Aus,
"Instant rebates" are sometimes sponsored by the manufacturer, sometimes not. You have to have a very good negotiating team not to get nailed on that one. When you negotiate with a mass retailer, it's always a fine line situation, they have the big stick, which is going to another vendor, and subtracting millions in sales and profits from your company going forward. If there is another vendor that is willing to get market share, with a very low profit margin, then you almost have to give the discount. Thats why building consumer brand equity is so important, and why operating in a capacity constrained marketplace is so important.
As far as mail-in rebates, the response rate is generally less than 10% (% goes up as the rebate $'s go up). So spread across all sales, the discount is much less significant than an instant rebate, which gets 100% participation.
I'm thinking this will be a great quarter. Is it just my imagination, or are higher MB selling better than you projected? If true, that should be good for revenue and bottom line. Of course, forward guidance is the most important factor.
John |
