One of the most frustrating things that we come across online is someone selling goods or services and working hard to market them but does not openly display the prices. Instead, one is supposed to write them a message to enquire about the prices.
Typically, their social media profiles have a label stating that that one should "DM for prices."
We could argue that this is tantamount to having a supermarket with goods that are well labeled, but with no prices. You pick something, then go to the cashier to confirm the price. That is ridiculous.
But then, why do so many online merchants (especially on social media) run this model of business?
Why are they not willing to openly display their prices so that people can make a decision quickly?
Wouldn’t it help if the prices were open so that one won’t waste their time inquiring about goods and services which they cannot afford?
It turns out that this is not anything awkward, and it is widely practiced.
The price is never fixed
At the local market where I shop once every week. The prices are not cast on stone. There is room to haggle over prices. The prices could change based on whether you are a ‘regular’ or a ‘visitor.’ The price changes depending on the time of the day. It also changes depending on the car you drive and the shoe you are wearing. Even the weather is a factor.
This is the exact opposite of what one would expect in shopping malls or supermarkets. Prices are fixed, and very transparent.
Many markets operate this model where the prices are negotiable. If you want to buy a shoe, the seller will encourage you to try it out and see if it fits. They will delay announcing the price in the hope that once you like the shoe, and it fits, you are more likely to buy it. Once they mention their price, you go ahead and bargain until both of you agree on a price that is fair to both of you.
"This [DM for price] is tantamount to having a supermarket with goods that are well labeled, but with no prices. You pick something, then go to the cashier to confirm the price. That is ridiculous." - Jacob Mugendi (Tweet this | Share this via WhatsApp)
The model is similar to what happens even with huge purchases like cars. There is an asking price, but the actual price that the buyer pays largely depends on their negotiation skill and many other factors. Even in public transport in Kenya, one needs to ‘discuss the fare with the bus conductor before boarding the vehicle, because it varies depending on many factors.
Risk of turning away the buyer
In such a situation where the price is not fixed, the seller needs to be careful not to quote too low when a buyer is willing to pay a higher price or quote too high until the potential buyer is disinterested in the negotiation.
To guard against this, the seller wants the buyer to test drive the car first, or even fit the shirt. Once they like it, negotiation becomes easier and since the buyer has already invested some time and emotion into the transactions. They are more likely to buy the product.
I find the concept interesting, and it can earn you some great offers. It is not too different from the surge pricing adopted by Uber, or trading in the stock market.
Doing business on social media
When people move their business online, they carry the same principles they used in offline businesses.
Some merchants want you to get in touch with them so that they can let you know about the prices. They know that once you have started a conversation, you are more likely to buy. You are also likely to come back for a second time, and since they have your contact and know your interests, they can share with you more offers. This is the reason why they do not state their prices.
Unfortunately, social media is not a homogenous audience, and hiding the prices ends up irritating some people. Some buyers want to make a decision quickly based on the price, and some want to negotiate a favorable price. It is not possible to please the two groups at the same time.
One, therefore, needs to weigh the risks against the benefits of ‘DM for prices’ business model before adopting one.
But at least, if you want me to send you a message to enquire about the goods that you have posted, I hope that the price is negotiable, otherwise it does not make sense for me as the buyer.
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