Do retailers ever stock goods just to make other goods sell better?
"There's a concept in retail called a ""loss leader"", and essentially it means that a store will sell an item intentionally at a loss as a way of bringing in business in the hope that while consumers are in the store taking advantage of the discounted item, they'll make other purchases to make up for the loss and generate an overall profit. Many times it only makes sense to carry items that enhance the value of something else the store sells.  Stores pay big money to study consumer behaviors and preferences in order to understand what items are natural fits for each other and the best ways to market them.   A good example of what you're talking about is the fact that many grocery stores carry private label products that sell for higher margins, and they'll stock them alongside the name brands that cost much more.  As a consequence (and since consumers often don't see a qualitative difference between store brands and name brands much of the time to rationalize spending more), the store's own brands sell better. I hope this helps. Good luck!" They may stock items that frame the various price points. Of course they risk having the items go stale before they are sold. You also have situations where the store will advertise an item, but end up taking a loss on that sale because it will bring people in, and they will make other purchases. Determining what to stock, how to display it, and how to advertise it involves both math and psychology. "That happens all the time. The best situation for this to happen is when you have several products, each a bit better and a bit more expensive than the other, and you add a new product which is the cheapest. That gets people into the store to look at the cheapest product, and then you show the the next more expensive which is so much better for only a little more money, and the next more expensive which is again so much better... You might not sell any of the cheapest product but it helps you sell the others.  Also happens the other way round: You add a really expensive item, unaffordable for most customers, that is really, really nice. Then customers look at it and you show them that for half the price they can have something that is almost as nice. The expensive product increases the amount that customers think is ""the right price"" for that kind of product. A customer might think that $2,000 for a diamond ring is an awful lot of money, but if you show them another ring for $5,000 then suddenly the $2,000 doesn't look that expensive anymore. And if it is almost as nice as the $5,000 ring, you sell a lot of rings for $2,000 because you had the more expensive ring in the store." Use of this is demonstrated in this video: https://youtu.be/Ip5jG3djdyk Stocking products that you have no intention of selling can be used to make other products look more appealing by comparison. It's more psychological than anything but it isn't an uncommon practice.
Why do people buy them when they would be cheap to make for themselves? Convenience. While you could easily find some pictures and lay them out with a sentiment, buy some card stock, print in colour, trim it, and perhaps glue on some glitter or whatnot, and then find an envelope that fits it, it's likely to take you an hour or more to do so. And you'll invest far more than $6 on your printer and various inventories. I made cards for my kids- we had construction paper, glitter, coloured markers etc and there was no need for an envelope. But most people will find it quicker and simpler to buy one fully assembled. The cost of the online ones is weird I agree. Perhaps people are also not confident they can compose a good greeting? Why do stores stock $6 cards that they buy for $3 (retail markup is 50-100% and I'm sure it's closer to 100% for cards) when a different supplier might provide them for $2? Well, even if such a supplier existed, I'm sure the store would be happy to sell for $6 still (see: people buy them) so there would be no consumer impact. A store that sells cards for $5 isn't going to siphon customers from elsewhere because most of us just don't buy cards often enough for it to matter.  Why does nobody become that supplier who will sell them cheaper? Selling stuff is more expensive than making stuff, and getting your product into retail stores is hard. Hard means time and time means money and all of that contributes more to the card price than the ink and paper do. That said, dollar stores sell cards, for a dollar typically, and people do buy them. I find they have less colours and the artwork is cruder. Perhaps you even get what you pay for when it comes to design, layout, printing etc. *Target - All We Have to Do is Be Better Than Walmart!*  I'm sure having better paid, less miserable employees is good for business. Hopefully other large retailers will follow Target's example. The same strategy seems to have served Costco well. "You may look into covered calls.  In short, selling the option instead of buying it ... playing the house.   One can do this on the ""buying side"" too, e.g. let's say you like company XYZ.  If you sell the put, and it goes up, you make money.  If XYZ goes down by expiration, you still made the money on the put, and now own the stock - the one you like, at a lower price.  Now, you can immediately sell calls on XYZ.  If it doesn't go up, you make money.  If it does goes up, you get called out, and you make even more money (probably selling the call a little above current price, or where it was ""put"" to you at). The greatest risk is very large declines, and so one needs to do some research on the company to see if they are decent -- e.g. have good earnings, not over-valued P/E, etc.  For larger declines, one has to sell the call further out.  Note there are now stocks that have weekly options as well as monthly options.  You just have to calculate the rate of return you will get, realizing that underneath the first put, you need enough money available should the stock be ""put"" to you.   An additional, associated strategy, is starting by selling the put at a higher than current market limit price.  Then, over a couple days, generally lowering the limit, if it isn't reached in the stock's fluctuation.  I.e. if the stock drops in the next few days, you might sell the put on a dip.   