Best Buy "selling at a loss" but it's not even in stock??

flegg

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So I went to Best Buy with my friends to help them buy a TV, specifically they wanted a Samsung d7000 LED.

Best Buy had a pretty damn good price on the UN55d7000 ($1799) (~50 more than Amazon). I tried to get them to price match anyways and they said they don't match online retailers. We talked about how it was a good price and they were like "we are actually selling it at a loss at this price because of a Samsung pricing policy" or something. But then we went to buy it and they were OOS (so we made the purchase but have to wait).

Seems strange they would sell something that is OOS and they have to order at a loss? or does this happen a lot?

It's funny that they try to sell HDMI cables that don't have a price marked, as if the price is negotiable or something? I didn't bother getting into that with them since I know not to try buying HDMI cables from Best Buy but still kind of funny.

I'm actually very happy that it was OOS anyways because only the October+ manufacturing dated d7000 and d8000 Samsung LEDs are top quality sets without uniformity issues.
 

Dan_D

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So I went to Best Buy with my friends to help them buy a TV, specifically they wanted a Samsung d7000 LED.

Best Buy had a pretty good price (~50 more than Amazon). I tried to get them to price match anyways and they said they don't match online retailers. We talked about how it was a good price and they were like say we are actually selling it at a loss at this price because of a Samsung pricing policy or something. But then we went to buy it and they were OOS so we made the purchase but have to wait.

Seems strange they would sell something that is OOS and they have to order at a loss? or does this happen a lot?

It's funny that they try to sell HDMI cables that don't have a price marking, as if the price is negotiable or something? I didn't bother getting into that with them since I know not to try buying HDMI cables from Best Buy but still kind of funny.

It happens more in retail than you might think. Retailers try and get people's attention with really awesome deals, then rape them with high margin items like cables and warranties.
 

DirtyB

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Although I do agree retailers do sell many items at a loss I doubt this is one of them. Pretty sure Amazon will not sell a TV at a loss and it's $50 more than amazon + amazon has to pay 50-100$ to ship it.
 

douglasb

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When the guy told you it was being sold "at a loss", he really meant "at a loss compared to the amount of profit/commission we'd like to make". Or he was just lying. They do that from time to time @ BB, ya know...
 

purple_haze

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yup..its usually like that. Selling At "Loss" means it has a small profit margin, but there is a profit margin none the less in there. In the car business its called Manufacturer holdback, meaning the car manufacturers gives the dealerships a little more leeway than what the invoice says.
 

Dan_D

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Although I do agree retailers do sell many items at a loss I doubt this is one of them. Pretty sure Amazon will not sell a TV at a loss and it's $50 more than amazon + amazon has to pay 50-100$ to ship it.

Costs are different for different businesses. The pricing secured at a given time varies from week to week and by distributor. Also, cost is relative. Best Buy cost isn't necessarily straight up pricing from the distributor. What employees see in the system includes other factors such as shipping and any taxes paid on the item on the store's side. As it was once explained to me while I worked there, it was also the average price including shipping and tax paid by the store's buyer's, but the true cost actually varied quite a bit. And the store's cost is what it takes at a minimum to not loose money on the item. It doesn't really include a profit, but it's possible this includes part of the store's operating overhead figured into it. Amazon and Newegg for example won't have nearly as much operating cost associated with a given item. They do not have sales staff salaries, or nearly the support staff, management overhead, retail rental space, etc.

I have worked for retailers like Best Buy and Comp USA in the past. This is how it was always explained to me.

When the guy told you it was being sold "at a loss", he really meant "at a loss compared to the amount of profit/commission we'd like to make". Or he was just lying. They do that from time to time @ BB, ya know...

If he was being honest about what the cost in the system said, which they can in fact see, then it includes various overhead items in the price, but it doesn't mean "profit" margin either.
 

plunger

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How would that shmuck even know if it were sold at a loss? Maybe a manager would know but a regular BB sales guy wouldn't.
 

Dan_D

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How would that shmuck even know if it were sold at a loss? Maybe a manager would know but a regular BB sales guy wouldn't.

Yes they do. They can see the cost of an item in the system. I know, I used to work there and EVERYONE who can log into the system can see that information. At Comp USA, only certain logins could see it, but we all knew the password to logons that could and rarely if ever used our own individual logins. They can't see a breakdown of how the "cost" price is reached, but they can see what is considered "cost" for an item and what retail is. They can also see business account pricing if it exists at that location.
 

