Shocked by what I found at Target and Wal-Mart tonight...
01-03-10, 11:17 AM
#151
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I believe what happens is WM contracts with a bike company to provide them with a certain number of bikes at a certain price point, the company starts shipping their stock bikes and quickly realizes that they are losing ground on profitability due to the price point required by WM so they start using cheaper components to keep their profit margins up.
Then, WM's strategy is to come back every year and require the supplier to reduce their costs.
WM's business model is a race to the bottom. It works because the consumer thinks the only thing that distinguishes "equivalent" products is price. That is, the consumer thinks that a $100 bike is the same exact thing as a $1000 bike except the person selling the $1000 bike is ripping them off!
Last edited by njkayaker; 01-03-10 at 11:20 AM.
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kissthegoat
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