Channel Stuffing
No, we’re talking about an attempt to shop lift a lot of perfume here. (That's Chanel anyway...one "n.") We’re referring to companies trying to skew their earnings for a particular time period. In order to make expectations for a particular period (usually a quarter), a company might push customers to buy a bunch of stuff now and just leave it in inventory for later.
The company books a bunch of sales right away, goosing this quarter's revenue and earnings. All the analysts are happy, and the stock goes up. The problem is: the company just borrowed sales from the future. All the customers that stuffed the channel this quarter won't need to re-up as scheduled next quarter. Eventually, the company has to use other tricks to inflate their numbers or, somewhere down the line, book a really weak quarter. But by that time, maybe the executives in charge have already exercised their stock options and spent their bonus checks. Someone else's problem.
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Finance: What is the Federal Trade Commi...1 Views
Finance a la shmoop. What is the Federal Trade Commission or FTC? Oh those naughty
sellers they lied they stole they claimed it would let you fly only it [Guy's nose starts growing]
didn't. It was the era when the US was in fast conversion from being a farming [Woman with wings jumps out a window and falls]
dominated economy to an urban businessy kind of economy. Still exporting a lot
of cotton and guns to Europe and opening an era when uneducated unsophisticated [Guy reading a newspaper saying Oprah is running for president]
consumers believe more or less everything they read in the paper and
yes in 1914 the newspaper back then and that was a thing.. At its essence the [Picture of an old newspaper]
Federal Trade Commission is supposed to be the protector of truth justice and [Guy wearing a superhero costume with the FTC logo]
the American Way. They exist to prevent fraudulent or
deceptive trade practices like lying about what your product does, so fraudsters
aren't new to the American playing fields they live in the form of telemarketers, [Woman weaing a headset]
funeral-home salesmen, identity thieves and all kinds of other scammers and [A hand steals an ID card]
schemers to build Joe Sixpack out of money he's saved to you know buy a [Guy carrying two six packs]
six-pack. Well after one too many city slickers took advantage of poor farmer
Joe Woodrow Wilson or Woody Woo as his friends at Princeton liked to call him
stepped in and created the Federal Trade Commission or FTC for short kind of like [FTC logo comes out of a magicians hat]
short you know like that Woody Woo thing cut to it today and this is lifted
directly off their website and it's worth a skim. Our mission we're gonna [Picture of the FTC website]
protect consumers... competitive process... business activity... our vision a vibrant
economy characterized by vigorous competition... protect
consumers, maintain competition... Right so what does all
this mean well it means that fraudsters will always exist, that gullible Gary's
will always feed them enough gruel to continue to exist and that will at least [Gullible Gary opens a suitcase full of money]
have this guy on our side protecting truth justice and the American Way. [Superhero appears]
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