Quote:
Originally Posted by ezzkmo
Well that and not wanting to pay to manufacture tens of thousands and have them just sit and collect dust either. I feel like the first run is always limited to "test" the waters and see how many actually get ordered.
Remember the Fire Phone? Yeah me either.
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Yeah everyone pretends its a conspiracy to run out early, but its also basic math. Say your margin is 30% on a hundred dollar device,
If you have one more in inventory than you can sell you lose $70. If you have one too few you lose a sale and it costs $30. Its cheaper to be under stocked.
This is overly simplistic, but writedowns like the fire phone are expensive. Shortages on hot products can be made up with later deliveries as long as demand doesn't disappear. Which it doesn't, a hot product in short supply becomes even more attractive.