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Mike Miller wrote:
>
> So how do you manage to sell the latest thing and make a profit? Do you
> have to sell last month's model when you still have it in stock, or do
> have a contract that allows you to return parts that have become
> obsolete? This is something I have not understood about the business --
> if you keep tings in stock, don't you run a risk (a high risk, I'd
> think) of actually *losing* money?
>
Well, sure. Every business runs this risk. The negative difference can
be written off at the end of the year. The money lost on volatile
products could be recovered through either premium prices on those
products or through the returns from not-so-volatile products, or both.
That's the costs of doing business. And generally, I don't see many
product obsolescense contracts *in retail* except on software. Of
course, there are a lot of variables in play here - annual sales,
quantities bought/sold, size of business, etc.
--
MK
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