Its sad that you take ethics so lightly.
I'm not a sucker- I just have ethics.
Damaged goods are "insured" only in the sense of shipping damage (in which case the risk of loss depends on the shipping contract. Once the risk of loss has shifted to the retailer, the only insurance clauses that cover inventory deal with things like fire, flood, and acts of god. Since putting in a claim will likely raise the insured's rates (which would, in turn, raise operating costs, and thus prices), the only time a claim is made is when losses reach near total levels. Small numbers of broken merchandise are losses that can only be recovered by charging a certain percent markup on prices on the other units or throughout the store.
No they don't. You know that shipping charge you pay? That is you paying not only for the cost of shipping but the risk of loss as well. They have shifted that entire cost to you and the shipping company. The price you pay is the cost of losses the shipping company suffers annually due to damages and mail fraud, distributed over their entire customer base.
The same costs as on the test drive: the product recieves wear & tear; the cost of the employee's time wasted (since you have 0 interest in buying in that store) talking to you when he could have been doing something productive for the store like restocking or monitoring shoplifters; the opportunity costs of that employee not selling to someone else who MIGHT have an interest in spending money in the store, the physical damage your non-paying presence is doing to the infrastructure of the store, etc.
The costs would be calculated by:
1) figuring out the prorated cost of the employee's wages (lets say...$3.50 for 30 minutes) devoted to serving someone pretending to be a customer,
2) plus the opportunity cost of a lost sale: the probability of a sale by the employee who was waiting on you- in a half-hour, I'd say 10%x the cost of the average (mean) product in the store - lets say $15, for another $1.50. A weighted mean would be more accurate, but for that I'd need the prices of everything in the store + sales volume by product.
3) plus the cost of wear and tear on the product and other factors. I'm just geussing here, but lets call it...$0.15. Just remember, everything counts in large amounts.
Total, $5.15.
I can guarantee you that every major retailer- Wal-Mart, Amazon, B&N, etc. has access to reports that let them know who the competition is for every category of product they sell in every region. I'm currently handling an account that breaks down a certain category of products in the D/FW market down to individual businesses spending as little as $13 dollars (not 13M, or thousand...just dollars) in that category. LGSs fall into a category called "Specialty Stores" when it comes to things like sci-fi movie tie-ins- the money that the big boys REALLY want.
And you called ME a sucker? HA!
If they are trying to drive competition out of the market, Amazon (or any major online retailer) can drop prices on a particular category of product as low as they want because they move SO MUCH product, they can cover the loss with a few pennies added onto everything else they sell- and STILL pay off the publisher. They can also decide to pay the publisher late, gaining money on the time-value of money. This is what the major auto manufacturers do- they pay their suppliers 30-90 days late, all the while earning money on the money they haven't disbursed.
And as for not selling to Amazon- there isn't a publisher out there who doesn't want to have millions and millions of potential sales outlets. Unless the terms of the agreement are egregious, most publishers would be loathe to pass up that opportunity.
Wrong again. Products get sold for a loss every day by businesses. Dumping is when products are sold at a loss as a sustained business practice in order to gain market share- which, as the old saying goes, is not illegal 'till you get caught.
Dumping/Predatory pricing is one of the most common illegal business practices out there, at least as far as the allegations in filed lawsuits indicates. Its also damned hard to prove because the best source of records you would need to prove a case of dumping/predatory pricing are in the hands of the alleged offender.
Currently, Wal-Mart is under investigation for predatory pricing in several states, and other retailers may follow.
Here's why.
)