Same deal if the stock finally is ""put"" to you.  Then you can start by selling the call at a higher limit price, gradually bringing it down if you aren't successful -- i.e. the stock doesn't reach it on an upswing. My friend is highly successful with this strategy. Good luck" "I used to be in research department for big financial data company.   Tell your son that there are three factors: Most people think that net sales vs. expectations is the only factor.  It might not even be the biggest.  It is simply how much money did company make.  Note that this is not how many units they sold.  For most companies they will have adjustable pricing and incentives in their sector.  For example let's talk about a new company selling Superman Kid's Bikes (with a cape the flips out when you hit a certain speed).  The company has it in Walmart at one price, Target at another, Toys R' Us even cheaper, Amazon (making more profit there), and other stores.  They are doing ""OK"" come Dec. 1 but holiday season being half way over they slash price from $100 to $80 because they have tons of inventory.  What are looking at her is how much money did they make.  Note that marketing, advertising, legal (setting up contracts) are a bit fixed. In my opinion consumer sentiment is the #1 thing for a company that sells a product.  Incredible consumer sentiment is like millions of dollars in free advertising.  So let's say Dec. 15th comes and the reviews on the Superman Bike are through the roof.  Every loves it, no major defects.  Company can't even supply the retailers now because after slashing the price it became a great buy.  A common investor might be pissed that some dummy at the company slashed the prices so they could have had a much better profit margin, but at the same time it wouldn't have led to an onslaught of sales and consumer sentiment. And the last area is product sell-off.  This doesn't apply to all product but most.  Some products will only have a technology shelf life, some will actually go bad or out of fashion, and even selling Superman bikes you want to get those to the store because the product is so big.  So ignoring making a profit can a company sell off inventory at or around cost.  If they can't, even if they made a profit, their risk factor goes up. So let's get back to Superman Bikes.  This is the only product company ABC has.  They had expected holiday sales at 100 million and profits at 40 million.  They ended up at 120 million and 44 million.   Let's say their stock was $20 before any information was gathered by the public (remember for most companies info is gathered daily now so this is rather simplistic).  So you might expect that the stock would rise to maybe $24 - to which if you were an investor is a great profit. However this company has a cult consumer following who are waiting for the Captain America Bike (shoots discs) and the Hulk Bike (turns green when you go fast).  Let's say consumer sentiment and projections base off that put next holiday sales at $250 million.  So maybe the company is worth $40 a share now.  But consumer sentiment is funny because not only does it effect future projections but it also effects perceived present value of company - which may have the stock trading at $60 a share (think earnings and companies like Google).  Having a company people feel proud owning or thinking is cool is also a indicator or share worth. I gave you a really good example of a very successful company selling Superman Bikes... There are just as many companies that have the opposite happening.  Imagine missing sales goals by a few million with bad consumer feedback and all of a sudden your company goes from $20 to $5 a share." But they aren't doing anything extra to sell them, but perhaps a commission on sales would be a fair reward for the best salespeople. However, the products sell themselves. They just happen to work at a place where the merchandise is expensive. I understand paying the genius bar folks more. Should people who work at Prada get paid $100,000 a year just for ringing up the items? "Yes, this is possible with some companies. When you buy shares of stock through a stock broker, the shares are kept in ""street name.""  That means that the shares are registered to the broker, not to you.  That makes it easy to sell the stock later.  The stock broker keeps track of who actually owns which shares.  The system works well, and there are legal protections in place to protect the investors' assets. You can request that your broker change the stock to your name and request a certificate from the company.  However, companies are no longer required to do this, and some won't.  Your broker will charge you a fee for this service. Alternatively, if you really only want one share for decoration, there are companies that specialize in selling shares of stock with certificates.  Two of them are giveashare.com and uniquestockgift.com, which offer one real share of stock with a stock certificate in certain popular companies.  (Note: I have no experience with either one.)  Some companies no longer issue new stock certificates; for those, these services sell you a replica stock certificate along with a real share of electronic stock.  (This is now the case for Disney and Apple.) With your stock certificate, you are an actual official stockholder, entitled to dividends and a vote at the shareholder meeting. If this is strictly an investment for you, consider the advantages of street name shares: As to your question on buying stock directly from a company and bypassing a broker altogether, see Can I buy stocks directly from a public company?" Just because it gets delisted from one of the big boards doesn't mean it can't trade over the counter.  For example GM went OTC under the ticker MTLQQ for a while.  That being said, just because the stock is trading over the counter doesn't mean it has any real long term value. By the votes it does not. A business primary goal is to return an investment to it's shareholders which anyone can be so are they are publically traded.  If you do not agree with a way a business is run ethically, do not shop not work there. They will have their work cut out for them as they compete with Amazon. Amazon distances themselves from ethical issues with sub companies and sub contractors.