Best Buy to shutter 50 stores as Apple's iPad strains margins

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Comments

  • Reply 81 of 110
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by BigBillyGoatGruff View Post


    This is the real problem. Best Buy doesn't benefit from their overhead. Shoppers can test-drive at Best Buy, then buy online cheaper, with no sales tax, and get free shipping. Even if they provided exceptional customer service, they couldn't beat that triple threat.



    I also think people have caught on to the ruse of their "extended store warranty" things. That used to be a lot of free money coming their way.



    I'm sure it will make Amazon and others unhappy, but I really feel that we need a formal policy for collecting sales taxes over the Internet. (Technically, they're not sales taxes - in most states, there's a use tax which is equal to the sales tax when you buy something over the internet, but few people pay).



    I don't see any reason that the tax couldn't be collected and submitted at the time of purchase from online retailers. It's not fair that local retailers have to go through what you've cited above.
  • Reply 82 of 110
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by Gatorguy View Post


    Reading comprehension Jragosta. . .

    I didn't say anything of the kind.



    No, it wasn't you - it was the other guy I was responding to. Sorry.



    In any event, he was just plain wrong - even after changing his story a few times.
  • Reply 83 of 110
    jlanddjlandd Posts: 873member
    Quote:
    Originally Posted by jragosta View Post




    Your original post said that a company could not sell an iDevice for $20 less than the competition - and that was clearly incorrect.



    No that was me, and I get it.





    Quote:
    Originally Posted by jragosta View Post


    Best Buy sold iPads for $50 off just before the iPad 3 came out.



    But that was only days before Apple dropped it by $100, and BB then followed, but a week later. Obviously BB has a certain situation where they can do this, but this was a rare thing. But why didn't everyone else do the same? They were the only retailer who did anything in lead of Apple's drop and no one else was really doing the same after the $100 drop that I saw.
  • Reply 84 of 110
    naboozlenaboozle Posts: 213member
    Quote:
    Originally Posted by Orlando View Post


    The iPad might not offer BestBuy great margins but the killer is online competition. Why go to a BestBuy store when Amazon is usually cheaper?



    So you can get "advice" from an underpaid 18-yo. Who is now going to be be directed to "push" video services. Brings back fond memories of DivX.
  • Reply 85 of 110
    Quote:
    Originally Posted by charlituna View Post


    They need it to bring folks into the store to get them to buy other things



    if they blame anyone it should be best buys buyers. stop stocking the store with junk and be a bit more discerning and thoughtful on what you carry. however, i don't believe even that is what is wrong (if anything). they have done like starbucks and opened too many stores.
  • Reply 86 of 110
    hmmhmm Posts: 3,405member
    Quote:
    Originally Posted by Gatorguy View Post


    If Apple's isn't allowing enough of a markup for Best Buy to realize an appropriate profit, then they should shutter the dedicated Apple area. I don't think Apple is too concerned whether they have a large retailer presence outside of their own company stores and on-line anyway.



    Best Buy isn't going to be successful, at least in the near-term, in convincing Apple to share more of the device profits so why fight it? Really no advantage to Apple in allowing a larger discount as they'll sell everything they planned to anyway.



    I hate Best Buy, but is this really what's causing them to shut stores?



    Quote:
    Originally Posted by jragosta View Post




    Finally, if you go to the original article, it's clear that many other factors are getting the blame:

    http://www.reuters.com/article/2012/...9?feedType=RSS

    - Total sales are down across the board. Forget margins, their sales are off - which will hurt profits

    - Best Buy stores are increasingly serving as free showrooms for online retailers. That is, customers view the product at Best Buy and then buy it online.

    - Best Buy offered deep discounts across the board last quarter - presumably to try to bring in additional sales to address the previous point

    - Best Buy big box stores are too large and expensive. Plans are to close 50 large stores and open 100 small ones.



    Note that in the Reuters article, the iPad isn't mentioned at all.



    That has been a problem for B&M in general. Regarding their scale, as an anecdote, the one here always seems fairly empty.



    Quote:
    Originally Posted by jragosta View Post


    I'm sure it will make Amazon and others unhappy, but I really feel that we need a formal policy for collecting sales taxes over the Internet. (Technically, they're not sales taxes - in most states, there's a use tax which is equal to the sales tax when you buy something over the internet, but few people pay).



