NAVY EXCHANGE NOTES '
Boy, are these prices high...lean buy this
stuff cheaper in the states! How Come
things are so much cheaper in Guam than
here?
Sound familiar? How often have you heard
the above and similar remarks either here
or at another Exchange? Quite Often, I'm
sure.
The unhappy truth is, the majority of the
people that make these complaints are not
trying to start unhealthy rumors nor un
dermine the Exchange system. They simply
believe that what they are saying is the
truth. This situation results mostlythr
ough outright misunderstanding and half
xruxns. ior tne oenerit or all persons concerned, (including the exchange person
nel) we'd like to outline the why's and wherefores of the Exchange system pricing
policies. We don't have the space nor time to give all the minute details' sows*11
just hit the important high points.
/flAKKJJr this is the phrase that seems to be the root of most of the misunder
standing* Here’s what it says in the "Bible" (Navy Exchange manual) "Retail pri
ces are established in a manner to accomplish the mission of the Exchange. Nor
mally, essentia 1 items will be priced to generate the lowest gross profit, and
less essential items will be prices to generate higher gross profit resulting in ,
an adequate total Retail Departments contibutions to Exchange profits". Authority
for establishment of selling prices on retail items is vested in the Navy Ship's
Store Office* This particular Exchange on Adak has nothing to say about the per- f
centage of mark-up that will be applied. The Navy Ship's Store Office publishes
a Retail Mark-up Guide that we cannot deviate from.
.1...CAN GET IT. CHEAPER IN THh STATESs Normally, this is not true. In spite of high
transportation costs and remoteness of our location, we still areable to sell the
vast majority of items at a considerable savings over stateside retail stores.
Occasionally, a situation will arise where an item is available at a particular
in the states at a price lower than we can sell it for. One must realize that in
.,-the -states where competition is keen between retail outlets, it is a common prac
tice to sell a particular item near or below cost, as a "pulling power" to get
customers into the store. Navy Exchange policies do not allow us to indulge in
"loss leader" sales. In many circles, it is not even considered ethical business
practices
HOW CQMb iHINoS ARE S.Q MUCH CHEAPER IN GUAM? This is another area where there
seems to be great misunderstanding. Navy Exchange, Adak, is NOT an overseas Ex
change* Therefore, we must pay the same taxes as an exchange located in, say,
San Diego* Although some manufacturers sell items to overseas exchanges at a
lower cost price than they will a stateside exchange, most of the big savings *
result from not having to pay the various taxes that apply to stateside exchanges#
_(Continued on page ). . .. "