My wife has been addicted to watching dumpster diving videos where people end up finding brand new expensive things thrown away by retailers. It made me remember reading somewhere that the reason they do this is because it’s cheaper for them to throw away or destroy their inventory than it is to give it away or sell at discount. HOW???
I don’t see how they could possibly save money by destroying inventory rather than putting it on extreme discount. Surely they could make more money selling at an extreme discount versus no money at all by destroying .
In: Economics
There are a lot of reasons.
Sometimes a brand wants to stay expensive, for their image, and sales can hurt that
Often selling things at discount means you’re directly competing with yourself, and someone buys a discounted item instead of a full price item
Other times having sold something cheap slows future sales because “it used to be X”. People are often bad at judging real world value but “X is more than Y” is really easy
Often even selling things at discount is slow, meaning you’re taking up space. That can be a rental cost or it can be an opportunity cost- some companies run out of very tight spaces
In some regimes you can declare it as a loss and benefit from that in various ways. (the company I worked for had one bad year and they dumped about 10 years worth of bad decisions in that one bad year, making for a bigger single year loss but also giving them a better-looking recovery the next year. Investors have short memories)
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