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

LivingMetal on 05 December 2010
dunno001 said:
DonFerrari said:
dunno001 said:

Wow, there's quite a few people in this thread who don't know how corporate retail works. Sure, smaller stores (ie, not part of a large chain) have more direct control over what they order, and other industries (like fast food) also have more control at a store level. But a company like Gamestop or Best Buy doesn't work like this at a store.

For a large store, orders are placed somewhere in the corporate ladder. (Usually, this is at a regional warehouse.) This warehouse then ships out to the stores for replenishment. Now, though, is when things tend to get tricky. A product that is in abundance in a warehouse will frequently be told to move it out to make space for more stuff coming in- by getting more to stores, it facilitates a possible store-level promotion to remove stock at their end, or a larger company promotion. (Suffice it to say, if this supply has been growing since September, it's not for a promotion.) Also, if a warehouse has excess stock that it ships out, it will also tend to scale orders back... if it can.

What, "if"? Yes, there are times when companies institute "quota sales" on items. Standalone Move wands are in short supply in many areas. However, Sony may be setting a ratio on this item- for every 10 wands shipped, you must order 10 Move bundles and 10 PS3s. Since these are also items that will eventually sell, they go ahead and place the order to get what they need now- the wands. This does cause a glut of other products, which are also not returnable while the quota is in effect, since they would be negative values, and thus, lower the number of what they need being shipped.

There is one thing that the store should do, though: verify that the inventory in their own system is correct. If there was a missing purchase order (generated by regional warehouse) at the store level, the warehouse may think they have fewer systems, and thus, need more. (Usually this is a problem in reverse with restocking not happening from theft.) Otherwise, there's not much that can be done at the store level. They can make a request to not have any more shipped for a while, but the automation of the system means this will usually be ignored. Some chains may allow a district or regional manager to request a stop shipment, but this usually takes a drastic action. (I've seen this once in retail- our district manager saw that our stockroom was nothing more than a walking aisle from the backstock, and 16,000 more units were due in tomorrow morning.)

So it's not as simple as some would like it to be. And before anyone starts saying anything, I have seen all of these in my time with retail. I'm guessing it's the quota problem that's striking; it's been the reason behind almost every single overstocked item I've seen...

Even tought as you said, the retailer (corporation) decided to accept the deal, it's not like Sony force them to accept, they just put a condition to a product (if this really happened in this case is another thing... and in Brazil this kind of bussiness model is mostly forbidden) and if the retailer accept they must have their reasons...

Blaming Sony to overstuffing when it can be a bad bussiness decision of your CEO or lack of pro-activity of the Manager is silly... Sony don't send them without ordering... so in the end is GS fault if they have overstock, not Sony... they will just work to send as many as possible... and Sony as japanese company works on demand model inside, little stocks...

In japan storage can be really expensive, so suplly is a really important issue, some american corporation still didn't learn it and get tossed around in world markets (Automanufacturer a great example of ass-whooping).

The GS Corp. can stop to buy products any time it wants, maybe they have something called a contract, and if breached will ensue a Law Suit... but again it's their fault if it's a bad decision - sony is no loan shark or drug dealler to force things... GS just thinks it's a good decision to buy like this because large supplies usually have better discounts and lower shipping fees...

And as you said... in the end all sells (in Brazil during inflation times, supllie were a great way to make money)

Oh, I'm not trying to blame Sony, rather, I'm referring to all those who say it's the store's fault. No, I will say that corporate is at fault here, either for just being asinine, or reluctantly accepting excess systems to get other items they need. Of course, other people have mentioned other plausible actions, such as consignment or an extra bulk deal. Not being privy to Gamestop's inner workings means I can do nothing more than speculate, though...


Makes plausable sense.



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DonFerrari on 05 December 2010
dunno001 said:
DonFerrari said:
dunno001 said:

Wow, there's quite a few people in this thread who don't know how corporate retail works. Sure, smaller stores (ie, not part of a large chain) have more direct control over what they order, and other industries (like fast food) also have more control at a store level. But a company like Gamestop or Best Buy doesn't work like this at a store.

For a large store, orders are placed somewhere in the corporate ladder. (Usually, this is at a regional warehouse.) This warehouse then ships out to the stores for replenishment. Now, though, is when things tend to get tricky. A product that is in abundance in a warehouse will frequently be told to move it out to make space for more stuff coming in- by getting more to stores, it facilitates a possible store-level promotion to remove stock at their end, or a larger company promotion. (Suffice it to say, if this supply has been growing since September, it's not for a promotion.) Also, if a warehouse has excess stock that it ships out, it will also tend to scale orders back... if it can.

What, "if"? Yes, there are times when companies institute "quota sales" on items. Standalone Move wands are in short supply in many areas. However, Sony may be setting a ratio on this item- for every 10 wands shipped, you must order 10 Move bundles and 10 PS3s. Since these are also items that will eventually sell, they go ahead and place the order to get what they need now- the wands. This does cause a glut of other products, which are also not returnable while the quota is in effect, since they would be negative values, and thus, lower the number of what they need being shipped.

There is one thing that the store should do, though: verify that the inventory in their own system is correct. If there was a missing purchase order (generated by regional warehouse) at the store level, the warehouse may think they have fewer systems, and thus, need more. (Usually this is a problem in reverse with restocking not happening from theft.) Otherwise, there's not much that can be done at the store level. They can make a request to not have any more shipped for a while, but the automation of the system means this will usually be ignored. Some chains may allow a district or regional manager to request a stop shipment, but this usually takes a drastic action. (I've seen this once in retail- our district manager saw that our stockroom was nothing more than a walking aisle from the backstock, and 16,000 more units were due in tomorrow morning.)

