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So what is the deal? If they have total control over the price, you'd think someone would have a distict price difference. Unless the current price point is really close to the wholesale cost.
Let me try to re-phrase what I've been trying to indicate all along with this title's pricing:
In this situation, where the retailers do indeed have "total control over the price", they want to maximize the potential of this product. The marketing VP's at each chain will consider both how much profit they can get for each unit, vs. the advantage of using it as a loss leader and increasing store traffic for a week or so. And that's a SEPARATE issue, my friends, then the issue of what the everyday price will be after the week-of-release sale price!
As was stated by another poster, they will start with their wholesale cost. As you imagine, Best Buy will pay a lot less than will, say, Turtle's Music (a regional chain of music/video retail stores in the southeast USA; I didn't intend everyone to know the name...but they're a great example of a chain that will purchase in less volume than Best Buy will).
BB will get volume discounts that a smaller chain like Turtle's cannot get. They may get a higher volume than Circuit City will, since BB has to supply Suncoast and Sam Goody stores, too, among others that they own. However, Suncoast and Sam Goody won't charge as low a price as BB, since they have to pay their mall rents. But BB will probably beat CC on this one. However, Turtles will beat none of the big chains on price, unless they are willing to make some huge sacrifices.
But will BB beat a Target or a Wal-Mart price? Maybe; maybe not. Tg's and WM's don't stock box sets like this usually, except in small doses. WM's stocks quite a bit more than Tg's, but nowhere near BB levels. Also, I don't know the store counts of each: are there more WM's and Sam's Clubs to buy for than the combined store count of BB and all their sister chains? Even so, WM might get a higher volume discount based on other Paramount titles ordered at the same time, or other considerations.
Okay, but we know that BB is pre-selling it for $99.99 with a bonus CD-ROM. Can WM beat that? Well, I just checked back with their web site, and it seems they can beat it by $1.11, though no bonus items are mentioned! Of course, I have [rant]NEVER[/rant] found WM's web prices on DVD's to be the same as the in-store prices. Often lower than the store price, sometimes they're higher, but they've NEVER matched...not even once! So what does this mean to the store price for TNG Season 1? NOTHING!
Oh, but let's go back to Sam's Club for a second. They're still not listing it on their web site. SC's only Star Trek DVD items ever have been the TNG Widescreen Films 3-pack and ST:TMP-DC (if all my initials are losing you, just ask...I assume most of you know these). So maybe it won't even be there. Even though Costco already lists it, they usually don't try to go head-to-head on a media item like this...it's just not profitable enough.
Getting back to Circuit City, Link Removed!!
This last example demonstrates how CC charges a low low price right off, for a 5-day period, to increase foot traffic and increase ancillary sales while making some of their customers associating them with great prices. Then, after that, they keep the prices high and maximize profit off of "sucker" sales to dopes who don't shop around.
Everyone else does it, really...though not as drastically. BB maintains their reputation and customer loyalty by keeping prices lower than list, but they try to balance profit on one title by marking it a bit higher than another title with a similar SRP. In other words, of three DVD's that list for $24.99, one might sell everyday for $19.99 and the others for $22.99; the cheaper one being the higher profile title. They have to sell three of the other skus to make up the lost profit on the cheaper title, but in the end they make all of their money and their customers feel happier than if they charged $20.99 for all three items.
In the end, everyone's price on TNG will be a balancing act based on each chain's philosophy as to "what's profitable". They will keep their plans pretty close-to-the-vest until the last minute.
I fully expect to see cheaper prices on this item for week of sale than the pre-order prices we're seeing now. I've been wrong before, and might be here. But don't be surprised if you see an all-out price war come street week!
Here's to hoping, anyway!
