smoe.org mailing lists
ivan@stellysee.de
From | "josh chasin" <jchasin@nyc.rr.com> |
Subject | Re: Best Buy/The Thorns |
Date | Tue, 20 May 2003 15:54:44 -0400 |
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Maybe you should get a bunch from Best Buy...
Seriously; I' getting mine from Not Lame.
----- Original Message -----
From: "Not Lame" <popmusic@notlame.com>
To: <audities@smoe.org>
Sent: Tuesday, May 20, 2003 3:32 PM
Subject: Best Buy/The Thorns
> > So I see this week they are offering The Thorns for $7.99.
> >
> > Is this practice less offensive when it has the potential to bring
exposure
> > to the kind of music we enjoy talking about here? Admittedly, The
Thorns is
> > a little MOR, but if it is a modestly sucessful seller, could this
result in
> > the domestic release of Sweet's Kimi Ga Suki (which today would cost me
$32
> > to own...)?
>
> To make it official in terms of a more 'local' impact on Best Buy to this
> list and the absolute insanity and borderline illegal methods, Not Lame's
> cost on this cd is:
>
> $8.35
>
> Lovely, huh?
>
> Generally, retailers have to have a gross margin between 30-40% on
releases
> to keep in step w/ covering all the overhead a store has....rent(which is
> significant for most), salaries and taxes(ditto but 'times' 5!), web site,
> merchandising, marketing, phones, on and on......
>
> You have to pick and choose which *type*of releases you'll squeeze on a
> higher end of your desired gross margins and attach them the type of terms
> you receive from your various suppliers(net 30, net 15, consigned,
COD--each
> one is different......). We tend to push a higher gross margin a release
on
> a cd that has tighter, more restrictive terms to recoup some of the risk
and
> straing on cash flow and resources. But then again, that's not the case a
> lot of times, especially on the few major label poppy type of releases
that
> we carry where we have to wrestle w/ online retailers that are pretty much
> selling at cost, as well. (well, less so recently w/ the amazons and
> cdnow's of the world)
>
> More than you may need or want to know, but it's a big issue what places
> like Best Buy do as they undercut, literally the knees, smaller retailers.
> Are killing them......it's very real the stores that have gone of business
> because of such tactics over the years. And continue every week, across
the
> USA. If you talk to any major distributor sales manager(steve schnee,
care
> to comment), they will confirm these trends in a very empirical fashion.
>
> More: For large music retailers, when selling Dixie Chicks(or maybe not
> now...for the record, I find what happened to them to incredibly
> hypocritical.....all they did was voice an opinion albeit a poorly framed
> one.....), 50 Cent, Celine Dion........(we don't carry mass marketed
music,
> as most of you know, I would hope), they sell these types of releases on a
> lower margin for a variety reasons. There's a lot of competition on price
> w/ such releases, so to remain competitive, they'll sell a release that
they
> know they can at least do a lot of volume on for, say, a 20% margin(or
> less). But guess what? Sell enough of those at that kind of margin, you
> will be out of business, because you are not making money, only barely, if
> at all, covering your overhead.
>
> I'm tend to be moderately conservative when it comes to a lot of things,
> actually(there are plenty of exceptions, though).....and when it comes to
> government regulation on controlling business and markets, that is the
case.
> But, there are exceptions.
>
> While I have obviously have some (very, very small)stake in such
> intervention on Best Buy's tactics as it relates to my own business, the
> simple fact is that what they are doing is *wrong* and should not be
> allowable and since they will not self-regulate(and others as well),
> something needs to be done, whether it's a class-action or whatever. I
> would gladly participate in such an action, for the record.
>
> Bruce @ Not Lame
>
>
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