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.
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.