Cutting Room: Carphone’s grey question

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To ‘sell’ 67,000 units into the grey market, from an original order of 130,000 Nokia 5530s, exposes either a wildly flawed sales forecast or an underhand strategy to secure an(other) exclusive at the expense of a rival.

For in the latter instance, it could – and successfully has – offloaded a huge stock holding at miniscule profit. Carphone would have made decent money on the boxes it shifted through its own UK sales channels, in part because of the knockdown price it obtained from the original purchase order.

More impressively, the six-week exclusive it secured from Nokia by agreeing to such volume stopped Phones 4U, most importantly, from selling the device. It can be argued the Nokia 5530 met no unique demand in the market, and therefore Carphone’s rivals coped decently without it.

However, the theory of it is apparently a negative tactic employed to hold up others as much as it is to break new ground. And what if Carphone had shifted excess inventory of a more iconic device, say, whose premium might feasibly have seen supply outrun demand, whilst at the same time robbing a competitor of a niche product?

Full article in Mobile News issue 451 (November 2, 2009).

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