Comment by Stromgren
1 day ago
My dad worked at a logistics facility, the amount of perfume he took home was ridiculous - and you’d think that something like perfume would never go stale. It does from a brand perspective and they do everything they can to have it destroyed so it doesn’t end up being sold to prices that would hurt the perceptive value. Obviously he wasn’t allowed to take it either.
This isn't really surprising in a low margin industry. If you are making a 2% margin on the average perfume bottle, and then you liquidate it at -3% because it's cheaper than destroying it, you can accidentally end up anchoring customer perceptions on a price with like a -1% margin which actually will destroy the business over time.
High margin industries get more complicated to model, of course.
For sure high end perfumes are high margin products. Can’t be a lot of cost in producing a $100 perfume.
But I also feel like it’s a bit besides the point. Seeing pallet after pallet of perfumes getting destroyed every month should be an indication that something is not right.
Perfume? Low-margin? Getting hits ranging between 50% and 85% depending on how luxury the brand is considered to be...
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