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Old 07-15-2008, 08:54 AM   #23 (permalink)
skylark68
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Join Date: Sep 2006
Location: Pearland, TX
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Re: Ladies and Gentlemen, the long awaited Toyota meltdown may have begun !

Quote:
Originally Posted by PhishPhood View Post
That's because what a retailer wants you to see and wants you to consider buying are always upfront. Notice that the milk and butter and eggs and bread are always in the back corner of a supermarket. You have to walk through the high-margin junk to get to the staples that you need every day.

Walk into a department store and the first whiff that you get is ladies perfume. Bargain-priced everyday clothes are hidden on a rack in the back.

The basic staple LE Camry I4 which has an MSRP of just over $22000 but has special lease/finance rates are hidden away where the buyer has to look for them. Potentially they will bump into a $26000 XLE which they like more and get that one iso of the 'bread and butter' LE I4.

GM stores do the same. Upfront are the high margin trucks and SUVs. The row upon row of gleaming chrome-plated beauties grab the attention of the guys driving by. 'Cobalt? Oh they're over behind the building'. The local store has normally had 40-60 trucks and 20-30 SUVs up front along with 2-3 Aveo's, 2-3 HHR's, a couple of Cobalts, whatever Malibu's were unsold, 5-10 Impala's.
Those are some good points. I never thought about the high profit margin perfume being up front while discounted clothes are in the back. Likewise with the eggs and milk. That was a good analogy for the high profit SUV's and trucks being up front in a typical GM store.
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