Re: mobil one bulk purchase

["Linus D. Toy" <linust@interramp.com>]

At 11:24 PM 4/25/96 -0400, Burl Vibert wrote:

>I've heard that Wal-Mart sells synthetic oil at cost or even a slight loss
>just to get people in the store in hopes you buy something else at the same
>time. They have several items in the store like this. Some marketing scheme.
>I've never found Mobil1 cheaper locally.

that would be a "loss leader" but that's not really how Wal-Mart (or a few
other similarly sophistocated retailers) can "afford" to sell to you at or
below cost.  

a lot of vendors (wholesalers selling to retailers) offer trade discounts to
their major accounts--typically the 2/10-net/30 terms.  this has been around
forever and a day, so isn't anything really new, but lets the retailer earn
some good money.  (it's very similar to the car dealers selling "at invoice"
or some such gimmick--they get other monies from the manufacturer wholly
apart from their invoiced amounts.)

the *cool* stuff comes when you start playing the cash management game.
time your merchandise buys to arrive in your store just before the retail
customer takes it off the shelf (JIT concepts).  common practice is for the
vendor to invoice the retailer on shipment, allowing 30 days to pay.  but
you sold the merchandise for cash the day after it arrived, and now have 29
days to play with the money before you have to pay up.  let your imagination
run wild !!!  btw, if you're a vendor, these big retailers can really yank
your chain a bit, and make life rough.

--ldt.
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* linus toy           email:  linust@interramp.com                   *
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