Austin wrote:
On 09/24/2003 04:50:40 PM, Rolf Pedersen wrote:
It seems to me the capital investment required to produce and distribute large international inventories of boxed sets is probably not within the current means of such a tightly-budgeted, government-auditted company, working to get back in the black.
But they are already making the boxed sets, and I'm sure that some will make their way to Canada/US... the problem (in my eyes) is that the large consumer chains don't carry them. Geeks like me order online or join the club, but Joe non-linux-user buys his games and his printer cartridges at Best Buy or Future Shop. He doesn't have linux, but he's heard that it's cool, and he has a VISA Gold card in his pocket. This is the type of revenue that would not be tapped any other way... he doesn't shop online, he's never heard of the club, and his linux purchase was not premeditated. I remind you that Canadians/Americans love to buy things... we're trained from birth.
Austin
Making boxed sets for the store is one level of capital investment and risk. The risk is, if you don't sell them, you lose your investment. As the shareholders newsletter said, selling from the store is higher margin. The return on a fixed production/distribution investment is greater. The demand for production is less and you can, probably, be more flexible/invest less money in a produce-as-needed strategy. The distribution cost is prepaid and as-needed.
I don't know the mechanics of getting product distributed worldwide but there must be vastly more man-hours involved in making wholesale arrangements with various and sundry resellers in many cities in many countries, arranging and paying for shipping, etc. Maybe Mandrake has to eat unsold product, I don't know. Maybe there is an order-of-magnitude greater capital outlay required to build and sustain the brick-and-mortar distribution channel. Maybe two. The online store is the leaner, higher-margin channel. The times call for frugality.
Anyway, Mandrake has sold in stores before, maybe they will again, when cash is more plentiful. I am confident they are making prudent decisions, not acting out of ignorance of the market.
Rolf
