

How does that work? They're out a lot of money. We've had situations where they send a replacement, and will say "don't bother returning the defective item", but I don't think I've ever heard of someone saying "just keep that $3,000 item, it's on us". You've got to wonder what the profit model is, if they can afford to do that.She came back and said my return was approved. $3300 refunded. I don't have to return the unit, but I have to get rid of it because I don't trust it.
Of course you did.I worked at Service Merchandise back in the late 80's
So writing off the full $3000 is better? It's like the old saying where someone is losing $1 / item and is asked how they plan to make up for the loss? And the answer is volume!I worked at Service Merchandise back in the late 80's, and some of the defective products that we'd get had instructions from the manufacturers to discard/destroy. By the time you ship it back to them and add that cost along with the cost for them to either repair or ship back to the factory to be refurbished, they can's make enough money for it to be worth their while.
Generac probably expects to make $700 profit off of a $3000 generator. That disappears quickly with all of that handling for a return.
They probably offered free dougnuts as as a perk.Of course you did.
It was shortly after high school. I was hired to sell electronics before they were done with construction. They put me to work in the warehouse to help build displays and stock the sales floor before they were open for business. Then they had me work both electronics and the warehouse. One of the things I was in charge of was dealing with damaged and defective merchandise. A lot of stuff went back the the manufacturer, but some stuff we were supposed to destroy or just throw away because it was more costly for the manufacturers to fix.Of course you did.
No. I was young and didn't know how to negotiate.They probably offered free dougnuts as as a perk.
I don't know what kind of a mark-up they have on those things, but common retail pricing is called keystone and it's pretty typical. If a retailer sells something for $3000, they probably bought it from the manufacturer for $1500. The manufacturer probably paid $750 to make it and expected to make $750 for their profit. With all of that handling, their $750 profit disappears very quickly for a repair.So writing off the full $3000 is better? It's like the old saying where someone is losing $1 / item and is asked how they plan to make up for the loss? And the answer is volume!
It just seems strange to accept a writeoff/loss of $3000 even though the cost of return would definitely eat away at the profit margin. I guess they must have the $3000 cost worked into the price to make it not hurt the bottom line.I don't know what kind of a mark-up they have on those things, but common retail pricing is called keystone and it's pretty typical. If a retailer sells something for $3000, they probably bought it from the manufacturer for $1500. The manufacturer probably paid $750 to make it and expected to make $750 for their profit. With all of that handling, their $750 profit disappears very quickly for a repair.
Everything doesn't use that model. Jewelry for instance can have a 300% mark-up. I think it's because they don't sell a lot of volume and still need to pay their staff and overhead.
Manufacturer out $750 for cost as well + overhead.The manufacturer was only expecting to make $750.
But they could likely disassemble it for parts or raw materials.It's probably more expensive for them to fix than they would make, so it's a write-off at that point,