    I don't see any reason that the tax couldn't be collected and submitted at the time of purchase from online retailers. It's not fair that local retailers have to go through what you've cited above.



    I've expected such a thing for a long time. Many people aren't aware of use tax. Most of them don't even understand why they pay sales tax on some online purchases and not others. The way it is right now, it would truly suck for smaller retailers if they had to go through the annual paperwork for every state, but the current system for it isn't very good either.
  • Reply 87 of 110
    mdriftmeyermdriftmeyer Posts: 7,503member
    Best Buy isn't just a computer electronics chain. It's a consumer electronics, movies, kitchen appliances, etc., chain and there is no way that chain is closing it's door due to Apple.



    It's a dump and poorly managed, not to mention it's choice of 3rd party PC parts to build your own solutions for Linux, Win, etc., is utter garbage.



    The likes of Newegg have been owning them for years.



    If I want a quality refrigerator I go to a place in the PNW [Fred's Appliances] that like it's equivalence in Seattle provides Wolf, Bosch, all the way down to Magtag and Whirlpool. I can buy a $50k gas range or a $699 gas range. They're experts in what they do--commercial to consumer kitchens and laundry rooms.



    I don't go to WalMart or Sears for such stuff, what makes me think Best Buy?
  • Reply 88 of 110
    Quote:
    Originally Posted by Soundvision View Post


    Consumers are getting smarter and know how to research products on their own and purchase from the lower price available. Customers don't mind paying MSRP at a local store if they experience and quality of service is there, which is exactly why Apple has been so successful.



    This paragraph is so true. This trend began 20 or 30 years ago and it now truer than ever. As a salesman of other products it is harder and harder to stay ahead of the customer in knowledge. You just cannot fill a service niche if you are not skilled and knowledgeable. The internet has played a huge part in this transition.



    I'm not complaining, this climate is making me a better person and it's sorting out the idiots pretending to be in sales.





    Quote:
    Originally Posted by macxpress View Post


    The only thing I go in Best Buy for is to look at a product and then I go buy it elsewhere.



    I find many things to shop for at Best Buy, including a great refrigerator. It's not all bad.
  • Reply 89 of 110
    diggitidiggiti Posts: 15member
    I tend to think that people only buy from Best Buy because they approve ANYONE for their Credit Card.

    They're no Different than FINGERHUT
  • Reply 90 of 110
    mechanicmechanic Posts: 805member
    Quote:
    Originally Posted by Orlando View Post


    The iPad might not offer BestBuy great margins but the killer is online competition. Why go to a BestBuy store when Amazon is usually cheaper?



    I can tell you why worst buy is failing, there recent debacle with the iPhone 4S preorders. Is one example.

    I preordered a 64 gig 4S through them and after they forced me to put 50 down on it they tell all the preorder people that they will get there orders filled after the walkin's get there orders filled on release day. Then if after the walkin's all get there iPhones and there are any left they will fill the preorders. Then they change there mind and say that is not the case and say the preorders will be filled first. Then they have no iPhones available on launch day with no eta when they will be in. The order taken said they could fill it 3 weeks from the launch day. So I wait 3 weeks and no phone. Then they just plain say we don't know when we will get iPhones in. I got so tired of waiting I went to the store made them refund the "50 dollar gift card" they made me buy to get the preorder and bought one at the apple store the same day in my city. They had plenty.



    This problem above was not a local problem. It was nation wide.



    Another example is there prices. I get e mails for sales from them because I'm a silver premier member to get that you spend 2000 a year or more with them. One sale I got recently had a car stereo I was interested in on sale for 50 off. I shopped on there online sight and a few others and found that the stereo that was on sale at best buy was 110.00 higher than amazon! Even on sale. Same stereo!



    This happens all the time with them.



    Another reason is when browsing there online store for local store items there local stores only stock the highest priced items in a particular category. The cheaper items are always 5 day order to store or more time.

    I have quit shopping there and won't darken there doorstep again because of being rapped on prices and poor, poor, poor customer service.



    One caveat from dealing with them this is a systemic problem at a corporate level. The local people for the most part were ok to deal with (people in the stores).
  • Reply 91 of 110
    Quote:
    Originally Posted by sflocal View Post


    As usual, blame Apple. Why not blame...



