1. of course, if you've ever worked retail, you know that stores generally LOSE money on each system sold.

Since they usually pay $1-3 below thier selling price for the systems, which, after shipping means they lose money on every system sold. Retailers make this up on accessories and to a limited extent, on software.

bad PR machine! bad!

but good for Nintendo and Target, and to an extent, Breasts.

Posted at 4:26PM on Oct 3rd 2006 by .ed 2 stars

2. console systems = no profit for retailers = nothing donated

Posted at 7:02PM on Oct 3rd 2006 by curt 0 stars

3. Yep, the above comments pretty much said it before I could. At best, no more than $4 or $5 would be donated, but it depends if Target is basing the "profit" off the price THEY paid for it, or the total "cost" after shipping/shrink/storage/et al are considered.

Buying a $9 sheet of the US Postal Service's Breast Cancer Awareness semipostal will yield about the same donation amount.

It's great to see Target doing this, but the marketing benefit for this promotion will far outweigh the benefit to the Brest Cancer Research Foundation.

Posted at 7:32PM on Oct 3rd 2006 by Strike Man 0 stars

4. Its actually not as bad as your making it out to be. While Target does not make much Nintendo does make a profit and it seems no one actually read the ad. What it actually says is

"This week Target and Nintendo will donate 100% of the profits from sales of pink DS Lite hardware (a minimum of $75,000) to The Breast Cancer Research Foundation."

So its not just Target its also Nintendo thats giving up the profits from the sales.

Posted at 10:18PM on Oct 3rd 2006 by Kenban 0 stars

5. What are you guys talking about?

Retailers don't make profit on things they sell? Then why sell them? I don't understand what you guys are saying.

Posted at 10:31PM on Oct 3rd 2006 by Probot 0 stars

6. Actually, #5 is right.

Usually, 40% or more of the cost of an item is put on there by retail stores. 4 to 5 dollars of profit off a DS? Haha, that's a new one. I know this from my friend, who gets items from wholesale sources. You know that Airsoft gun you got for $20? Yeah, the stores by that crap for $5. Video games, if common sense is to be believed, would only be shanked more, seeing as how it's A) an electronic device, and B) a popular item, since everyone and their grandmother loves video games these days.

Remember - The companies who have their consoles manufactured lose money, not the ones who sell those consoles to the consumer. (Except Nintendo, of course.)

This has been Business 101, please remember your coats and hats as you leave the building.

Posted at 1:38AM on Oct 4th 2006 by Shiro 0 stars

7. I think you guys are thinking of console makers, not retailers. The whole point of retail is to turn a profit with every sale, they can't rely on people coming to them for games- Nintendo, on the other hand, can rely on someone buying at least one of their DS games, and thus don't have to make a profit on the DS. I'm not even sure if Nintendo loses money on the Lite, they certainly aren't on the Wii. Either way, I like this idea- even if there are more dangerous cancers than breast cancer.

Posted at 2:12AM on Oct 4th 2006 by Special_K 0 stars

8. wow... well i already bought my girlfriend one.. but with her showing it to just about every female she meets and making them want one i'm sure that'll help target a bit.

Posted at 4:54AM on Oct 4th 2006 by Steve 0 stars

9. You're ALL fucking stupid.

I can tell that not a SINGLE ONE of you has worked retail.

You have COST and then you have PROFIT MARGIN.

COST is what it costs the store to purchase the product from the manufacturer in order to SELL it for a profit.

COST in THIS case is what NINTENDO makes. If Target buys the system for $100 a unit, then $100 is what Nintendo makes off of Target.

Nintendo's profit margin is decided from that $100 after Nintendo deducts it's costs for:

-Manufacturing
-Employment
-Materials
-Shipping
-Misc.

After Target pays for this product, THEY make a profit margin based on what they paid for it AND what the MSRP on the product is.

In the case of the DS Lite (MSRP: $129.99), they have $30 opportunity for gross profit margin.

AFTER they deduct their AVERAGE costs from THAT...they make an average of approximately 4% to 16% profit margin from that entire $129.99.

NO they wouldn't sell it if they weren't making money on it. But they sure as hell don't make a lot.

That is why they rely mostly on VOLUME. The number of units sold.

That is why they discontinue selling something if it doesn't move enough volume.

You're all fucking stupid. Get your shit straight before you talk it.

(Note: Before you go trying to correct me, etc... I've worked retail for several years of my life. Most prominently, I was a team lead at Staples for two years. I was number one salesman in region #5 which covers most of the midwestern United States. Think TWICE about what you say before you say it. And keep in mind that the EXAMPLE that I gave you was a roughly hewn example at best. The numbers go FAR deeper and wider than THAT.)

Posted at 6:10AM on Oct 4th 2006 by Cyryl 0 stars

10. I DO give credit to Strike Man for post #3, however.

At least for his view on their publicity strategy.

He's right. Target will get FAR more attention in this venture than the Breast Cancer Research Foundation will get.

(Not that they don't get plenty of attention as it is, of course. Which is a GOOD thing.)

Posted at 6:16AM on Oct 4th 2006 by Cyryl 0 stars

11. also it's quite an assumption to make that only girls would get the pink ds!

don't be so cliche. be secure in your masculinity... come on, admit you have one!

