[Jim Scarbrough]

We've all had it happen before. You're about to close a deal, when the customer says, "I saw it on the internet for $---- less." Then they show you the printout to verify it. And it hits you that the sell for price is less than you pay for it. How can this be?


There are several scenarios that could be happening:


1. The advertiser is direct and possibly gets better pricing on the item based on a large volume.


2. The advertiser is buying a little cheaper and marking it up way less (making it up on volume, as they say).


3. The customer, upon buying, will be pulled into a phone call with the seller where they will be pushed hard to buy warranties and accessories (at list price or higher). If they refuse, they are told the product is suddenly on backorder and the order is cancelled. Or they are called back and told the shipping is a couple of hundred dollars more expensive.


Go to one of the price search websites (such as epionions), preferably with your customer. Click on Electronics>>TV's>>FlatTVs>>Plasma>>select a model. Click "Sorted by Base Price". You'll notice that all of the vendors have a mediocre rating (doesn't seem so bad...) or very few reviews. If you click on the number of reviews under the + ratings, you'll learn a lot. All of the reviews are excellent (5 +signs) or horrible (1 or 2 +'s). And all of the excellent reviews are short and sound like a radio ad. I'll leave it to your imagination to figure out how the excellent reviews got there.


This tactic is not new. Big city camera and camcorder shops have been doing it for decades. Canon DV sent out an e-mail to dealers about 2 years ago naming a specific wholesaler and recounting their "undercover" call that followed point #3 above to the letter.


This is not to say that everyone on the internet with a great price is misleading their customers. Points 1 & 2 above happen also, but #3 seems to be more prevalent. As they say, "If it seems too good to be true, it probably is." Caveat Emptor.

 

[DNINE]

This is the oldest trick in the book. What I want to know is how E-BAY lets

sellers list the same model like many 50 or 60 plus inch Plasma displays

for thousands less then cost day after day. You can find at any given time

the Sony XBR Plasma that lists for $12,999 at 2k+ or the NEC, Zenith and

so on. I know they have a huge system and it is impossible to keep track

of every "auction" but surly they could do something if they wanted to.

 

[Andrzej]

Excluding Ebay cases and other more or less obvious swindles I don't think that legitimate online prices are lower than the corresponding dealer's cost. Their margins are, obviously, lower becasue of lower overhead cost. It may occasionally happen when prices are falling and online retailers who do not need to stock stuff can get you a deal below what a B&M dealer had to pay several months ago.


Andrzej

 

[Rysa4]

I talked to a guy who has a store here in Houston. He was stunned that my Plasma, which he sells, was sold to me at his cost. Although the price drop comment above may be true, I believe that some online resellers may indeed be purchasing the same item for less than what Brick and Mortar multi-product chains are paying. I purchase items in my line of work almost everyday and all of my compadres at other businesses purchasing from the same wholesalers are getting different prices. However, the main driver of course is overhead and internet sales. The internet is a larger market, and a computer, phone and warehouse is a lot cheaper than 15 stores, 500 employees and all of the attendant costs, with no internet sale emphasis. I am glad there are real stores around and I purchase from them as well, but it pays to do your homework and look around if you can. There are many very reputable and trustworthy online resellers and its worth finding them. IMHO, the service is MUCH BETTER with a good online reseller for plasmas than most Brick and Mortar chain stores. An online retailer's sales are immediately affected by both positive and negative occurences way more than their B&M counterparts. The information age moves in both directions and B&M places are truely "stuck in the mud" both for good and bad.

 

[vjd3]

The markup is really big, though ... for example, a large B&M sells the Panasonic consumer version of the 6UY for $4499. A friend of mine works there, and he told me he could buy it for their cost plus $1 ... and that price was almost $1500 less than that. So there's lots of room for markdown there.


Vic

 

[rogo]

It's hard to make money if you don't make margin.


Most Internet sellers of plasmas -- most, not all -- are running these tiny margins on their tiny businesses. They are not going to be able to help you if there is a problem.


Some bend over backwards and are great.


Most people want to buy a $3000-25000 TV in a store and don't give a rat's behind what you can buy it for online. In fact, the smart ones should very politely tell you that they can make a price concession, but then that's it.


If you don't like the price, you should buy online.


$1500 may seem like a lot, but when you are making -$10 per cheap DVD player sold (due to returns) and getting stuck with obsolete computers (due to product cycles), you need to make money somewhere.


I guess I am not troubled by this notion. I will support and encourage the existence of Best Buy, Sears, et al. all the way up to Snooty Stereo and Video. I might not personally shop there, but I wouldn't hesitate to recommend the good ones.


If you tell your friend to buy from flybynight.com and there is a problem, are you going to get him / her a new plasma? I recommend very few of the onliners, and only because their reputations are so stellar and so assiduously protected.


Mark

 

[wblynch]

Ah, Capitalism and Competition.


For decades now (and at a geometrically increasing rate) American business has done all they can to eliminate jobs in America and either "offshore" those jobs to a foreign country or flood our shores with cheap foreign labor. These buisinesses and corporations have no loyalty to, nor do they value, American workers.


In the same way, consumers have searched for the best deal they could get. Either in warehouse stores like Costco and Wal-Mart or, better still, in that huge online shopping mall. Consumers have lost their loyalty to the brick and mortar retailers.


