Tweeter files Chapter 11

Off topic, uncensored, and mostly unmoderated.
User avatar
Atomic Fusion
Posts: 6230
Joined: Fri Oct 19, 2001 11:00 am
Location: Earth

Postby Atomic Fusion » Mon Jul 23, 2007 3:18 pm

Big Mack wrote:Where do you get that DVD's and CD's carry zero margins? They are among the profit centers of most retail stores. I'm not talking about the bargain bin units that will get people in, but a typical DVD that is brand new and costs $18-23 has about 50-60 points in it for the studios, and 20-30 points for the retailers. Once it hits the 6 month mark, it can hit the bargain bin and still be 10-15 points. CD's are usually on sale the first week for about $10, but still carry about 10-15 points at that level. Sell them at the $14 mark, and they can be as high as 40.

TV's typically have 20 points, not 25-30, but I agree that this can be cut down with wheeling and dealing --- but warranties help out here. No one buys a warranty for CD's or DVD's, but they damn sure do for TV's. Accessories are also a huge margin for TV's, since most stores carry 60 point products in this, and customers go for the impulse "I need cables" buy many times.

As for the rest, I agree. B&M stores have inherent costs that the employees generally don't understand. It's a jungle out there, but BBY seems to do it well. CC, not so much.

Big Mack


I used to work at Best Buy. DVD's and cd's were often sold at or below cost - brand new releases. Their purpose is to draw customers in as a necessary evil. They are not profitable for the store.

Adam
Found something better.
SIN's Freelance Female "Rear Entry" Super Hero
User avatar
Big Mack
Posts: 4622
Joined: Thu Oct 28, 1999 12:00 pm
Location: Phoen-town, USA

Postby Big Mack » Mon Jul 23, 2007 4:14 pm

Atomic Fusion wrote:I used to work at Best Buy. DVD's and cd's were often sold at or below cost - brand new releases. Their purpose is to draw customers in as a necessary evil. They are not profitable for the store.

Adam


And how long ago was that, Atom? Retailers see a profit on the discs, and engage in profit sharing with the studios (who make a king's ransom on a brand new disc). There's a book called the "Movie Business Book" that explains how part of it works. If a movie sells 1M copies at $18 a pop, the retailers are making about $3M. If all they were selling were DVD's, they may not be able to cover their expenses, but they do make money on them.

Big Mack
User avatar
Atomic Fusion
Posts: 6230
Joined: Fri Oct 19, 2001 11:00 am
Location: Earth

Postby Atomic Fusion » Tue Jul 24, 2007 8:54 am

Big Mack wrote:And how long ago was that, Atom? Retailers see a profit on the discs, and engage in profit sharing with the studios (who make a king's ransom on a brand new disc). There's a book called the "Movie Business Book" that explains how part of it works. If a movie sells 1M copies at $18 a pop, the retailers are making about $3M. If all they were selling were DVD's, they may not be able to cover their expenses, but they do make money on them.

Big Mack


A few years ago.

I should qualify my statements a little more.

At the store itself, DVD's are regularly sold at or below cost Not all of them are... Prices have been bumped up to increase margin a bit. However, the section is hardly a big money maker. That is a fact, and I'm quite sure it hasn't changed, especially since I know how to check margins at Best Buy simply by looking at a code on the computer screen whenever I buy something there.

Whatever profit making deals go on at the corporate level I have no direct knowledge of.

Adam
Found something better.

SIN's Freelance Female "Rear Entry" Super Hero

Return to “Off Topic : The Hell Hole”

Who is online

Users browsing this forum: No registered users and 1 guest