alt Hacker NewsYou have already gotten two answers showing why this causes the manufacturer to lose money. A third: I hike, enough that pretty much all my gear out there is the good stuff. I do not care one bit about brands and would prefer not to be an ad for the outdoor companies--but I am anyway because it's not just a name.
Suppose Big Brand X fails to sell all of this year's design and offloads them as discount brand Y. People like me don't want that big X on our stuff, if we learn Y is the same thing we are going to buy Y. And next year their sales of X drop because people like me waiting for the secondary stuff. Thus even if you do not consider brand dilution it's still in their interest to not sell the technical stuff in the secondary channels. When you produce quality a policy of not having sales or setting limits on sales makes a lot of sense.
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> Suppose Big Brand X fails to sell all of this year's design and offloads them as discount brand Y.
Does that actually happen? What I see happening instead in the bike clothing market is that either after the season, or if a new design is to be unveiled after several seasons, the items gets heavily discounted (often more than 50%). It's just your decision if you need the most expensive newest items right now or you buy possibly older or out of season designs much cheaper. But the branding is also very much integrated, so it would be hard to change the branding on an existing item.
There are a few brands that try to limit this and keep the discounts in check like Assos, but that only means it's harder to find a heavily discounted item, still possible.
> When you produce quality a policy of not having sales or setting limits on sales makes a lot of sense.
Sure, if you can find customers that accept that, why not. In that case just manufacture fewer items.
This feels like the argument for why not deflationary currency. Said another way, I have a property worth X, but next year it will be worth more because money is deflationary. Why would I want to sell my house this year when I can wait until next year to sell my house and get more money.