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Comment by michaelt

Some companies will literally sell products for less than the cost of the components that go into them.

Sometimes that's a supermarket selling 'loss leaders' to get people into the store where they'll hopefully buy other things - or a games console manufacturer planning to make up the loss because they get paid for every game sold.

Other times a manufacturer wants to hit a promised launch date, and hopes to get manufacturing costs down later. Maybe they haven't had time to set up certain cost-saving automation, or a planned lower-cost component wasn't ready in time for launch. Maybe their widget supplier has promised a lower cost when they're ordering 10,000 a month but right now they're only ordering 500 a month.

Of course, without access to insider information we can only guess if this is really occurring...

parent michaelt 2 years ago

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