Consumer Electronics: Why do we keep feeding the beast of traditional retail?

A study done by Hall and Partners (late 2003) states that 80% of all consumer electronics sales are made through 50 top companies. This tells us that stores like Best Buy and Circuit City have a pretty good handle on the market. We consumers help continue this trend by practicing old habits of not wanting to walk out of a store without something in our hands. But if consumers are looking to get the best deal possible, it is up to us to break this trend. We'll first look at why "offline" retail stores are so much more expensive. Then we'll talk about how to find that diamond in the rough and start saving you some money!

Stock, Stock, and more Stock

One of the most influential reasons why the "Big Boys" of consumer electronics have higher prices is due to the amount of stock these stores have to carry. It is true in most cases that the higher quantity ordered will yield a lower cost per item to the dealer. This is the same reason we all buy things in bulk. But then there is added cost. The stores have to stock the merchandise somewhere. They have to have floor space to showcase what they are selling. And then they have to have someone available to sell it. All these things add up quickly, consequently driving the price up to compensate for the added cost per item.

This is the huge advantage online retailers have over offline or traditional retailers. Most distributors have started offering services for their dealers, making it very simple to offer their goods online. One of the largest electronics distributors in the southwest has even gone as far as allowing dealers to link the items listed on their websites directly with their inventory. This means that consumers can go onto the website, shop for the item, and then buy directly from the distributor without even knowing. All the retailer had to do was throw a picture of the item up on the website with a link to the distributor. There is no stock, showroom, and in most cases, no salesperson to pay for. The result: a lower price for the lucky consumer.

Try Before You Buy

Even though it has been established that traditional retailers are more expensive, they still have their uses. It's up to the consumer to take advantage of the fact that the retailers offer a showroom where one can go and "play" with the item they are looking to buy. While shopping online is convenient, consumers should still be encouraged to go and find which item suits their needs best.

There is nothing worse than ordering something online just to find out that what was advertised and what was shipped were two different things. Be sure to write the item number down of the items you looked at in the store. When you get home, head to Google and type in the Brand and item number (ex: samsung ln-s2341w) in the search field. It will return a plethora of online retailers all competing for your business, plus any pertinent reviews that may be available for your product.

It is that easy and in the end you will be able to say that you got the product you wanted at the price you wanted.