Price wars: the Harry Potter Saga and a lesson in Trade

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THIS huge squabble over the price of the latest Harry Potter book the world over is absurd, if not over blown. Little do people know that the hypermarket chains are limited to several million copies each (a number to be verified) and make a considerable profit of it. Here, i save RM40 by buying it from Tesco, being a massive 1/3 saving over the rrp of RM109.90.  The publishers say the hypermarkets are losing money as the warehouse price is around RM 75 a book. (Stg 11.00 odd)

The truth is, the warehouse prices apply for most buyers I.E bookshop chains and independent bookshops, (ever watched “You’ve got mail”?). Massive bulk buyers get equally massive discounts on the retail price of up to 40-50% depending on the amount they have ordered. This works out to  a cost price of RM55-RM66. But other bookshops cannot afford to buy such quantities as they may not be able to sell them all, not to mention the cost of storing such substantial books ( imagine a thousand of these books, weighing up to 2 tonnes in a 20ft container). (Imagine how much the bigger chains are making when they sell the book at ten percent discount.)

THE lowered price of the books mask the jacked up prices of the merchandise. (at RM 7, a Chocolate Frog is not exactly cheap, but can be sold out within a few days.) The hypermarkets are banking on the sales of its Harry Potter merchandise to offset the opportunity cost it had incurred by not selling the book at at least RM89-RM99. It can be assumed the sales of consumables, play sets, costumes and other miscellaneous merchandise can exceed the profit made by the movies! Easy to dismiss this as mere hearsay (admittedly, most of it is , from reliable sources.) but it all boils down to who sells the most merchandise.

So, can I have a crate of Every-Taste Beans and a sack of Chocolate Frogs to go with the book, please?

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