Guest waltchan Posted November 17, 2005 Posted November 17, 2005 With all the great deals going on at Black Friday, I wonder if the retailers do lose money if they sell the items so cheap for the people?
rjjan Posted November 17, 2005 Posted November 17, 2005 Yes a lot of money!!!!! It all the other stuff hopefully you buy on black friday that makes money. Toys,wrapping paper lights and the such are good money makers along with clothes.
Christypl Posted November 17, 2005 Posted November 17, 2005 They dont loose to much....retail has a huge markup.
Aaron Posted November 17, 2005 Posted November 17, 2005 I'm sure they lose alot of money, but when you buy other items.. they're still making money.
TamiL Posted November 17, 2005 Posted November 17, 2005 Alot of that stuff has a markup of close to 100%. What little they lose they more than make up for. Retail stores would not have these sales if there was no profit in it.
kfinto65 Posted November 17, 2005 Posted November 17, 2005 I'm sure they lose alot of money, but when you buy other items.. they're still making money.I guess I would be one of those shoppers the Best Buy CEO hates. I'm only there for the early bird specials!
Jennifer0530 Posted November 17, 2005 Posted November 17, 2005 I personally don't think they lose any money. I am sure they have contracts to buy the stuff dirt cheap for BF so they can resell it to us cheaper than normal but still make a profit. I don't believe any company would ever sell products/services for so little that they can't make a profit, that would be stupid. Besides like someone else said prices are already raised probably between 70-100% over what they paid so even if they offer 50% off they would still be making a 50% profit.
nicemann Posted November 17, 2005 Posted November 17, 2005 LOL I don't know what companys you guys have looked at but the discounters (Target, Wal-Mart, KMart) usually only run a 25% markup tops. On the electronics they run even much less. Usually 5-15%. On BF they sometimes do get better deals from the manufactors because they buy so much in bulk. They usual break even sometimes even lose 5-10% on the items.
DaleRider Posted November 17, 2005 Posted November 17, 2005 A lot of BF doorbuster items are considered "loss-leaders", meaning the stores do sell the items at either a loss, very little or no profit at all. They're designed to get you into the store and, hopefully, sell you other products in addition or alternatively to the loss-leader. Interestingly, in retail, when talkingof markup, a 50% markup is a doubling of the wholesale price.....the wholesale price is 50% of the retail price. Usually items are marked up 50% plus a small percentage added because of theft losses, credit card transaction fees, etc. The high ticket items are marked up less, the low-dollar items are typically marked up many times their wholesale price. A pack of printer paper, the typical 500 sheet ream, while selling for $4.50 or so may only cost the store $1 or less. That's where a lot of the money's made. In BB's store, the Geek Squad is a huge markup ($60 to "optomize" your computer? $50 to install a video card or $40 to slap a memory chip in? Geez!!!) But I'd bet BB is not making much, if anything at all, on the $150 eMachines computer....hoping to sell out quickly and upsell to a non-sale computer....after all, you've been in line for a while and you hate to leave empty handed.
DaleRider Posted November 17, 2005 Posted November 17, 2005 LOL I don't know what companys you guys have looked at but the discounters (Target, Wal-Mart, KMart) usually only run a 25% markup tops. On the electronics they run even much less. Usually 5-15%. On BF they sometimes do get better deals from the manufactors because they buy so much in bulk. They usual break even sometimes even lose 5-10% on the items. And that's hitting the nail on the head! I managed a bicycle shop for 6 1/2 years (we sold Schwinn while they were in business, Trek, Cannondale, GT, Klein, Litespeed, Santana, and a few others.) Our markup on complete bicycles was at best 20-24%, some much lower as you approached the entry-level bikes. We made our money in our shop with accessory sales, repairs, and the like. Bike tire tubes, the ones you pay $3.99 for, we paid on average .49-.69 each for.....sometimes in bulk as low as .25/ea. Huge markup on them and we sold a ton.
Jennifer0530 Posted November 17, 2005 Posted November 17, 2005 But I'd bet BB is not making much, if anything at all, on the $150 eMachines computer....hoping to sell out quickly and upsell to a non-sale computer....after all, you've been in line for a while and you hate to leave empty handed. I never really thought of it that way. But it makes alot of sense. I know I would probably be one of those people who would not want to leave empty handed! I would probably go with the next best deal. But still either way you look at it, all these companys are marking their money back one way or another on BF.
pebbles Posted November 17, 2005 Posted November 17, 2005 I never really thought of it that way. But it makes alot of sense. I know I would probably be one of those people who would not want to leave empty handed! I would probably go with the next best deal. But still either way you look at it, all these companys are marking their money back one way or another on BF.Jennifer, Just had to make a post following yours to wave the Buckeye Flag!! Go Bucks!!
Jennifer0530 Posted November 17, 2005 Posted November 17, 2005 Jennifer, Just had to make a post following yours to wave the Buckeye Flag!! Go Bucks!!I hear ya! The biggest rivalry in the Big 10! We have to compete everywhere not just on the field! Go Blue!!
Tara3117 Posted November 17, 2005 Posted November 17, 2005 I don't think stores are losing too much on the BF sales. If you consider that BF no longer has the highest sales volumes, the stores aren't doing too badly. Anything that they lose on BF will almost definitely be made up on the Saturday before Christmas.
Mommie2one Posted November 17, 2005 Posted November 17, 2005 Im sure they make money somehow. Definate mark ups
favdog Posted November 17, 2005 Posted November 17, 2005 I think they make their money in the advertisment they get. Sure the stores do not like their ads being leaked, but at the same time think about how many website hits they've had because of the ads being leaked. Not to mention people like us talking to family and friends about the deals.
