vwbeetlvr

Does the studio give em kick backs or refunds or are they s.o.l.? I would imagine if they don't they would be leery of ordering too much stock.

calhoun07

They hope to make it up by having you buy other things that they make a larger profit margin on. If you choose to buy just that one item, they lose money on you. It's called a "loss leader" and stores have been using that for a long time now.

And if they ordered too much stock, then they can just adjust the price to normal if it doesn't sell once the sale is over. No biggie.

ernestrp

Thats an interesting question. Maybe they just take so many and agree to pay XX.XX to the publisher on what is sold. I dont think retail stores will lose anything during a price drop. If they did, they would wait until the higher price stock was sold before lowering the price on new stock. Sometimes it does seem that way though.

visitor Q

There's also another common instance in the retail industry - back end rebates. The supplier promises a "protection" of inventory, if you will. This is arranged in advance and on the fly. If there's a lower than expected sales performance of a title - usually (overstocked) blockbuster releases, the supplier will fund the vendor additional money on future orders or in the form of cash.

This doesn't only apply to DVDs of course.

mzupeman2

Well, I think retail stores will lose something on price drops. Space on the shelf that's not moving, to a company... it's space on a shelf that can be replaced with something that will sell. I work at a retail store, and although it's not DVD's, this mentality is also applied there. If it's been around for a while, and it absolutely won't sell no matter what the price, inventory it as a shop worn item or something of the like, and throw it away. Better to have that space back on the shelf. But for DVD's? Who doesn't like a cheap DVD? They can mark it down and still at least take something for it, rather than taking zero.

ernestrp

I think they can also return unsold Dvd's to the publisher as I have heard of people buying on-line and getting Dvd's with retail stores price stickers on them like walamrt, etc.

visitor Q

Yep, my employer does this. Unsold inventory is sent to a clearinghouse at a fraction of the original cost.

Puzznic

I think the big retailers have some kind of deal worked out since they have bargaining power with the studios.

I think small businesses are SOL for the most part.

vwbeetlvr

This is very interesting..

Rex Power Colt-Robot Man

They dont call em loss leader for nutthin

MarkHarrill

Businesses that are direct with the studios send in audited inventory lists of items that have dropped in price. The studios rebate the difference in form of credit memos. It is called price protection.