Sony channel stuffing PS3's to retailers (w/ pics).. AGGRIVATING.

[M.U.G.E.N]

ils411 said:

Darth Tigris said:

ils411 said:

yes, it does make sense to return products to suppliers if they are too slow moving or sells too few units over a period of time. This is usually a decision that is made after reviewing sales vs payment terms. For example, lets say sony delivered 50 units of PS3s to a retail outlet and the store can only sell 5 PS3s per month. THis means that they can sell through the initial delivery after 10 months. THis is all well and fine but if payment terms is 30 days, this means that after the first month afer delivery, the retail outlet already has to pay Sony for the 50 PS3s even if there are still 45 units sitting in their stores. This is very undesirable as the retailer's money is sitting on stocks and will only be liquidated after 9 more months. If this is the case, they can opt to return a portion of that inventory to Sony to free up space in store and to free up money that can be invested else where.

On consignment basis/ consensionair basis, Sony can ship as much shit as their heart's please. Though I'm not sure if Sony does consignment terms. My only experience on electronics and stuff like that is on some basic hardware items such as some hand tools, light bulbs and the likes. I had an agreement with the supplier to have terms on a consignment basis. So I just tell the stores to provide this supplier with space and the supplier will in turn fill that space with as much shit as they want. This is all ok since we dont have to pay them for their entire shipment. Only for the items actually sold. If items are not selling, the supplier will initiate pull out of none selling items and replace them with other items in the hopes that those new items will sell. We get our sales, only pay for actuall sold and the supplier getrs to deliver as much shit as they want. This way, everyone is happy...well, at least the purchasing team and the supplier is happy, the store managers are usually in the losing end as they go "where the fuck are we suppose to find space for this supplier? we're already stuffed with other items you asshole!" and i go "just to do your job and find space deepshit!" hahahahha!!! yeah, those were the days...

Hmmm.  Interesting.

If retailers CAN return console stock to the manufacturer, doesn't that throw off ALL shipping figures???

not really, returned stocks would just be re-channeled to different outlets that needs the stocks. hence, the shipment figures would remain the same. Unless of course if the returns were massive as hell. But i doubt that as Sony, even though they have sales targetrs, would not overship PS3s to the extent that they would incur massive returns.

Also, it should be noted that returns are usually done as a last ditch effort. I dunno about how other retailers handle overstocks, but when I used to work in retail, we usually transfer stocks from one store that is overstocked to another store that needs the stocks. Returns are a pain in the ass to process for both parties hence its a last resort.

Plus, in my experience, I sometimes view overstocks as an oportunity to get the supplier to support us. For example, lets say i had 500 of item x and could only sell 100 units of this item this christmas. Instead of returning the item, i request for bundling promotions or discounting promotions from the supplier. Bundling promotions and price offs are a better solution for suppliers as they wouldn't have to take back the stocks. In the end, I would have an exclusive bundling promotion or price off only available in our stores which we will intrun advertise with the aid of the suppliers to get more customers to go into our stores instead of our competitors.l

correct me if I'm wrong here

1. Sony can't ship 'as much as they want' if its a consignment, there are specific conditions for such deals and must align with company policies as in can't be out of the norm of how they do things

2. consignment will be still marked as inventory not sales. It will be marked as inventory on consignment with finished goods being credited in the books. Sales will not be recorded unless a 'sale' has taken place between the consignee and a customer at which point they can mark it as a sale.

Not sure how sony indicate their shipping numbers in their financials as I haven't really bothered to read through their 10k but they should at least mention such dealings in footnote according to GAAP, not sure about IFRS standards but I'm sure they have something along the same lines as well

so what I'm trying to say here is that, chances are these are not consignment, at least not to the point of having a significant impact on the financials, I would have imagined we would have heard of it if it was the case.

Again this is not channel stuffing, it's about either GS HQ ordering too much, logistic team effing up the ditribution, some stores used as strategic warehouses or Sony shipping with a buy back agreement with GS....or GS thinks they they might need the excess stock to avoid shortages like last year. All in all we knows nothing since we have no idea how the inner financials are for GS.