Samsung and Sony price Locking

[wormraper]

Originally Posted by maygit

If this were the case, then why do u think Circuit City went out, Best Buy is on the brink, and Sears is in trouble and mentions low profit in electronics as one of the reasons? Profit margins in CE are extremely low in most cases. Most tvs are sold at or even below cost. On average, at the national CE retailer i work for, we make 2% profit on TVs. And that's not factoring in that they still need to pay associates and pay for overhead. Why do you think HDMI cables and other accessories are so much $ compared to online or why they push extended warranties on you (not the only reason, but a factor)? It's one of the only ways to stay in business. Also, why do you think most stores offer their own credit cards? It's so when we swipe through a mastercard, visa, discover, etc. we're not getting charged 2-5% from the credit company to get our money. By using that stores own card, they get charged nothing and actually get paid when it's used (called shared APO).

exactly, hardware is usually sold at cost or just over cost while add-ons and software have INSANE markups to compensate.

[kemcha]

maygit, you got that wrong. Back in 2007/2008, when the stock market crashed because of AIG, the big banks and the toxic assets that banks were trading on over that whole sub prime mortgage mess, Congress ended up passing an emergency bailout bill for these banks in the hopes that they would keep credit open so that small businesses and the like could continue to borrow and keep their businesses moving forward.

Circuit City was already facing problems over the problems involving their executives and managers. That was when Circuit City started terminating a lot of those managers because of the degree of mismanagement that was going on. At that time, Circuit City was trying to turn their ailing chain around but that the banks weren't making any loans to anyone and so many businesses ended up closing up and one of those casualties was Circuit City.

Ever since Circuit City went under, Best Buy's customer service has flown the coop and their in-store employees have resorted in treating their customers like crap. The level of service has really deteriorated.

I remember the problems regarding Circuit City because I was working at Target at the time and remember the problems that Circuit City was going through. It didn't help matters any that they couldn't keep their music and movies inventory in stock ... they definitely had problems.

[maygit]

i may be partly wrong on why circuit city went out and BB is going under, but it doesnt matter how good of customer service you offer and other things if you can't make profit. I look at cost on every product i sell at work. Very few things are well above cost, and usually it's the flagship models that don't get sold as often. I had a guy buy a new model 51" samsung 720p plasma (e450 i believe) from me the other day and a tv stand. He was trying to deal prices with me claiming "i know how much you guys make on this stuff, come on give me a deal." I refused saying "i bet we're lucky to be making anything on this transaction, so no." He demanded to speak to the store manager, in which my manager refused to even come over on the subject. I then brought up cost to show him how much we would profit on the sale. The tv we were selling $25 under our cost. The stand we profited $11 on. So in the end we lost $14 on the sale. This is how about 2/3 of our sales go and we make up for it as best we can on those 1/3 transactions sold with warranties or proper accs.

For Economy, it's not the best to get the TV, I'd like to waiting for month later...of course, it'll affect the market tech and Balance, but just another Competition on both price and tech...