It was an example. I have no information on how much Target specifically paid, but usually it's a few cents on the dollar at most for each item. Also, we have laws that keep companies from pricing things however they want. That is why the standard for games is $60. In other countries like Japan, where they don't have laws like that, they price their games however they want.
Look, I don’t want to totally poo poo you, because you’re right in that, with regards to most wholesale retailers don’t pay a lot per item.
Electronics and specifically things like Consoles, TVs and Computers, thise wholesale discounts don’t materialize int he way you think they do. That’s not to say they don’t get great terms from the mfgs, co-marketing, VOI/Consignment inventory etc. There are all kinds of ways they mitigate the total inventory costs in those products in order to stuff the channel.
However, even with all that said, you don’t know how much taget pays for each Xbox 1 sold. Maybe its $100, maybe its $180 or maybe its $10(hint its not). It is very possible Target would be okay with selling the system at $140, odds are they aren’t. Being that MS already put holiday deals in place to get the XBOX1s to $199 most everywhere, that probably put the wholesale/rebate/marketing deal somewhere in the $150-160 range. Again consoles just don’t have the margins to offer the wholesale deals like other retail products. I can say this as someone with years in Supply Chain, MFG and Inventory management.
Fortunately for MS the One doesn’t cost nearly as much as it did 5 years ago to make. So they probably offered several inventory rebate incentives or consignment style/vendor owned inventory type deals.
Consoles are still very much a razor & razor blade style market where they gladly take thin margins/loss to get the hardware in your hands to reap benefits on the software and services once you have it.
Again not disagreeing with your wholesaler history and talk, personally i thought most people knew this, but you are mistaken regarding consoles and a lot of expensive electronics where the margins don’t exist to give the deals you think. Would gladly discuss this more though as I love this side of things. Glad I got out of SC/MFG/INV too though.