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Because companies like Walmart already do this. The squeeze manufacturers hard on price, to the point manufacturers are forced to make lower cost versions of a
by delfinom 2y ago
Because companies like Walmart already do this. The squeeze manufacturers hard on price, to the point manufacturers are forced to make lower cost versions of a good under the same brand label.
Companies want the branded good because they think it will sell well, but they also don't care if the brand destroys the product. They just want the brand.
- lupire 2y agoBut they don't need to know the actual COGS, they just need to threaten to drop the vendor.
- AnthonyMouse 2y agoBut then they want the brand, so the seller gets to extract a premium for the brand even if you knew their COGS to the penny because it's actually worth that much in additional sales and they both know it. The thing where they make a worse version of the product isn't Walmart screwing the seller, it's the seller taking the short-term profit option by screwing the [Walmart] customer until the customer notices. And then the question is whether the customer notices whether the product is worse, or the customer notices that the product is worse from Walmart. Also, a lot of the store-specific SKUs aren't actually different whatsoever, they just put a different number on the box because it gets them out of MFN clauses with other retailers and the retailer likes it too because it gets them out of price match guarantees since nobody else has that SKU to match against.
- jrs235 2y agoIt's why Walmart (and all big box retailers) have different model numbers for the same brands even though the big picture specs are basically the same. Cheaper components and now they can't be priced matched, they're different models after all...