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Originally Posted by TTSH
A simple sale? No, I think it's a bit more than just that. It's an admission of the fact that plastic guns like the Shield can be manufactured for next to nothing... and the company can still make a nice profit at historically very low prices.
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Now, thats a bit of a stretch since we dont know any cost's......
<Thoughts continued below>
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Originally Posted by Arik
It's not an admission of anything. It's simply a sale. You sell more at less profit, but you sell and it actually makes more money.
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(sell more at less and MAKE more can be true if we knew COGS, but we dont. We also dont know CashOnHand (COH). Example: inventory is packed....we already made our profits for this year and its in the bank. <remember, we are on fiscal month #8> Clear out inventory, even at a slight loss in order to create cash flow and protect whats sitting in the bank already. LOTS of complexities
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It actually IS an admission. They admit they have ramped up and dramatically overproduced and their inventory is "out of balance"
It is impossible to create cash flow with manufacturing or inventory....only SALES create cash flow. Whether profitable or not, (debatable at this point) cash MUST keep flowing.
.....hence, a marketing gimmick
Simple terms? "Supply-and-Demand"
