Let’s take a phone merchand for example. Let’s say that he sells the phones for 500$, but his income from a phone is 50$ because they are sold 450$ from the factory. So, if just ONE phone isn’t sold, he’d lose 450$, and he’d need to sell 9 phones (450÷5) just to come back to the starting point.
This question also works for any kind of merchandizing, including food (which becomes unsellable after a few days unlike phones).
So how do they make profit of it ? I’m confused
This post is the same as a post I made 1 hour ago that corrects some words, sorry for my bad english.
In: Economics
Sometimes they have stocking deals with the manufacturer where unsold product gets returned and reimbursed.
Sometimes they do have to eat it, which is why stores generally dislike carrying large inventories of slow-moving items.
They don’t just buy and re-sell goods, they have sales contracts with each product manufacturer where they’ve negotiated a price and the details for what happens to unsold inventory.
An unsold iPhone probably does go back to Apple. An unsold carton of expired eggs is probably just written off as a loss.
Some brands do have outlets for their not-immediately-perishable food that’s slightly beyond the “best by” date – there used to be a store near me where Pepperidge Farm dumped all their slightly old inventory for cheap.
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