Best Buy is gonna run us off!
Best Buy is gonna run us off!
<a href="http://www.heatware.com/eval.php?id=123" target="_blank" >Heatware</a>
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MegaVectra
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FlyingPenguin
- Flightless Bird
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chewmanfoo
- Genuine Member
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- Joined: Thu Oct 21, 2004 8:16 pm
- Location: Winnipeg, MB, Canada
This article is interesting. I used to work for a major computer retailer so I can explain how rebates and margins work, in case some of you were interested.
If a product has a mail-in rebate from the manufacturer, the manufacturer takes a loss on the product. The retailer does not. The reason? The product is rung through the retailer's register at full price, and the reimbursement comes from the manufacturer.
If a product has an instant rebate from the retailer, the retailer might or might not take a loss on the product, depending on whether or not the retailer is being reimbursed behind the scenes by the manufacturer.
The reason most retailers offer more mail-in rebates than instant rebates is because mail-in rebates don't affect the retailer's bottom line, since the rebates are handled through the manufacturer. Thus, the retailer's sales and profits are higher. Thus, the retailer looks better on the stock market.
Where retailers take a big hit is in-store discounts not governed by home office. These include discounts on demo units, open-box product, returned product, etc. and are especially prevelant on notebook computers, where margins are usually between -2% and 2%.
Some people couldn't understand why we couldn't give them a discount on a computer or notebook, and the low margins are the reason. These low margins are also the reason why retailers usually sell cables and other accessories for much higher prices than specialty computer stores, as the retailers must make up for the poor margins on computers and notebooks somewhere else.
Without mentioning numbers, I can tell you that if the retailer I used to work for only sold computers, they would be out of business instantly. In our store, the total profit generated by all of our computer sales for 2003 was less than the annual salary of one single full-time associate. Surprising, isn't it?
We catered to people who, for the most part, weren't computer literate and didn't know the market that well. These people didn't, for the most part, know about discount computer websites, and were much more comfortable coming in to the store, speaking with and purchasing from someone knowledgable.
If a product has a mail-in rebate from the manufacturer, the manufacturer takes a loss on the product. The retailer does not. The reason? The product is rung through the retailer's register at full price, and the reimbursement comes from the manufacturer.
If a product has an instant rebate from the retailer, the retailer might or might not take a loss on the product, depending on whether or not the retailer is being reimbursed behind the scenes by the manufacturer.
The reason most retailers offer more mail-in rebates than instant rebates is because mail-in rebates don't affect the retailer's bottom line, since the rebates are handled through the manufacturer. Thus, the retailer's sales and profits are higher. Thus, the retailer looks better on the stock market.
Where retailers take a big hit is in-store discounts not governed by home office. These include discounts on demo units, open-box product, returned product, etc. and are especially prevelant on notebook computers, where margins are usually between -2% and 2%.
Some people couldn't understand why we couldn't give them a discount on a computer or notebook, and the low margins are the reason. These low margins are also the reason why retailers usually sell cables and other accessories for much higher prices than specialty computer stores, as the retailers must make up for the poor margins on computers and notebooks somewhere else.
Without mentioning numbers, I can tell you that if the retailer I used to work for only sold computers, they would be out of business instantly. In our store, the total profit generated by all of our computer sales for 2003 was less than the annual salary of one single full-time associate. Surprising, isn't it?
We catered to people who, for the most part, weren't computer literate and didn't know the market that well. These people didn't, for the most part, know about discount computer websites, and were much more comfortable coming in to the store, speaking with and purchasing from someone knowledgable.
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renovation
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i went looking for a monitor just last week and looked at open box and when i said something about $50 off the open box wasn't enough i sure got the feeling i had some incurable decease . the way they ran and all hide and didnt want to deal with me .
before this they were all over me like shit on fly paper
before this they were all over me like shit on fly paper
the Last time I was Talking to myself . I got into such a heated argument . that is why I swore I never talk to that guy again. you know what it worked now no buddy talking to me. 
