| FishyJoe said: It sure would suck to be a retailer stuck with pallets full of PS3s you already paid for. |
When Sony, Microsoft, Nintendo, or just about any other company drops the retail price of a product they offer the difference between the prices as credit towards future purchases. As long as its Sony who drops the price the stores are out nothing.
Anyways most of the time items are shipped to stores then it is not paid for until 1 to 2 months later. Stores and companies capable of selling the products quickly can make money on this period which is called the float. Most retailers don't even have enough money to actually purchase the stock they have in the store when it is shipped in. When a product sells badly but the company which produced the product wants to continue shipping product (PS3, PSP, 360 etc) the length of time which is allowed between shipping and payment is increased. Its also not uncommon to tie it to sales so it is not paid for until it sells. I am not sure how Microsoft and Sony are working it but I doubt companies would be accepting so many units if they had to pay for them anytime soon.
I should point out Dell makes most of their money by investing the money during this period by building all of its computers just in time with the shipments of parts showing up sometimes only hours before the system is shipped to a customer. This is why Dell can offer such huge discounts because it does not have to make any money off the sale of the system to actually produce a profit on it.
