questionsdo the people liquidating borders think that we…

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Answers to your questions:

Yes, they do think we are idiots.

And I think you just explained the phenomenon excellently.

This seems to be the way liquidators work - put up a huge yellow sign advertising huge discounts and people turn their brains off and go into pillaging mode without considering that the price they're paying is actually more than what they could have bought the same items for last Tuesday when they weren't on sale.

I think there was a thread about this somewhere recently...

[Edit} And sure enough, @kamikazeken predicted this would happen. http://deals.woot.com/questions/comment/58fec433-6c0c-4d68-8a19-d6da226bf937

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@durkzilla: I managed to space on that thread, but you're right: he totally called it.

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Some people are just cattle. The same thing happened when they liquidated Circuit City. The good deals weren't until the final three weeks but by then the mindless hordes had already scooped almost everything and actually paid more than if they had purchased the items at other stores.

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I won't deny everything that's been correctly pointed out, particularly the herd behavior. But don't blame Borders. It'd be a violation of federal bankruptcy law to liquidate assets for less than fair market value. FMV is whatever the market will bear, which in this case appears it is the minimal discounts they are applying now. They can't liquidate their assets for a bargain because they are nice--all the creditors to whom Borders owes money would get screwed.

So you can expect the discounts to get larger as time goes on--as is always the case at these sales--and Borders tries to recoup FMV for each item left in the stores.

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I like to walk through the aisles of places being liquidated, just to see which items are the most popular. I've even pointed out things where I knew the cost of the item the week before, and that with the "discount" the current price was approximately 25% higher than the price before the liquidation, but usually I see disbelief on the part of the purchaser. I don't bother with telling people any more.

One born every minute doesn't even begin to describe it.

Critical thinking is a skill that has never been well developed, and I think that it can only be taught by example.

So it goes.

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@garybecker: Nonsense. When the contents of a place are liquidated, and managed properly, without involving a "professional liquidator," they are sold at sensible prices, without needing to take advantage of the natural gullibility of the general populace. I point out that the liquidator profits greatly in this behavior, and that the creditors of Borders will not see any more benefit from this sale than if they'd lit a match.

There are (as I'm quite sure you know) different classes of creditors in any case. I'll save the further economics lecture for another time.

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Think about it for a minute. It's July. Borders finishes liquidating sometime in September. It's 20% now, but in late August, it'll be more.

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@shrdlu: I did not see your excellent replies before I posted and then deleted the "understakers" comment wherein I said that I never once in my life felt I had a bargain in hand. In addition, the merchandise they bring in that the original merchant never carried is usually so sub-par as to be ridiculous. I leave the Economics explanations to you.

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@klozitshoper: You are absolutely correct in pointing out that the "liquidator" brings in other items that may never have been at that store, or even carried by them. Part of this may be related to the same reason it's wise to have a lot of small worthless items at a garage sale, and to not put everything out all at once. People don't stop at garage sales if it looks like there isn't much to see, or to buy.

I've used stacks of rags to give the appearance of more items (and then been amazed to sell out of them). Liquidation sales are the same. If the shelves are picked over, and nearly bare, you are less likely to want what's left, even though it may finally be at a sensible price.

I've actually found bargains at liquidation sales, but they weren't what you'd expect. They often sell the fixtures, those last few days, and similar items. Those may be worth what you pay.

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@garybecker: borders isn't doing the liquidation, the liquidation company is buying their stocks and can sell it at whatever price they wish. The bankruptcy court only has approval over the sale TO the liquidation company (as far as I understand)

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** stocks = inventory
sorry, didn't mean to imply that liquidation co is buying actual shares of borders stock.

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The vast majority of consumers do not understand that at the beginning of a liquidation sale, prices of items are marked up to at or above original MSRP before applying a "discount" to prices. People are, most definitely, not receiving a deal in most cases during the first few weeks/months of markdowns.

The same thing happens with Black Friday or day after Thanksgiving sales. For most of the more expensive items, you'll likely see the best deals of the season before the end of October in many cases.

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@theoneill555: Some people are just cattles?

I would say that the huge majority of people are cattles. That's also why Woot exists and does so well! :)

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i read a similar warning on dealnews 5 days ago

http://dealnews.com/features/Why-You-Should-Skip-This-Weekends-Liquidation-Sales-at-Borders/482171.html

which brings me to a good question i can ask the community..

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One thing does make Borders' liquidation different from a place like CompUSA, Circuit City, or Ultimate Electronics. That one thing is that most of the merchandise in Borders is priced before it gets to the shelf (with at least an MSRP). You can look at the MSRP and have some idea of what the item in your hand would normally sell for if it was not discounted at all.

On the other hand, consumer electronics often vary by the week and can be very difficult to keep on top of in terms of prices (although wireless internet access helps that a lot).