How do I check a mattress store’s discounting before buying?
Ask the seller for sales records that show the list price, the price actually charged and the reason for any difference, then compare sale-event months with ordinary months. That shows how much the store depends on discounting and what it does to its gross margin, which is separate from how you would negotiate the purchase.
Ask how often customers negotiate on price and how often the store agrees. Sale events and bundled extras are common too. None of that is wrong, but it matters to a buyer of the business, because the margin on each sale depends on how often the list price is actually paid. This is about the store’s own pricing, not about negotiating its sale.
Ask for list price against price charged
Ask whether the point-of-sale system records both the list price and the final price. If it does, you can see the typical gap by product line and by month. If it does not, ask how the owner tracks discounts. A store with no record of its discounting has a gap in its books that you will want your accountant to look at.
Compare sale events with ordinary months
Ask for the calendar of sale events and the sales for each. Check whether volume rises enough in those weeks to justify the lower margin, or whether customers simply wait for the next event. Ask who decides the discounts, the owner or staff, and whether any supplier funds part of the promotion. That changes who bears the cost.
Free extras and advertised prices
Free delivery, pillows or old-mattress removal are discounts too, and they cost the store real money. Check how they appear in the books. Also read the store’s advertising to see how it describes its prices. Ask your lawyer whether any advertised pricing practice could carry a risk to a new owner. Our negotiation article covers the purchase itself.
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Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Competition Bureau CanadaGovernmentDeceptive marketing practices
- 02Competition Bureau CanadaGovernmentCompetition Bureau sues Canada’s Wonderland for allegedly advertising misleading prices online
- 03Business Development Bank of CanadaGovernmentWhat is inventory
- 04Business Development Bank of CanadaGovernmentWhat is the operating profit margin?
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