Guest all2tired Posted November 17, 2005 Posted November 17, 2005 If they do lose any money, I'm sure they more than make up for it from ppl purchasing more than what they intended to. I need 2 things and I'm sure that when I walk out of the store, I'll have at least 5 bags of stuff.
saturnboy01 Posted November 17, 2005 Posted November 17, 2005 I dont think they lose too much money. I mean all sales are is bringing the price back to reality! I mean take The Gap for instance there markup on some items is 400% so a shirt that sells for $90 and is on "sale" for $49.99 is bringing the price back to earth people!! Plus the shirt may only cost Gap $5.00 to produce and they are selling "sale items" for $50?? HA~!
Genkii Posted November 17, 2005 Posted November 17, 2005 These companies definitely make a profit even with the black friday prices. Here's a great example a few years ago at Best Buy......they had a Sony Pentium 4 2.6 Ghz computer with a 15 inch Sony LCD monitor(don't know if some of u remember?) for $1,200 after a $800 rebate. The catch was that while in line they would add stuff to your cart without asking. The BBY employees would immediately put what they called "packages" (bronze, silver, gold)....it was somewhere between $100 to $300 bucks. They tried to put the $100 accesory package (surge protector, air duster, mouspad, USB cable...etc) on everyone's computer right when you picked it up. I was like hell with that and put that junk package back on the shelf.....and it doesn't stop there. While in line they would have these check points where at first it seems like they would like to help you check out the line faster by making sure you got what you wanted. Instead they would try to stick you with those packages again. If you didn't want it then they would try to make you buy the more expensive packages or even single accessories since they knew you know that stuff in the packages was cheap (probably less than $15 bucks worth of stuff). They tried to sell me Monster cables (which by the way has like a 300% to 500% markup) and USB gold cables. They wouldn't leave until you said yes to at least one item.....so I did but when they left I just threw it on the shelf. I'm like wtf....it's like WWII with all of these check points. At the end they even try to throw in the 2 year service plan and rang me up for it even though i said i didn't want it. Finally I said NO and they relented. Case in point....they still make up to $300 bucks or more when they sell those computers and some of those computers like mine was custom made so BBY of course had to get a discount in bulk. Heck some of the customers fell for it. Some who bought those e-machines hoping to get one for like $350 eventually spent an additional $200 to $300 bucks easily. As you can see there might be a profit of something around $0 to $200 just by selling that computer alone and then up to $300+ with those accessories or extended service plans.
saturnboy01 Posted November 17, 2005 Posted November 17, 2005 These companies definitely make a profit even with the black friday prices. Here's a great example a few years ago at Best Buy......they had a Sony Pentium 4 2.6 Ghz computer with a 15 inch Sony LCD monitor(don't know if some of u remember?) for $1,200 after a $800 rebate. The catch was that while in line they would add stuff to your cart without asking. The BBY employees would immediately put what they called "packages" (bronze, silver, gold)....it was somewhere between $100 to $300 bucks. They tried to put the $100 accesory package (surge protector, air duster, mouspad, USB cable...etc) on everyone's computer right when you picked it up. I was like hell with that and put that junk package back on the shelf.....and it doesn't stop there. While in line they would have these check points where at first it seems like they would like to help you check out the line faster by making sure you got what you wanted. Instead they would try to stick you with those packages again. If you didn't want it then they would try to make you buy the more expensive packages or even single accessories since they knew you know that stuff in the packages was cheap (probably less than $15 bucks worth of stuff). They tried to sell me Monster cables (which by the way has like a 300% to 500% markup) and USB gold cables. They wouldn't leave until you said yes to at least one item.....so I did but when they left I just threw it on the shelf. I'm like wtf....it's like WWII with all of these check points. At the end they even try to throw in the 2 year service plan and rang me up for it even though i said i didn't want it. Finally I said NO and they relented. Case in point....they still make up to $300 bucks or more when they sell those computers and some of those computers like mine was custom made so BBY of course had to get a discount in bulk. Heck some of the customers fell for it. Some who bought those e-machines hoping to get one for like $350 eventually spent an additional $200 to $300 bucks easily. As you can see there might be a profit of something around $0 to $200 just by selling that computer alone and then up to $300+ with those accessories or extended service plans. F! the access package and F! the service plans! I plan to walk in with $200 and walk out with some change and an Emachine computer! I am a VERY "tough" person and dont mind saying to the bb employees to freakin get lost I DONT WANT anything else and walk away from them. DONT let them get you sucked into their traps!!! Get your pc and get out!!
ebony0421 Posted November 17, 2005 Posted November 17, 2005 I think it's a Lose/Win for the retailers. Not everyone is interested in the doorbusters or willing to get up that early in the morning to get them.
saturnboy01 Posted November 17, 2005 Posted November 17, 2005 But for those 50 or so per store that are willing to get up its a win situation for the store cause they are still making some sort of profit. I dont care as long as I get me one of those emachines from BB.
ShawnainKY02 Posted November 17, 2005 Posted November 17, 2005 From experience... It depends on which department at Wal-Mart how much the mark up is. Electronic is the loss leader. But they still don't lose a lot. Because when you buy that Gameboy for $49 on BF, what do you have to have to go with it? Games. That is where all of their money is made. And for those of you that buy store brands. That is where they really make their money. Mark up on those items is outrageous. You will hardly ever find an item that they are actually losing money on, unless it is clearance.
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