Does anyone here know what the profit margins are like when you buy music, games, etc from retailers? I know a friend working at a certain record company who can buy original CDs made by that company at an employee’s discount - something like GBPÂ£5 or USD$7 per CD. Of course its got labels ‘Promotional CD - not for resale’ stuck all over it but the music is exactly the same.
I think even this promotional copy has a small profit margin built into it, maybe 10-25%. The bottom line is that the employees want it - regardless if it is a promotional copy or not - so might as well make a profit out of them as well because wherever there is a will, there are profits to be made.
Considering that you then buy essentially the same CD from a retailer (if you weren’t an employee), it may cost you a ‘discounted’ price of say Â£20. That is something like a 300% profit margin. For hot new games, it can be about Â£40.
Of course it is hard to say exactly what the margins are like unless you do the accounting work in those software/record companies, but is anyone here clued up on such info? I am just trying to put a measure on how badly we are being suckered by ‘special discounts’, for example.