NintendoPie said:
Well then how does Nintendo lose 21$ on every Wii U we purchase if they already sold it to the seller? |
To Nintendo.. sold and the $21 loss is based on their negotiated price with the retailer, not what the consumer pays.
Nintendo sells a wiiu deluxe to walmart for $340. It costs Nintendo $361 to make and distribute the console. THey lose $21.
Walmart then sells the console for $350 and makes $10 on it before their own expenses are taken out. Walmart decides to do a promtion on their own to drive sales, they sell the console for $300. Walmart still paid $340 and is now losing $40 per console. However, the greater majority of purchasers use that savings to buy controllers, games, books, clothes, groceries, condoms, lube, etc and Walmart overall makes a shit-ton.
The MSRP is not what a retailer pays. Its just hte suggest price the company wants the retialer to use that accounts for the retailers profit or margin above what teh company is selling the product to the retailer for.
The difference would be if it were a full sale initiated by Nintendo where they gave a reduced price to all retailers and thus told them to reduce the MSRP to some lower price as well. This in fact wouldn't affect the retailers as their margin remains the same but Nintendo is simply making less. In this case since its only Costco, its like a costco initiated thing.
