When Walmart announced that it was selling the iPhone 5 for a discount, Best Buy’s profits took an immediate hit.Ann Zimmerman And Shelly Banjo at the Wall Street Journal report Best Buy lost $65,000 worth of profits on the first day Walmart announced discounts for the iPhone 5.
Best Buy’s profits took a hit because it has a price-matching policy. When Walmart announced the discount, consumers were able to come in and get the iPhone 5 for the same price. Best Buy is not happy about this because it doesn’t think Walmart has enough iPhone 5s to meet demand. Therefore, Best Buy is filling the stock at a discount that Walmart doesn’t have.
It’s worth noting that there seems to be a mistake in Zimmerman and Banjo’s story. They say Walmart discounted the iPhone 5 to $150, when in reality it was discounted to $127. We’ve reached out to them for clarification.
Via: Sammy The Walrus IV
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