business model?

Some people are so haughty on here, gees…obviously not everyone is using their genius for good . Down fellas…take a smoke break from the sarcasm. The idea is to encourage a learning atmosphere to fight ignornance, not step all people’s toes/pride… in many cases it’s hard enough to subject yourself to the world’s opinion on what you’re asking. Just play nice…

Now that I’ve upset our mentally superior… had a sales question of my own. From what I read, there are only certain things a state can regulate the price on yes? From a business POV… how smart or stupid would it be open a “clone-type” store (as in Kmart’s goods vs Walmart’s) and sell things far below price banking on the idea that since their prices are so low, people would be more inclined to shop there off-setting the discount prices this store offers? Is that just too much risk involved? I’ve always thought if you had the right product that this method could work quite well… but maybe that just shows how much I should never manage a business though :smiley:

You’re overlooking one small detail. If you sell goods at a price below what Wal-Mart charges, you’ll LOSE MONEY. In fact, unless you have enormous volume over which to spread your fixed costs, even if you sell goods at prices substantially above those of Wal-Mart you’ll LOSE MONEY.

By the way, states can regulate the price of anything and everything. Thankfully they still CHOOSE not to regulate the price of most items, including virtually all common consumer goods sold at K-Mart and Wal-Mart. I assure you, if you try to underprice Wal-Mart, state regulation will be the least of your problems.

The more stock you buy, the bigger the discount you can negotiate with your supplier. Stores like Wal-Mart buy stock in very large volumes, and this is how they are able to retail at such low prices.

For someone starting a business from scratch, my guess is that you would have to sell below cost to undercut Wal-Mart. In other words, unless you are a millionaire to begin with, you would be out of cash and out of business pretty quickly.

There’s an old joke that regained currency when all the dot-coms were failing.

An accountant is going over a company’s books with the CEO.

“Your prices are incredibly low,” says the accountant. “How can you possibly make a profit that way?”

“Oh, we lose money on every unit we sell,” says the CEO brightly. “But we make up by selling in volume!”

thanks fellas, I appreciate the clarification. :)… Your joke wumpus sounds like it was made in my mind, haha… Gladly I don’t do business myself .