[Sigia-l] Game Console Business Model (Was: WhatsWrongWithU)

Skot Nelson skot at penguinstorm.com
Mon Feb 12 13:50:10 EST 2007


James Melzer wrote:
> I doubt retailers have margins that fine. Most toy retailers double
> the wholesale cost to calculate their retail price. You gotta keep the
> lights on and pay the staff, after all. I don't know much about
> electronics retailers, but everybody in retail has basically the same
> overhead.

Try selling iPods. The markup in Canada on a 20GB iPod was about $20 at 
one point.

I had a Mac dealer in Vancouver once tell me that the profit on an iMac 
(Bondi Blue, no less) was about the same. In that case, keep in mind 
that the people buying them are the new users...the ones who are going 
to consume your staff's time and resources asking questions like "Where 
do I plug the mouse in."

So yes, your rule is a general guideline -- one that retailers target -- 
but in cases where products are in high demand this rule often gets ignored.

It's not like a toy retailer can choose NOT to sell the Wii, right? If 
it's the Must Have Toy of the Season you have to have it, even if the 
markup is marginal. It's hard to sell that 100% marked up Nerf Football 
if all your customers are down the road at FAO Schwartz.
-- 
Skot Nelson
skot (at) penguinstorm (dot) com

      Music is my saviour / I was maimed by rock and roll
           - Jeff Tweedy



More information about the Sigia-l mailing list