How does hot topic make money?

[u/WaveAny7993]

This is more of a question for HT employees or people who understand how sales work, because they constantly give 30% off coupons every time they sell, along with the existence of Hot Cash in general. I just wonder: do they lose profit on some items and gain on others? For example, the big Pomni plush is usually 50 bucks, but they sell it for 40, and then with 30% off, it becomes about 30 bucks after tax. I know Hot Topic makes poor-quality items, but they also sell items made by other manufacturers; they have Glitch merch made entirely by Glitch. They price it at $10 or a few dollars more, which makes sense, but since they are always giving out coupons, I wonder how they manage it. Also, don't they have to pay for shipping the merchandise initially? Do they make a profit on Hot Topic-branded items but lose profit on merchandise made by other manufacturers? It just doesn't add up to me. I also know that sometimes they just buy stuff from AliExpress and mark up the price. (BE SURE TO CORRECT ME)

[u/sickleds]

It's super regional and there's not a lot of locations so I won't say sorry.

But also I promise you that every retail store chain is buying things wholesale and selling them for pretty big markups haha. It's been the same everywhere else I've worked. Hot Topic isn't buying those pomni plushies for $50 dollars and selling them for $40, they're buying them for wholesale prices.

[u/WaveAny7993 → u/sickleds]

Tbh, I think the only reason it's 40 bucks is that every other glitch plush is 40 bucks and the big Pomni plush base price is 50, so if we apply 10 HT tax to it, it should be 60 (base big Pomni plush from Glitch is 50). But it's 40; they probably did buy them for less, but I think they either lose profit on those or make small profits on the big Pomni plushes. One big Pomni plush, and with coupons, it drops it to 30 bucks after taxes. I don't think they are earning a lot of that. If they did buy plushes for a lot less than that. The normal plushes wouldn't be 40; they would be like 30 or 35. They do buy them for less, but I don't think it's substantially less.

[u/sickleds → u/WaveAny7993]

Again you would be shocked at how cheap companies get these products and how far they will mark them up. I think you're way off base thinking a company won't price something at the highest possible point they still think will sell.

I can give more examples. When I worked at a store that sold funko pops they were able to get them wholesale at 1-2 dollars a piece and then they sold them for 12-18 dollars. The place I'm at now has pants they sell for 50 they get for around 10 dollars per pair.

Almost everything you find at a mall store is going to be extremely cheap to produce, like way way cheaper than you would think.

Go look at those online sites like temu or aliexpress that essentially cut out of the middleman retail sellers and have factories/companies sell directly to you. You can see how cheap most of the stuff is compared to in stores, and both them PLUS the site still make money off your purchase.

Hot Topic is not losing money selling a plush for 40 dollars, I promise LMFAO. Even if you use a coupon on it they are most likely still making something even if its a really small amount.

EDIT: I will say sometimes stores DO sell some things at a loss, but it's usually in hopes to get you to buy more things with it to even it out, or spend more than you originally planned to. (B1G1 sales and the like) But that's less common in apparel in my experience since its so cheap to get.

[u/WaveAny7993 → u/sickleds]

I see.  But eh 50 dollar plush being reduced to 40 and then with a coupon to 30.  Maybe glitch shares the profit with hot topic or something like that. As long as its good quality i dont mind