Essay: Overstocking the Retailers

Sample Essay

There are several dangers of overstocking for retailers which include decrease in demand, obsolescence of products, natural disasters, decrease in price, and negative affect on sale of other products. The decrease in demand of video games is a normal phenomenon as the media hype created by a company such as Nintendo before the launch of a video game is quite high and people flock to retailers to buy these video games but as the hype wears down the demand eventually decreases and retailers are left with piles of stock with minimum or no buyers at all.

There is no other use for video games from retailers could benefit by indirect selling. The video game industry is highly vulnerable to technological changes and new video games are launched quite rapidly so a video game is significantly affected by these changes in technology or obsolescence. If new video games are launched from other manufacturers there is a high probability that the retailers may have to waste large chunks of inventory to make room for these new video games and eventually record huge losses if they have high levels previous video game inventory which has gone obsolete.

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