Just … if your store ordered a lot of a certain clothing item, assuming it would sell well, but then it didn’t sell well, what do you do with it? If you leave it on the store shelves, it’s taking up valuable retail space that could be better utilized for displaying and selling something people actually want. Storing it in some back room isn’t going to work well – that will build up over time and you’ll end up having a whole warehouse of unwanted clothing.
Option 1: The right thing to do would be to put those items on sale/discount until they do sell. All the way down to free if you have to. But some stores think that would ‘cheapen their brand’, and most stores don’t want you to buy something at a steep discount if it means you’ll no longer buy a similar item for full price.
Option 2: You could send the unsold stock off to a discount/outlet retailer and let them sell it at a discount … if you even have such a company anywhere around. Or you donate it to some charity for a tax writeoff. But then there’s the expense of actually getting it there.
Option 3: You could send unsold stock back to the manufacturer … but that would be expensive shipping and the manufacturer usually doesn’t want it back, which is why nobody does this.
Option 4: You destroy it and/or just toss it in the dumpster out back. Cheap, fast, and easy.
Hopefully, making Option 4 illegal will make Options 1 and 2 more appealing.
you donate it to some charity for a tax writeoff. But then there’s the expense of actually getting it there.
Working for a food retailer I can tell you that charities are more than happy to collect. So, no transport cost isn’t a real argument.
Process is, Store doesn’t sell > sends back to distribution centre using the lorry that delivered new stock so lorry isn’t running empty > charity arranes collection from distribution centre.
It’s so very kind of you to imagine good will behind their motives. I am very sorry to inform you that is incorrect, they very much don’t want their clothes available in charities or even discounted, because it cheapens their brand overall. It’s malicious, as all capitalism, inherently, is. They don’t want “poor” people wearing their brands. They would rather take a loss, than sell the item at discount, they very much have infrastructure available to afford other avenues, they choose not to, because scarcity invokes a higher price on their product. Plus the status of high prices, keeps a ratio of higher price per product, which means a higher profit margin per product, the item probably costs them 5c to make, they sell it for hundreds, what they most want is to protect that margin, if their last season stock were available at half price, anywhere, people en masse would just buy last seasons stock. Destroying it, even though they make a massive loss by doing that, protects their future profits.
Here’s an idea. Instead of having artificial scarcity, they could have actual scarcity. Don’t manufacture 10 000 super fancy shirts. Make only 500. They will run out sooner than anyone wants, you’ll still make absurd profits and customers are left wanting more. When the next season rolls around, you make 500 of the same shirt, but in a different color. Charge 2x more than last time, but you’ll be able to sell them anyway now that people know how fast they disappeared last time.
Side note: Making stuff to feed the vanity of millionaires is revolting, but at least this way it doesn’t have to be so wasteful.
But see, if I order 10,000 I get the bulk price of $5 each. If I only order 500 then they will cost the seller $40 each.
Of course this effect can be minimized with annual volume commitments where a miss means that you simply pay your supplier the difference.
The reality is that the normal situation will not be a difference as stark as this example, but some form of it exists.
Yeah, I guess we need a third category then. What they’re currently doing involves overproduction at first, but that is later turned into artificial scarcity by destroying the products. How’s “extra wasteful, diabolical scarcity” for a term?
This will definitely give the knockoffs a boost. But fuck these wasteful companies that destroy excess just to pump up their prices from scarcity.
I don’t know if it’s necessarily that malicious.
Just … if your store ordered a lot of a certain clothing item, assuming it would sell well, but then it didn’t sell well, what do you do with it? If you leave it on the store shelves, it’s taking up valuable retail space that could be better utilized for displaying and selling something people actually want. Storing it in some back room isn’t going to work well – that will build up over time and you’ll end up having a whole warehouse of unwanted clothing.
Option 1: The right thing to do would be to put those items on sale/discount until they do sell. All the way down to free if you have to. But some stores think that would ‘cheapen their brand’, and most stores don’t want you to buy something at a steep discount if it means you’ll no longer buy a similar item for full price.
Option 2: You could send the unsold stock off to a discount/outlet retailer and let them sell it at a discount … if you even have such a company anywhere around. Or you donate it to some charity for a tax writeoff. But then there’s the expense of actually getting it there.
Option 3: You could send unsold stock back to the manufacturer … but that would be expensive shipping and the manufacturer usually doesn’t want it back, which is why nobody does this.
Option 4: You destroy it and/or just toss it in the dumpster out back. Cheap, fast, and easy.
Hopefully, making Option 4 illegal will make Options 1 and 2 more appealing.
Working for a food retailer I can tell you that charities are more than happy to collect. So, no transport cost isn’t a real argument.
Process is, Store doesn’t sell > sends back to distribution centre using the lorry that delivered new stock so lorry isn’t running empty > charity arranes collection from distribution centre.
It’s so very kind of you to imagine good will behind their motives. I am very sorry to inform you that is incorrect, they very much don’t want their clothes available in charities or even discounted, because it cheapens their brand overall. It’s malicious, as all capitalism, inherently, is. They don’t want “poor” people wearing their brands. They would rather take a loss, than sell the item at discount, they very much have infrastructure available to afford other avenues, they choose not to, because scarcity invokes a higher price on their product. Plus the status of high prices, keeps a ratio of higher price per product, which means a higher profit margin per product, the item probably costs them 5c to make, they sell it for hundreds, what they most want is to protect that margin, if their last season stock were available at half price, anywhere, people en masse would just buy last seasons stock. Destroying it, even though they make a massive loss by doing that, protects their future profits.
Here’s an idea. Instead of having artificial scarcity, they could have actual scarcity. Don’t manufacture 10 000 super fancy shirts. Make only 500. They will run out sooner than anyone wants, you’ll still make absurd profits and customers are left wanting more. When the next season rolls around, you make 500 of the same shirt, but in a different color. Charge 2x more than last time, but you’ll be able to sell them anyway now that people know how fast they disappeared last time.
Side note: Making stuff to feed the vanity of millionaires is revolting, but at least this way it doesn’t have to be so wasteful.
But see, if I order 10,000 I get the bulk price of $5 each. If I only order 500 then they will cost the seller $40 each. Of course this effect can be minimized with annual volume commitments where a miss means that you simply pay your supplier the difference.
The reality is that the normal situation will not be a difference as stark as this example, but some form of it exists.
And the decision is always guided by greed and complete disregard for sustainability.
Isn’t that exactly what artificial scarcity is? Limited stock for the sake of limiting it, not due to actual supply/demand.
Yeah, I guess we need a third category then. What they’re currently doing involves overproduction at first, but that is later turned into artificial scarcity by destroying the products. How’s “extra wasteful, diabolical scarcity” for a term?