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Technology Stocks : Intel Corporation (INTC)

INTC 34.50

+2.6%

Nov 21 9:30 AM EST

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To: Amy J who wrote (130538)	3/21/2001 7:32:38 AM
From: Road Walker	Read Replies (1) of 186894

Amy, re: "I've developed the impression that Costco is a good place to get rid of extra inventory when obsoleting products or when there's excess." I can understand how you got that impression, but it's inaccurate. Costco (and for that matter Sam's Club) sell for about 10% gross margin; other retailers 25% to 40%. As a manufacturer, it's in your best interest to have retail prices for your products fairly flat accross the marketplace, so that you don't upset many of your retailers. So what many manufacturer's will do is produce a product exclusively for the warehouse clubs. It will usually have additional features or specifications slightly higher than their normal retail products, to bring up the price a bit. And the manufacturer may actually charge Costco slightly more for the product than would be normal, knowing that it will get marked up less on the retail. Keeps everybody happy. Standard retailers can compete, Costco can offer better products at great prices, the manufacturer get's a better gross margin than normal, and the consumer gets a good value because of the added features or benefits. John

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