| famousringo said: Selling a product below cost is called dumping, a predatory form of market manipulation designed to undermine competitors and drive them out of the market. It's an attempt to establish a monopoly. I'd much rather a company make an honest profit with their goods than try to establish a stranglehold on the market so they can set prices where ever they like later. |
Dumping occurs if a company exports a product at a price lower than the price it normally charges on its own home market.
As an example, if it costs Nintendo $200 to manufacture a Wii, and sells it in Japan for $250 but at $150 in the US to counter prices of the 360, then it would be considered dumping.
If it costs Sony $800 to manufacture a PS3 but sells is at below cost worldwide, then it is not considered dumping.
Printer manufacturers have been engaged in this practice for years (and barring Nintendo, so have all the other console manufacturers): They sell the printer (console) at a loss, expecting to recoup the losses and make a profit through consumables such as toners and ink cartridges (games, controllers).
