Hypothetical example:
Say there’s a walmart and a k-mart next to each other. One week, K-mart decides to sell widgets at half off the retail price as a promotional thing to get people in the store - but for actual sales purposes, these half priced widgets will actually cause them to lose money.
Can someone working for walmart come in, buy up these widgets, and resell them in their store? They’d both be causing a competitor to lose money, and be getting a cheap product themselves… is this legal?
Barring some oddity in walmart’s contractual arrangements with the widget maker, why might it be illegal?
Maybe someone would consider it to be unethical, but it’s not illegal. But most stores wouldn’t do it as you’ve laid it out, because it likely costs Wal-Mart less money to buy the widgets from their distributor than it would to buy the widgets from K-Mart at their regular price (which, of course, would be marked up quite a bit). Now, it’s true that Wal-Mart would succeed in removing the widgets from K-Mart’s inventory, but in order to recoup their cost they’d have to charge more - K-Mart could likely just order more from their own distributor.
Well, Dan, I was hypothetically thinking if they were priced so low they’d be sold at roughly what a distributor would sell them as - but I’m not knowledgable on this subject, so I guess half off wouldn’t be near the distributor price?
Isn’t this the same as the grey market? buying products from someone other than the producer/wholesaler. I think that the produced would be a bit annoyed about this.
A local supermarket used to do this kind thing on a Wednesday night - they would sell something at well below cost eg tinned peas at 10p/can but they started to put a limit on the number of items that you could purchase as local corner shops were buying them by the caseload and selling them for way more than that.
Most times, with “super-promo specials”, there is a limit on the number you can purchase (i.e limit of 5 per customer). There are many reasons for this, but one of them would be to prevent such a scenario.