    I blame AI for using shutter as the title of the article again. Say close/close down or just shut even... something
  • Reply 92 of 110
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by Splash-reverse View Post


    I blame AI for using shutter as the title of the article again. Say close/close down or just shut even... something



    Their usage makes sense to me.
    shutter |ˈʃədər|

    verb [ with obj. ]

    - close the shutters of (a window or building): the windows were shuttered against the afternoon heat | (as adj. shuttered) : barred and shuttered stores.

    -- close (a business): the city was gripped by economic forces that were squeezing its tax base and shuttering its factories.
  • Reply 93 of 110
    relicrelic Posts: 4,735member
    Is Best Buy your guy's largest electronic store? I would love to have a large electronics store like that in Switzerland.
  • Reply 94 of 110
    jlanddjlandd Posts: 873member
    Quote:
    Originally Posted by Magic_Al View Post


    In fact resellers can sell at whatever price they want, otherwise it would be price fixing and illegal. However many brand-name manufacturers restrict advertising of lower prices. In such cases a lower price can still be offered during the shopping process.





    Yes, but wouldn't you agree that one never would experience an Apple dealer chopping another $50 off of an $1,800 MBP during the shopping process just to seal the deal at your suggestion the way they would a $700 Asus?



    Non Apple Store dealers do Apple a great service in areas that don't have Apple Stores by having display models. But either way, whatever non-Apple Store dealers are willing to sell them at, forget Best Buy, even with MBPs selling through the roof the best computer stores barely move any OSX hardware these days, it's Apple Stores or Amazon.
  • Reply 95 of 110
    jragostajragosta Posts: 10,473member
    Quote:
    Originally Posted by jlandd View Post


    Yes, but wouldn't you agree that one never would experience an Apple dealer chopping another $50 off of an $1,800 MBP during the shopping process just to seal the deal at your suggestion the way they would a $700 Asus?



    No, I wouldn't agree. I've had an Apple authorized retailer offer me a discount on a computer when I said I was going to go home and think about it.



    Congratulations - you've managed a 100% record - of being wrong.
  • Reply 96 of 110
    sunilramansunilraman Posts: 8,133member
    "We've been selling the world's most popular product for the past few years and hence our profits are less"
  • Reply 97 of 110
    sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by Relic View Post


    Is Best Buy your guy's largest electronic store? I would love to have a large electronics store like that in Switzerland.



    Depends... The experience is not great. CompUSA, Best Buy, Circuit City... Pretty average when I was in the US. Fry's was the best.



    The Australian equivalent is Dick Smith, JB HiFi (which 10 years ago seemed to be a discount CD and record shop?) which has enough of your basic needs, but these kinds of chains are like convenience grocery stores while Apple Retail is Tiffany's.
  • Reply 98 of 110
    I must be in the minority since I like Best Buy. I have bought a few big ticket items over the years from them. The only complaint that I do have is the annoying attempt to sell me extended warranties on everything that I buy.
  • Reply 99 of 110
    sunilramansunilraman Posts: 8,133member
    Quote:
    Originally Posted by neosum View Post


    A gas station owner can tell you that they only make pennies on a gallon of gas. The bulk of their revenue is from food and coffee.



    The "strain" that ipads are having on Best Buy probably refers to the reduced sales of their other higher margin electronic products. They just need to upsell their ipad customers on accessories and whatever else they can push. The ipads bring in the visitors, just as the as gas brings in customers to the gas station, but their revenues depend on those customers buying other stuff.



    Upsell and Cross-sell is never a reliable model without a strong core revenue. Sure, the icing is nice, but the cake has gotta make some money.



    For years retailers got lazy depending on upsell and cross-sell to the point where they stopped making any money by, you know, selling actual stuff people want, rather than trinkets, warranties and other nonsense.
  • Reply 100 of 110
    gary54gary54 Posts: 169member
    Best Buy with all their products and the range of products they carry. TV's, stereos, home theater systems, DVD's, cameras, phones, small and major appliances, etc. Not to mention computers, parts, peripherals, etc from many different brands.



    Closed stores because of the iPad.



    Wow.
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