Debunking a VGC myth: PS3 needs more stock because it ships to more countries

[Troll_Whisperer]

Machina said:

Troll_Whisperer said:

Machina said:
I think you may be ignoring at least 2 factors. 1) there are going to be efficiencies inherent in shipping to a smaller number of countries vs. a larger number (this is an extension of thrusting's point above), and 2) there are going to be self-through differences between (to simplify things) the States and the 'Other', smaller countries (a smaller market is going to sell through at a slower rate, and this will be duplicated across multiple countries, which means there'll be more on the shelves at any one time for that product... i.e. more stock).

But if these countries sell more slowly, wouldn't they alse require less stock?

That's my point, if you sell less units you order less. You don't need 1m PS3's if you need 1 year to sell them.

I don't think Sony wants outdated PS3's in these countries either, so they must be aiming at a similar shipping rate.

No because there are inefficiencies inherent in shipping to more countries/smaller stores. I think it's a gross over-simplification of the whole process to (essentially) say that Shop 1 sells 100 units of Product X each week, whilst Shop A and Shop B both sell 50 units each week of competing Product Y, therefore the stock levels will be equal for both products. If replicated on a large scale Product Y is - almost all of the time - going to have more stock in the channel. All shipment turns to sales eventually, of course, but there will be a greater disparity between shipped and sold for Product Y in the meantime.

As I have said before, if a store orders PS3's, say, once a year, it'll mean some stores will have more stock than needed and some will have almost nothing (small market, plus almost depleted stock about to have a 1-year order), meaning the average should come to about the same.

Edit: Just to make myself clear. It may be true that when it comes to smaller and harder to reach countries the disparities may be bigger. But some in some stores that disparity will mean having more units than necessary and in some others it will mean the opposite. The disparity won't always mean overstock, because some stores will wait until selling their stock before ordering the next batch. The average should be similar.