Tuesday, December 12, 2006

Zunes ... being discounted already???

I noticed this in an email flyer I got last night ...

The Zune ... now $229.99!

Has Apple ever discounted the iPod? *

*for anything more than a retail storewide black Friday sale

I don't think the iPod has ever been discounted at retail because ... gasp ... it hasn't needed a discount to generate interest.

From a quick survey of the various office stores which I frequent for parts and supplies on a weekly basis ... only Office Depot had sold ANY since their debut.


Anonymous said...

I don't believe Apple gives retailers the flexibility to discount iPods. This could be because of high demand, but it is probably just due to low or fixed margins and pricing.

Reduced prices from retailers on the Zune may actually be coming out of the retailers’ pockets and not impacting Microsoft's profits. So, for example Office Depot could’ve bought 25,000 Zunes from Microsoft at $199 per unit and they can sell them for any price they want.

Bottom line, Microsoft hasn’t announced a new MSRP for the Zune, so at this point a sale is just a sale.

FYT said...

And that's my point actually ... retailers aren't moving them ... I don't see ANY retailer without Zune stock ... however my local Best Buy is out of all but one flavor of Nano and they have no Shuffles.

Anonymous said...

I'm not a retailed, but in my dealings with Apple in other business matters I've come to learn that retailers all get 8%, which leaves little room for sales.

Apple does sell iPods through Costco at a slight discount. I think the Nano is discounted by $20 for example. Sometimes they include free accessories or iTunes gift cards. For a while you could pick up an iPod for the normal retail price, but it included a $15 iTunes card. Sometimes you get car chargers or cases in the Costco bundles.

Typically, the type of discount as offered by OfficeMax is worked out in advance with the manufacture. The manufacture offers a discounted wholesale price if they order a certain quantity and run a promotion for a certain period of time. I was involved in some of these deals in the days when I worked for Creative pushing their MP3 players.

Anonymous said...

Apple cannot prohibit discounting (against the law) but they can offer incentives not to and short ship you if they disapprove of your selling methods - it all depends on who it is and how much leverage you have and/or how much the retailer ahs over you. Walmart & Apple acn or live without each other okay but a movie studio cannot live without walmart.

but there ways around not an out and out discount like what others often do is throw in an accessory for free or something like that.

most companies do not really have to discount ipods because they seem to pretty much sell fine at whatever price :-)

as a retailer, you do get additional discounts above & beyond the wholesale price thing through monthly/quarterly promotions etc ... so if the quarter is closing and a retailer might hit say 500,000 units, they might try to move the last 25,000 with a little more discounting and making it up with a lower wholesale price in a few weeks ... the other way is a "kickback" called co-op advertising for running ads in their circular or buying endcap space. It doesn't really cost the retailer $200,000 to have you at an endcap at 3,000 stores but that's the going price so if you have x many in stock, that is an effective discount of x amount over what you originally paid the manufacturer (you actually just deduct it from the invoice - even better :-) so yea, in one sense - you can sell it for what you want but in reality, the issue is more complex. It's like taking your first date to Chilli's - in theory, it's fine and if you're 16, it's not bad but if you're 25? :-)

And of course, if it's not selling, there's no better consumer attention getter than an actual lower of the price ...

Anonymous said...

Amazon has followed suit. Advance Sunday sale flyers indicate other retailers will offer discounts this coming weekend.