Posted at 9:35AM on Oct 4th 2006 by jojonyc 0 stars

12. #5; Probot; idiot.
like ol boys been saying if you ever worked retail you know stores make ridiculously low amounts off these things largely because nintendo sets the price and if any place sets theirs any higher than anyone else people notice and go to walmart. thats why you see bundles too, since so little is made from the system the store has to push that cheaper product while you're already in their store.

Posted at 10:10AM on Oct 4th 2006 by iworkretail__isellweed 0 stars

13. I'm always willing to do anything that will help the cause of breasts.

Posted at 10:18AM on Oct 4th 2006 by o0joshua0o 0 stars

14. Yup, I'll buy one for my mother and girlfriend just to keep boobs around forever :P

Posted at 10:58AM on Oct 4th 2006 by Unkelski 0 stars

15. I dont care about profit margin and all this other crap.
It's a good cause regardless of the amount of money.

Posted at 11:05AM on Oct 4th 2006 by bo0 0 stars

16. uh to all those who said i was wrong... it's called a "loss leader"

...go to college.

** i am astounded by the ignorance of some of the above comments **

many items in stores are theyre to draw you in so you spend on higher profit items before you leave.

ever wonder why you have to walk deep into stores to get to the electronics section?

ever wonder why you ALWAYS have to walk past the greeting cards?!

also, if someone wants to really argue.. here's another shocking fact: Grocery stores make about 14 bucks off of a 250$ sale...


want to know more?
black friday is riddled with loss leaders: $20 dvd players get people to go to the store in hopes that people will buy DVDs, so the store can make some loot

cost for a DS is $127.94

purchasing 288 DS systems (1 pallet) you can get them for $121.80 a piece

markup on game controllers is about 85%
what i mean is if you pay 20 bucks for a controller, it cost the store $3

markup on games is avg 10-20%
(if you pay 50 bucks for a game the store usually paid about 5-10 bucks less)

markup on cables is avg 94%

markup on gaming systems is avg >1%
markup on ipods is 1%
that's why you see so many acessories at high prices...

markup on greeting cards is astronomical

i'm not wrong. and i dont benefit by telling you this, you do.

Posted at 11:27AM on Oct 4th 2006 by .ed 2 stars

17. I worked retail at a store that sold video games and systems for several years and had access to the actual cost information. Stores make NOTHING on the systems. All profit is on the accessories and games. But the markup on the accessories is HUGE its not uncommon for it to be 50% of the cost of the item. Nintendo is the ONLY console maker that makes a profit off the system as well. The xbox, xbox 360, PSP and PS3 (when its released) are all sold BELOW COST to the retail stores.

Last I checked the cost to a store for a DS was around $121 NO company in the US pays $100 or even close to it. The stores don't care because the money is in the items you need to purchase to go along with it.

Think about this there is no contract that says a store has to charge MSRP for the consoles. Why do you think that EVERYONE even online stores sell it for the same price? Because they don't want to lose money and they know they are not making ANYTHING on the sale.

Posted at 2:16PM on Oct 4th 2006 by Kenban 0 stars

18. "Stores make NOTHING on the systems."

Why would you expect the individual store to make anything? For most stores, you get everything from the distribution center. I know that's how Target works. They buy a large supply and sell by the MSRP, and make a little profit on each one, but a lot of profit on the whole. Big stores like Target make money on volume not individual units.

Target makes a profit by selling electronics, even video games. That's all I'm saying. They are saying that until Oct. 7, all profit from pink DS Lites will be donated.

Please stop pretending that jockeying a register gives you an degree in economics.

Posted at 10:08PM on Oct 4th 2006 by Probot 0 stars

19. "Why would you expect the individual store to make anything? For most stores, you get everything from the distribution center. I know that's how Target works. They buy a large supply and sell by the MSRP, and make a little profit on each one, but a lot of profit on the whole. Big stores like Target make money on volume not individual units."

Yes, when you compare the "cost" of a videogame system to the actual selling price, there is a "profit." However, as I and others have pointed out, there are far more factors which need to be taken into account when determining whether or not any profit is actually made.

I can't vouch for the exact accuracy of .ed's figures, but they're pretty damn close to the figures I have known from previous console gaming systems. The bottom line is, while a company like Nintendo may make a profit off each DS Lite system sold, the retailer makes little or no profit (and in some cases, takes a small hit). As in, if they're selling the system for only $2.05 over their cost, while that does add up to a lot of "profit" when you consider the sheer number of systems they sell, that is also cut down immensely when you factor in the operating or any other costs that is part of running a retail business.

Here's a homework assignment for you: Find a manager of a game store, be it an EBGames, GameStop, Game Crazy, a Mom & Pop shop, whatever. It doesn't matter if you speak with a store manager, district, regional, or even higher, just find someone who isn't a minimum wage "register jockey." Ask them if selling a system (Nintendo DS, XBOX 360, PS2, take your pick) on its own, without "attaching" ANY games or accessories, is practically a Cardinal sin.

Seriously. Why? Because all of those "attachments" net a far greater profit than the system they are being sold with. Trust me when I say that my local game shop made more money off the $40 copy of FIFA 07 I picked up today than they did on my $130 DS Lite. There is a reason why one of the numbers these chains crunch is a "hardware attach rate."

The error in my original post, as Kenban pointed out, is that Nintendo is also joining Target in donating any profits from those sold systems. That DOES make a difference.

Posted at 11:51PM on Oct 4th 2006 by Strike Man 0 stars