States probibit sales below cost

[jake75]

In Milwaukee, the Journal-Sentinel reports that Walmart, which has launched a national promotion of nine-dollar back-to-school specials, won’t be able to offer those specials in Wisconsin, Alabama, Hawaii and Oklahoma – the four states in the union that prohibit selling anything below cost.I once heard that Wisconsin has such a law covering gasoline but didn't realize it was on everything.In regard to auto sales, I guess it is a matter of deciding how to allocate overhead costs. Aside from high profile targets like Walmart I'd bet enforcement is nonexistent.

[808 Vibes]

Sellingbelow cost? I didn't think stores do that-not here anyway when you figure they markup even more because of shipping-unless they're closing down and have "75% off all merchandise" or "After season" clearance. Earlier this year, wallyworld still had many huge cartons of rolls of Xmas wrapping paper, and at the end, sold the rolls for 25 cents each. We pay big bucks for each item everywhere, so we live for those kinds of deals, and we know that is when you buy such things-to stock up for next year. When Harget came, oh the hype, hype, hype!! Like it was going to be our low price savior or something. But I really don't see any difference in prices. It's in my zip code, but I very rarely go, and if I do it's only for one item-they are the only place I know that has my Omega 3 nutrition bars in a box; other places only sell them individually...more expensive that way. I know a lady who is originally from here and moved to VA. She visited family last month and "forgot" how expensive everything is here...she got a bad case of sticker shock. Oh yeah..some of the "advertised specials" we get in the newspaper, or get emailed if you sign up for coupons and sale alerts, then you read the fine print... will say "not available in AK & HI, GU, PR..."Booooo!

[jake75]

"Shipping" is a part of "cost". Anyway, since 90% of what you see at Walmart and Target is from China, and HI is closer to China than the mainland you would think the shipping would be less.

[star_deceiver]

Shipping to Hawaii from China would be more because they'd ship it to the mainland then re-ship it out to the Island

[808 Vibes]

That doesn't make sense, so you can almost bet that's what they do!

[Tubaryan12]

The reason these laws are in force is to stop much larger companies from driving smaller companies out of business. Having "loss leaders" is a way to drive more customers into your store and keep them from other stores. This strategy is employed because, simply, it works.

[zionzr2]

Quote, originally posted by Tubaryan12 »The reason these laws are in force is to stop much larger companies from driving smaller companies out of business. Having "loss leaders" is a way to drive more customers into your store and keep them from other stores. This strategy is employed because, simply, it works.At the cost of the consumer!

[audiovibe]

Quote, originally posted by HawaiiPontiacLover »Sellingbelow cost? Quote, originally posted by Tubaryan12 »The reason these laws are in force is to stop much larger companies from driving smaller companies out of business. Having "loss leaders" is a way to drive more customers into your store and keep them from other stores. This strategy is employed because, simply, it works.FWIW the mighty W-M sells roughly 50%-60% of their stock under their cost, they make it up in the volume of high demand items they move, The strange part is most of the stock that isn't sold under cost is only $0.05-$0.10 over cost.Aron

[jake75]

Quote, originally posted by audiovibe »FWIW the mighty W-M sells roughly 50%-60% of their stock under their cost, they make it up in the volume of high demand items they move, The strange part is most of the stock that isn't sold under cost is only $0.05-$0.10 over cost.Aron1. Don't believe everything you read on the internet.2. "Cost" is an elusive definition - is it what Walmart pays their supplier? Does it include all overhead such as advertising, interest, taxes, depreciation, etc.? Gross margin is usually defined as sales less cost of goods. Then the overheads come off of that. You might have a gross margin of 20% overall, but all expenses of 18% leaving 2% of gross as "profit".No time to research - but I'd bet their SEC filings show these numbers for Walmart and other retailers.

[audiovibe]

Just reading from the cost basis sheets showing inventory stock at the distribution center, when I inquired on the subject that was the answer I received.Aron

[Kari]

Quote, originally posted by zionzr2 »At the cost of the consumer!That's why it pays to be a smart shopper. Personally I love the people who pay full price because they make it possible for me to get the great deals I do. If no one ever paid full price there wouldn't be any sales anymore.

[jake75]

Most recent SEC Report - Wal Mart (includes Sams Club)Gross Sales $93,471,000,000Memberships and other income 771,000,000Total Gross Income 94,242,000,000Cost of sales 70,388,000,000Gross Margin as % of sales = 25.3%

[beemerphile1]

Quote, originally posted by audiovibe »FWIW the mighty W-M sells roughly 50%-60% of their stock under their cost, they make it up in the volume of high demand items they move, The strange part is most of the stock that isn't sold under cost is only $0.05-$0.10 over cost.AronThat reminds me of an old joke, " We lose 25 cents on every widget we sell but we make it up in volume".