thousands and no one will question it. In fact, they expect it.
On a receipt, often there's much more to the bill than just an amount for a product. There are plenty of other charges on there—including where the vendor falls in the market hierarchy. Do you know where you fall? Do you price accordingly?
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