So it's not as simple as some would like it to be. And before anyone starts saying anything, I have seen all of these in my time with retail. I'm guessing it's the quota problem that's striking; it's been the reason behind almost every single overstocked item I've seen...

Even tought as you said, the retailer (corporation) decided to accept the deal, it's not like Sony force them to accept, they just put a condition to a product (if this really happened in this case is another thing... and in Brazil this kind of bussiness model is mostly forbidden) and if the retailer accept they must have their reasons...

Blaming Sony to overstuffing when it can be a bad bussiness decision of your CEO or lack of pro-activity of the Manager is silly... Sony don't send them without ordering... so in the end is GS fault if they have overstock, not Sony... they will just work to send as many as possible... and Sony as japanese company works on demand model inside, little stocks...

In japan storage can be really expensive, so suplly is a really important issue, some american corporation still didn't learn it and get tossed around in world markets (Automanufacturer a great example of ass-whooping).

The GS Corp. can stop to buy products any time it wants, maybe they have something called a contract, and if breached will ensue a Law Suit... but again it's their fault if it's a bad decision - sony is no loan shark or drug dealler to force things... GS just thinks it's a good decision to buy like this because large supplies usually have better discounts and lower shipping fees...

And as you said... in the end all sells (in Brazil during inflation times, supllie were a great way to make money)

Oh, I'm not trying to blame Sony, rather, I'm referring to all those who say it's the store's fault. No, I will say that corporate is at fault here, either for just being asinine, or reluctantly accepting excess systems to get other items they need. Of course, other people have mentioned other plausible actions, such as consignment or an extra bulk deal. Not being privy to Gamestop's inner workings means I can do nothing more than speculate, though...

I didn't said the Sony were fault from you... more from OP...

Your point i understood and agreed... this is the problem in anedoctal evidence... a person is a Jr. Stockist trying to blame Sony for overstuffing when is their Board of Directors responsible for company actions not Sony... unless of course KB is VP of GS also...



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Mummelmann on 05 December 2010

A store has a stack of PS3's = Sony is stuffing the channel. Anecdotal evidence is so much fun!

Stores around here have piles of every console and bundle imagineable, despite massive ad campaigns, the consoles just aren't moving at a fast enough pace and many stores are resorting to 24 hours price cuts and local special offers to get rid of them. I'm not surprised that there would be more PS3's in a store in December in the US or UK; the numbers on the frontpage would suggest the same. Its actually very logical, the 360 and Wii move a lot more hardware in the US, simple as that.

A pile of PS3's in a store is not proof that Sony stuffs the channel on purpose though, it could rather be a case of companies and store chains misjudging the market and demand. Same thing recently happened here in Norway, stores bought mountains of iPad's but they're stuck with massive mounds of them on shelves since they're moving slower than anyone expected here.



dharh on 05 December 2010

Two things.

1) PS3 may be overstuffing. In then end, despite the fact that the regional stores don't get much say in recieve too many of whatever system, ultimately PS3 can't ship to companies that refuse to buy them.

2) It's better than the opposite. Which is not having enough stock. X360 shipments are _not_ meeting demand, which means lost sales.

Eventually things will even out. MS might miss the boat a little in fullfulling all potential demand. SONY will eventually have to slow down shipment.

In other words. Meh.



A warrior keeps death on the mind from the moment of their first breath to the moment of their last.
theprof00 on 05 December 2010

>channel stuffing
>christmas

 

...yeah



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Spankey on 05 December 2010

hmm...my memory must be failing.

I seem to remember the PS3 having supply constraint issues last year this quarter in the US ( i could be wrong though and I'm not going to necro the old threads just for this)?

Stands to reason stores would have more this year imo.



Proud Sony Rear Admiral

Darth Tigris on 06 December 2010
ils411 said:
snfr said:
Machiavellian said:
snfr said:

It's so sad that some people still believe that Sony can force retailers to take PS3s... It's nonsense (unless you're living in bizarro world).

What a lot of people do not understand is that retail agreements can be complicated.  First is that all stock a big chain like gamestop gets doesn't have to be paid by the retailer.  GameStop can have an agreement to purchase a certain amount of stock but Sony can ship more if they want.  If GameStop bought a lot of stock and do not sell it, they can send it back to the manufacture for a refund.  This is why shipped numbers do not mean that Sony or even MS sold that much to retailer since overshipped product can be sent back.

To be honest, I'm not an expert. But does sending products back actually make sense? Wouldn't it make more sense to keep these things in stock, sell it over time and not ordering new units of that product at the same time? I mean, shipping costs could be reduced by doing that.

Anyway, some people seem to think that Sony can easily ship millions and millions of units without any retailer wanting them, and that is just nonsense.

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???



ils411 on 06 December 2010
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



whatever on 06 December 2010

Well, I guess we wait to see if any retailers decide to slash prices in January (outside of an official Sony pricecut), that would be an indication of over shipping.

I'm guessing Sony is just waiting to get through the holiday period and we'll see a pricecut in Feb.-Mar. timeframe.  If production is really getting much higher, then the cost per unit will go down enough to justify a pricecut.



heruamon on 06 December 2010

Huh?   Retailers would not carry a console if they didn't think they could move it out.



"...You can't kill ideas with a sword, and you can't sink belief structures with a broadside. You defeat them by making them change..."

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