umad: lennavan: umad: RTFA. $7 million is not "free".I am shocked that this thread is filled with such financial ignorance./not reallySays the guy who thinks this cost the store $7 million?The promotion and the bet cost Mattress Mac something like $2-3 million.Then I take it back. $2-3 million is totally the same thing as free. Tard.
TheDirtyNacho: So he's paying for all these news stories, fark threads and countless discussions taking place around Houston?Someone's ignorant here, but it's not me.
lennavan: You think he paid $2-3 million to the news station to cover this?
lennavan: umad: fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."Wait, McDonalds gives away happy meal toys for free to the vast majority of people and pays for it by charging advertisers?I always thought you had to buy a happy meal to get one.
umad: lennavan: You think he paid $2-3 million to the news station to cover this?No
umad: It doesn't matter that he didn't give it to them. He still had to spend it before they would give him all of this "free" advertising.
umad: lennavan: umad: fark threads and counless discussions are "free" in the same way the toy you get in your happy meal is "free."Wait, McDonalds gives away happy meal toys for free to the vast majority of people and pays for it by charging advertisers?I always thought you had to buy a happy meal to get one.You ordered your happy meal. Not the toy. The toy was "free".
lennavan: Would you summarize that as "free" advertising?
umad: lennavan: Would you summarize that as "free" advertising?No
umad: he didn't give it to them.
umad: I'm not a farking retard
kaduh: He only offered it if one team won. My guess is that he teased the spread to even money and put a shiatload on Seattle to win with a Vegas sports book, thus offsetting any loss he would incur at his business. He made a profit on it, trust me.If I needed to furnish my house, that's what I would have done, only with Denver as a hedge.
Pelvic Splanchnic Ganglion: There are insurance companies who will sell coverage to cover gambling losses?
grimlock1972: No Insurance? damn stupid guy.That said i would have liked to see his reactions as the Super bowl unfolded.
brobdiggy: Assuming no insurance, this IS a big fail , and here's why:Furniture isn't something you buy often. It's not like gas and groceries. During this promotion, a whole bunch of people (who had been putting off buying furniture for a while) decided to buy a bunch (knowing that they would eventually need it anyway). They bought now only because of the probability of getting it free. (If Seattel would have lost, many would have tried to return the furniture or quit making payments on it.... but maybe Mac had "insurance" such as pay-up-front, no financing, no returns)...But Seattle won... the result is that even if the customers "like" the furniture, most of the customers will not buy furniture again for 10 years. Also, if they're the type of people that only bought from him due to the promotion, they'll buy the furniture somewhere cheaper next time anyway.He took a loss. I highly doubt this promotion gained him any new customers. It only gained people who will try to take advantage of his next fail promotion, which will once again be a huge loss for him.
sigdiamond2000: "Mattress Mac doesn't believe in insurance. He considers it a form of gambling."
SilentStrider: and if the moron had bought insurance, he could actually make more of a profit. instead, he's in the hole
Rising_Zan_Samurai_Gunman: And depending on what people were buying, $6k in many cases will only cover 1 room, maybe 2.
grimlock1972: No Insurance? damn stupid guy.
bigghigg: Flint Ironstag: grimlock1972: No Insurance? damn stupid guy.Why?If you can afford it you will come out ahead in the long term by not having insurance. I used to work for a major retailer and I know for a fact they didn't have insurance for any of their stores except for the legally required public liability insurance. If a store burns down, they pay for it to be rebuilt. But they save so much money each and every year in not paying insurance premiums, multiplied by the number of stores they had, that if they have to pay for the odd rebuilding they still come out way ahead.They are just doing exactly what an insurance company does, except they are keeping all the profit themselves.Even Walmart does it in many areas. Are you calling them "damn stupid"?As I posted earlier, over the long term you will lose more by having insurance. Insurers work out the odds and set the premium to ensure they always make a profit. The premiums for a 50/50 event would be more than 50% of the total sum insured, so over say four years assuming he loses half the time the figures would look like this:Without insurance.Year 1 lose $7mYear 2 win, no loss.Year 3 lose $7mYear 4 win, no loss.Total expense for promotion $14 millionWith insurance.Year 1 lose pay $4million insurance premium.Year 2 win,pay $4million insurance premium. + 3 million profit = 1 million lossYear 3 lose, pay $4million insurance premium.Year 4 win, pay $4million insurance premium. + 3 million profit = 1 million lossTotal expense for promotion $16 million10 millionBy having insurance you are $2 million dollars worse better off. (Those figures are at retail of course. His actual costs would have been far lower.)I don't disagree with your premise that buying insurance costs more. Just adjusting the formula a little. Don't know how much profit Mac makes, but the thread consensus seems to be 2-3 million on 7 million in sales. The actual number will determine where you end up.
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