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> However, the margins are so low at that price that they cannot afford to sell in bulk Typically, ordering in bulk is how you _support_ low margins, by amorti
by jldugger 8y ago
> However, the margins are so low at that price that they cannot afford to sell in bulk
Typically, ordering in bulk is how you _support_ low margins, by amortizing all the various fixed overheads. What I suspect you mean is 'the margins are negative, and we're hoping to make it up via attach rate.'
- simonh 8y agoI don't think they're planning to make it up at all. I think the point is to make the entry price for beginners and people on low income as affordable as possible. I think people here complaining they can't order them in bulk at $5 or assuming there's some clever business scheme behind it all are kind of missing the point. BTW has anyone here found the 'introduction video' Techcrunch mentions in the article, that they say makes such a good case for the store? The only one I can find is the music video one that really doesn't make a case for anything. Unless that's the one they mean? Confused.
- fnord123 8y agoI think they misspoke. I think they didn't mean bulk but really "retail" or "commercially". i.e. small number of units to large number of customers vs. large number of units to small number of customers.
- oliwarner 8y agoIndeed. It's a loss-leader. The aim is to pull in real people with single sales, both to grow their community and support further sales down the line of more powerful hardware. Bulk selling these to industry for [near]-disposable application doesn't help the organisation or its aims. It also forces them up another rung of production capacity and warehousing, which is a serious expense.