Loose 100% to get 10% profit
Tuesday, December 1st, 2009
Profit and Loss, Von Mises Institut…
Usually when we sell something and the item didn’t sell, we will try hard to sell it like bringing it out from the shelve or cut profit margin. When all the effort didn’t work we cut the profit till the lowest and hope for bargain hunters to come. Or trying the psychological marketing like buy one free one or buy this and get free that. But psychological marketing will not work on common items that people already know the current market price like for example a very well known brand we use everyday.
Very last choice is doing cheap sale. Better to get back some money before the items tend to be out of date and have no value if wait any longer especially electronics or digital items. For giant retailer that have big chain of shop nationwide, maybe old stock won’t be a big problem because they have good relationship with the supplier, got credit terms and big capital. But for small retailer or micro entrepreneur with very small capital, can’t afford not to sell when already buy products at wholesale price.
