Date: Fri, 27 Jun 2008 11:45:26 -0400
From: Ted White <twhite8 at cox.net>
To: WSFA members <WSFAlist at KeithLynch.net>
Subject: [WSFA] Re: Olssons Sale ends Friday
Reply-To: WSFA members <WSFAlist at KeithLynch.net>

dicconf wrote:

>  On Tue, 24 Jun 2008, Keith F. Lynch wrote:
>
> > "Michael Walsh" <mjw at press.jhu.edu> wrote:
> >
> >> "Last 4 Days!  The Entire Penn Quarter Store closes this Friday.
> >>  Everything 60-75% off in the Penn Quarter store only." I
> >> wouldn't be surprised if they're moving some inventory in from
> >> other stores, just to try to get rid of it.
> >
> > If retail margins are as tight as everyone claims, I've never
> > understood why stores have 60-75% off sales rather than just moving
> >  their inventory to another store.
>
>  There are several likely reasons.
>
>  Keeping books on the shelves longer than expected counts as a
>  business cost.  If two titles each would make the same amount of
>  profit per book, but one sells at a rate of one copy a week and the
>  other sells at a rate of two copies a week, the faster-selling one
>  makes double the profit for the store owner.  Reducing the price may
>  make some of the slower-moving, unsold inventory sell.  Books that
>  sell don't have to be moved.
>
>  Moving the books adds labor cost (and gas money) to the original
>  purchase price, and requires storage once they've been moved.
>
>  Also, bookstores are taxed on their inventory.  Reducing inventory
>  means lower moving costs, lower taxes, and getting rid of the stock
>  that didn't sell at full price.
>
>  I believe they also can take off some of the original cost as losses
>  against profits, which also lowers their taxes.

Many business people believe that an item in inventory is better sold at
a loss than not sold at all.  In the latter state it takes up space and
earns nothing.  "Keep 'em moving" is the motto of many.

--Ted White