James Wilkinson Sword wrote:
On Mon, 01 Jan 2018 19:02:10 -0000, Michael A Terrell
wrote:

James Wilkinson Sword wrote:

Let's say I have a shop with shelf space for 500 microwaves. If
the expensive ones make me £50 and the cheap ones make me £10, I
ain't gonna sell the cheap ones.

You aren't going to sell much of anything. People will go
elsewhere to by their microwave,

No, because the moron next door is marking up the expensive ones too
much, so everyone buying decent ovens comes to me.


So, everyone else is a moron, except for you? This explains more
than you know. How will you eliminate the overhead for your store? Only
sell stolen goods? No business phone, or insurance? No employees? Maybe
a dirt floor, in a tin shack?


and take their other business with them. First of
all, it would be foolish to put out 500 units on retail shelves.

Give reasoning. There might be 500 different models, anyway it was a
figure plucked out of thin air. I'd probably be selling other devices
and wouldn't have room for 500.


Probably? You have no idea how to create a business plan. Without
one, you'll have to front all of the CASH to stock your store. No floor
plan, where the seller retains ownership of the merchandise until it's
retailed.

Secondly, a lot of people who buy high end items don't go to a retail
store. They call a service company, tell them what they want. It is
delivered, and installed.

Only if you're a complete numpty that can't plug in something as
simple as a microwave oven.


High end microwaves are often installed under a cabinet. I guess all
you've ever see are the trailer park models that are small enough to
slide under those $10 cabinets. It required drilling holes in the
cabinets to hang the oven and installing wiring for the unit so that
makes you the 'numpty', whatever the hell that is.


The old one is hauled off as part of the
price. The seller's reputation is on the line for quality, so most of
the profit comes from the labor, not the markup.

I just bought a new microwave. It was a high end model that was
closed out for $60. The original price was $160. How much profit was
lost after that $100 discount?

Who knows, they were cutting losses as they couldn't get rid of them.


Which wouldn't happen, if someone didn't overstock on high end
products that they had no chance of selling.


BTW, that is the first new microwave that I've ever bought. I've
used them for 35 years, and I only paid $2 for a good used one, once.
The rest were repaired, mostly with used parts.

I bought one for £30 once. Basic model. The rest were free second
hand. Mainly due to idiots replacing perfectly working devices. It's
the same reason 2nd hand cars are so cheap, people pay £30,000 for a
new car, then sell it for half that after a couple of years.
Complete and utter fools.


If they didn't dump their still usable vehicles, you would never be able
to own any vehicle. Some people have valid reasons to trade in a two
year old car. Some people drive for a living, and put a lot of miles on
a vehicle. Sometimes their needs change, and their vehicle no longer
fits those needs.


Another example of silly marketing. I worked at a TV shop as a
teenager. They sold new and used Color TVs, and new B&W, but no used.
The owner gave me all the B&W trade ins that I sold from my home. I
sold more TVs than he did, and most weeks I sold more in used B&W
than he did in color sets.

If he was only going to make a few dollars for each used BnW sale,
then he was right not to bother. Why waste shop space?


He made no sale, since he didn't have what they wanted. This was the
mid '60s when money was quite tight in the area. The people couldn't
afford a new B&W set, which started at over $100 for anything worth
taking home. People in management jobs at the local factories bought new
color TVs. They were still vacuum tube, and they cost most working class
people four months or more of their income. Used color TVs were more
expensive than new sets, in that they needed a lot of repairs. My dad
bought one of the first Motorola Quasar color TVs. It had the first
rectangular color CRT. A 23EGP22. It was one of the worst color CRTs
made. In today's money that set would have cost thousands of dollars.

OTOH, I sold every usable TV as fast as I hauled them home, since I
had no place to store them. He was throwing away the profit of three to
five new color sets a week, in those B&W sets he was tossing out. I made
up to $50 on the free TVs that I sold, and he lost that much. Not only
that, but I had zero overhead, because there would be one to three TVs
sitting in the old carriage house, with a dirt floor.