How can they do this? (And how long will they be able to keep it up?)

eMail regarding "In Stock Guarantee" - Source: pricepoint.com

The "Fine Print"of the "In Stock Guarantee" - Source: pricepoint.com

When I was a mail order buyer, one of the ways that my performance was evaluated was fulfillment. Fulfillment is a measure of the percentage of items ordered by a customer that could be filled when the order was placed. (If all items are in stock then the fulfillment rate (Fill Rate) is 100%. If only half of the items in stock then the fulfillment rate is 50%.) If we did not have all of the items on the order in stock then the company would have to pay for the cost of the second shipment and any subsequent shipments.

It is relatively easy to achieve 100% fulfillment. You just need to order more than you think that you'll sell. But there is a cost to ordering those large quantities of merchandise. You will have lots of cash tied up in inventory and you'll need a bigger warehouse.

As a buyer I was trying to achieve an overall fulfillment rate of of 95+ percent. For low cost items I tried to reach close to 100%. (The cost of making additional shipments of low cost items could exceed the revenue from the items.)

Pricepoint is a web-based retailer selling bicycles, bicycles parts, accessories, and clothing. The prices range from a few dollars to $4.399.98 for a carbon-framed 29er mountain bike. It will be interesting to see how long Pricepoint will continue this guarantee and how the competition will respond.