Comment by hiAndrewQuinn
1 day ago
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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