||07-14-2011 09:24 AM
Originally Posted by jlmran
Let's use the nailer as an example. If a box store were to realize a 5% loss on the nailer, but could realize a 50% gain on the nails needed to feed the nailer, then that's a pretty good scenario. Kind of like the Wal-Mart model.
Are you saying this could never happen at Lowes or Home Depot?
what I am saying.
HD or Lowes WILL be willing to make LESS PROFIT
on the tool with the understanding that they will make more on the consumables ( the nail in this example), but there is simply no reason for them to give up prime realestate to purposely take a loss on any item, especially when they can just pressure the manufacturer to lower their cost or be replaced by a competitor. They look at every item SKU by SKU. If an item doesn't have enough turns, and generate enough profit, they get rid of it. there are certain deparments where they will accept less profit ( power tools is one of them for sure).
The manufacturers and mom and pop stores might tell you that these guys take a loss on certain items, but I can tell you from first hand experiance that it simply doesn't happen.
clearance is the only expection, and even then they will often get money back from the vendor, and most seasonal type items have "markdown money" written right into the sales contract