Hey Everyone, Does anyone know the price Nintendo sells DS Lites to resellers at? Virtually all retailer who sell DS Lites sell them at the same price, so the max sell price and cost price must be regulated rather tightly? I assume given this fact, retailers don't make too much money on the consoles?
That's usually how it is with any console. The retailers buy at a set price and sell at the MSRP typically because people will spend what it takes to get the hardware. Even so, the manufacturer knows it must be price-conscious in order to sell a product successfully, so ultimately, the manufacturer and the retailer don't make much profit.. sometimes, the manuf. loses money for each unit sold, but that's in the beginning of the hardware life cycle. Some companies like Nintendo aim to make a profit off console hardware from the start. Overall, manufs. and retailers rely on SOFTWARE and ACCESSORIES to make up the real profit. The console is just the gun; the rest is the ammunition. I'm sure someone else here can explain this better and has better knowledge on the subject.
I guess most employee discount places like shoppers drug mart (Canada) as an example only discount down to cost right? That would mean, for consoles, even if you worked for places that gave a discount, you still wouldn't get any significant savings?
When I worked for best buy ages ago, I saved I think $3 on a system. Anything made in china is huge savings. Controllers dropped to $7, and cables to $2. Memory card have almost no discount either.
Official hardware (consoles, controllers, mem cards) tend to have about a $1 markup. I looked up the consoles at major vendor's websites and their price was about $1-$2 below retail price.
The money is made on the games and to a lesser extent the peripherals sold, not the hardware (generally).
I'll probably end up getting the hardware from China. Since most of the consoles are produced in China, its not uncommon to find "extra" hardware in the market cheaper. That is, extra units produced on the side for profit, or like-new refurbished units rejected for something really silly (miss aligned labels) or stuff like that.
UK cost price of a DS lite is £92 after VAT. RRP is £99.99. Whilst by any other retailers standards that margin is terrible.. it's actually quite a whopping markup for new hardware. :s I remember that PS2 slims used to cost us £98.40, when RRP was £99.99. Oh, and by the way - support your local indie! (just dont ask them for a discount on new hardware )
There is also a factor of what is called MAP pricing which is Minimum advertised pricing. I am uncertain if Nintendo uses this, I know Bose, apple, and several other companies used to use this in their contracts. This states that regardless of what you sell it at you are not allowed to advertise it for sale for less than the list price. If you can not advertise something for sale below a certain price, then it makes no sense to sell below that price. It doesn't matter if you sell the DS for ten dollars less if you can't advertise it anywhere even on your website. If I remember from the old days most systems had a few dollars markup, that after you factored in the cost of operations you usually lost money. Contracts were however structured a lot of times to pay for advertising money (now available at .....), and if you hit certain sales goals (units, attachments, not carrying competition or having a minimum ratio of their units vs their competition units you would receive a set amount of funds) Intel was using that a few years back to guarantee a set market share from big companies. AMD sued them, however I don't know what the outcome of that was. There are some companies that go so far as to make it a contract requirement that you sell at a certain price point. This isn't as common anymore as this violates laws in most areas. I used to work at a discount store and people would constantly ask me if we carried beer or cigarettes. I always wanted to tell them that it would not matter if we did as we would have to sell it at the same price as everyone else as state law did have a minimum price you could sell it for. I never explained that to anyone as I figured they would call and complain about my being rude to them, when in reality I would just be explaining the situation to them.