America is over-retailed as it is, with Home Depots scattered far and wide, (sometimes mere blocks apart) and Starbuck's Coffee shops steps away from each other. The mega-chains and franchises have searched out and destroyed the traditional "Mom and Pop" stores.


"Mom and Pop" have moved to the internet. It is the one place where Mom and Pop can actually compete with and survive against the corporate mongers.


Shopping on the internet is a good thing.

 

[adb]

Many people cannot stand to buy something unless they get it at the cheapest possible price, regardless of the consequences. More times than you might imagine there are those consequences.

 

[Andrzej]

Quote:

Originally posted by adb Many people cannot stand to buy something unless they get it at the cheapest possible price, regardless of the consequences. More times than you might imagine there are those consequences.

I would say that most intelligent people try to get the best deal in their particular situation. This doesn't imply the lowest possible price. There are other objective and subjective factors that contribute to the overall "score", including the risk of paying "those consequences" and the value of "peace of mind". There are always consequences of our decisions. Problems arise only when we are not prepared for them.


Andrzej

 

[wblynch]

The good old "fear factor" at play.....

Quote:

Originally posted by adb Many people cannot stand to buy something unless they get it at the cheapest possible price, regardless of the consequences. More times than you might imagine there are those consequences.

 

[Bure9]

Why does it seem like some people intentionally go out of their way to knock online retailers? We know the risk with the purchase but its worth it considering the ridiculous B&M prices out there.

 

[Nez]

There seems to be two distinct factors between online retailers and B&M stores: money and time. For B&M, if you want it right now, then a B&M store is the way to go. If you have problems with the display, then it is usually quickly resolved by returning it. Of course the price is higher and you often pay sales tax.


For online stores, you have to wait for delivery and if there is a problem, the dealer resolves it but it usually takes longer. But, you can save hundreds buying online and avoid sales tax for the most part.


So, if you're a 'need it now' type of person, then a B&M store may be the way to go. If you can wait for your items to be delivered, and you can handle a longer time to resolve any potential problems, then go online and save $$$.

 

[Jim Scarbrough]

There are many EXCELLENT online retailers. This thread is not a knock against people working hard for thin profits. That's a business decision. This thread is simply a warning that many of the absolute lowest prices on the price search sites are not for real.


Personally, I shop on the internet often and I research every company before I place an order with them. I've never had a problem with the orders I've placed.


DNINE- The $2K E-bay offers are overseas con artists, usually in Italy or Eastern Europe. Before the deal is done, your only payment options are money order or Western Union, neither of which is traceable. You won't get your plasma (or RPTV, or projector, or motorcycle...).

 

[Descolada]

My question would be to what extent different vendors (both online and B&M) are able to negotiate lower costs from the manufacturer... is it common for B&M's, especially the smaller ones, to buy from the manufacturer directly, or do they purchase from wholesalers, which would add to the overall markup? Or is a wholesaler somewhere in the chain of most or all plasma purchases?


Seems like lower prices could be explained at least to some degree if the display is purchased directly from a wholesaler, or other dealers that act only as agents in connecting a wholesaler with a customer and are willing to make a much smaller profit in favor of volume...

 

[wblynch]

I found it amusing that last month there was an entire thread about people buying a very popular plasma screen, for a highly discounted price, from an online retailer only to find it was sourced from Tweeter's (some big mid-west b&m).


When they tried to buy it from Tweeter's themselves, they weren't able to negotiate a price anywhere near the online price. (Maybe $1500 over or something like that)


So, same product, same source. Different prices.


My opinion is that those who are willing to do a little searching and research can save tons of dough buying on the internet. Those stuck in the traditional sales cycle will get the traditional "shaft" from the brick and mortars.


I try to avoid getting the shaft.

 

[DNINE]

The short of it is if your a big chain store you buy directly from the Manufacture and get a better price most of the time, if you an independent

you can't afford to buy direct because there is a minimum amount of units needed to buy, so you buy from a Wholesaler who doesn't sell to the public

because he is a Wholesaler. At the same time deals do pop up where

a company like Tweeter agrees to sell X amount of units to a particular

online retailer they make a deal something like for 90 days or whatever

amount of time this exclusive online retailer is the only one who can sell the product at a certain price, even if that price is less then Tweeters

 

[lewlew]

No one in this thread mentioned the coupon boy in Texas. He makes even the lowest priced online dealers throw up their hands in disbelief, saying

"can't touch that".


Just how does he actually do that?


Lew

 

[Seanster]

Speaking of Europe scams, on Ebay I (at seperate times) put a bid on a non-europe LCD auction, then after both auctions ended I got 4 emails per auction from different European scams like the ones mentioned above. After an auction is over all the bidders are listed, so they send an email offer probly to each one, wire transfer or money order only payment.

 

[henry]

I'm an on line retailor for pet products. We actually pay higher costs for the products than the vet but are estimating $80 million dollars sales for this year and a very healthy profit. How do we do it? Advertising and excellent customer service (we have a 98% customer approval rating.) Our prices are 10-15% less than vets and we ship directly to your door. It doesn't surprise me on line retailors are thriving.


Best regards-Henry

 

[wblynch]

Pet Meds? Online? Huh, who would have ever thought....


------------------------

"I'm an on line retailor for pet products"