Gorilla

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How would that shmuck even know if it were sold at a loss? Maybe a manager would know but a regular BB sales guy wouldn't.

A lot of employees have access to that info. If not, there is another way to figure it out. Your employee discount lets you pay 5% above cost, so if the employee discount price of a tv is $2,000, you just divide 2,000 by 1.05 which is roughly 1,904. Of course, that won't work for everything because for some items their profit margin is so thin that 5% above cost is actually higher than the regular price.

Anyway, from what I remember from working at best buy, they have massive profit margins on televisions.
 

gimp

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TV's and a lot of high-cost products are sold at a very low mark-up.
Back when I worked at wally world, tv's were usually only marked up ~5% or less.

So yes, it doesn't surprise me that they're selling at a loss, because it's made up by the 300% mark-up on HDMI cables.
 

Dan_D

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TV's and a lot of high-cost products are sold at a very low mark-up.
Back when I worked at wally world, tv's were usually only marked up ~5% or less.

So yes, it doesn't surprise me that they're selling at a loss, because it's made up by the 300% mark-up on HDMI cables.

Exactly. Consumer electronics markup has shrunk to nearly nothing thanks to high demands for cheaper and cheaper items. Electronics manufacturers can only cut the costs so much on products before the quality suffers too much to actually use the things. Retailers and manufacturers have to count on both volume and higher margin items to make up for this. So an HDMI cable that costs $3-$10 gets sold for $60. Most people don't know any better and as a result they pay the price. So that TV they bought for basically store cost is offset by the 200% markup they paid on those seemingly innocuous items.
 

FrEaKy

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So I went to Best Buy with my friends to help them buy a TV, specifically they wanted a Samsung d7000 LED.

Best Buy had a pretty damn good price on the UN55d7000 ($1799) (~50 more than Amazon). I tried to get them to price match anyways and they said they don't match online retailers. We talked about how it was a good price and they were like "we are actually selling it at a loss at this price because of a Samsung pricing policy" or something. But then we went to buy it and they were OOS (so we made the purchase but have to wait).

Seems strange they would sell something that is OOS and they have to order at a loss? or does this happen a lot?

It's funny that they try to sell HDMI cables that don't have a price marked, as if the price is negotiable or something? I didn't bother getting into that with them since I know not to try buying HDMI cables from Best Buy but still kind of funny.

I'm actually very happy that it was OOS anyways because only the October+ manufacturing dated d7000 and d8000 Samsung LEDs are top quality sets without uniformity issues.

This is normal actually.

Most retailers dont make their money from major products, but instead make it on the accessories and warrenties you would purchase with the products. Its business!
 

flegg

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It was the manager that said that btw. They still have yet to deliver the thing.
 

Justintoxicated

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Why the hell would you buy the TV from bestbuy for $50 more than amazon, AND have to wait for them to get it in stock? Wheres the logic in this?

You should have just said "Well you should sell it for even more of a loss, like amazon!" Then walked out.
 

wiseoracle

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You should have asked them to go half way. Take 25 dollars off and free in home delivery.

Amazon can and will be price matched. Reason being = Free Shipping and White Glove Delivery with free shipping on returns.
 

Staples

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It is a common practice to sell at a loss. Almost all retailers do it now to get people in the door. The items selling below cost are referred to as loss leaders.
 

Staples

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Anyway, from what I remember from working at best buy, they have massive profit margins on televisions.

Not sure when you worked there but that is no longer the case. The price structure now is so that low priced computers/TVs are sold at little to no profit and if they are over $800, there may be a $50 profit margin. When you get up to $1500 or so, there may be as much as $150 on the regular price but sale prices (and all the TVs go on sale) have a zero profit margin.
 

PersonalJ

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Brick and mortar retailers are a disaster, especially electronic retailers. Let this be a lesson to you and don't invest in any.
 

Superfly3176

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It happens more in retail than you might think. Retailers try and get people's attention with really awesome deals, then rape them with high margin items like cables and warranties.

My buddy works at a best buy. Them $100 monster cables? Yeah he can get them at cost for 6 or 12 bucks.
 
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this happens all the time in retail. loss-leader pricing.
http://en.wikipedia.org/wiki/Loss_leader
A loss leader or leader[1] is a product sold at a low price (at cost or below cost)[2] to stimulate other profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. A loss leader is often a popular article. Sometimes leader is now used as a related term and means any popular article, in other words one sold at a normal price.[3]
 
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