Klarinet Archive - Posting 000195.txt from 2004/06

From: ormondtoby@-----.net (Ormondtoby Montoya)
Subj: [kl] Distribution costs (was: scandal/reeds)
Date: Mon, 14 Jun 2004 15:59:43 -0400

Richard=A0Bush wrote:

> I do sell to some stores, BUT I only discount
> my reeds 20% to these stores. They handle
> my reeds because they are far superior to all
> others that they can get, they sell more of
> mine, probably because such customers
> would be special ordering otherwise, they
> have happier customers and those customers
> have increased traffic in their stores and they
> buy other things while there.

This is an excellent example, Richard, because it points out that stores
will accept a low margin on a particular item *if* the store can recoup
its 'loss' in other ways.

But this falls into the category of 'loss leader', which is a common
merchandising strategy for both retail stores and mass distributors.
That is, the retail price of clarinet reeds could be reduced also.... if
everyone in the supply chain decided to use clarinet reeds as a loss
leader.

You're comparing apples to oranges. Obviously the stores that sell
your bassoon reeds would not survive if they sold every item at 20%
margin.

The above isn't criticism, it's just an observation.

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