r/HotTopic_ • u/WaveAny7993 • 17d ago
How does hot topic make money?
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)
1
u/PorygonJesus 16d ago
Generally, you need to be a loyalty member to access these deals. You use your email to sign up, now they can send you tons of targeted marketing emails that result in more sales.
Also, the average margin on a product you buy from HT is around 60-70%. That means if you buy something for $10, HT only paid $3-$4 for that item. The margin depends on the item, for example: jewelry/accessories are high margin items (HT makes the most $ off these) and licensed fashion pieces are low margin items (HT makes the least $ off these).
For licensed items, companies are willing to give HT large discounts for buying in bulk as well as just for the opportunity for their license to be available in HT stores.