Failing At Business, Lesson 3 - Prove You Can't Be Trusted
...because for anyone who's dealt with Best Buy, a company that could easily be given the title of 'America's Sleaziest Retailer', the list of ways in which they try to rip you off is endless. Keep in mind that, long before they got caught with a parallel internal website that they used to dupe customers into paying higher prices than were featured on bestbuy.com, this company had been sued by the attorney's general of Minnesota, Wisconsin, New Jersey, and Connecticut.
Here are just some of the more nefarious ways Best Buy tries to separate you from your money:
The Parallel Website - Mentioned this one above - Basically they use it to prove that the great price you saw on bestbuy.com doesn't really exist. Maybe you imagined it?
Everyday Sale Prices - More than just a marketing slogan, Best Buy had a habit of swapping their regular price tags for so-called 'sale tags' that featured...the exact same prices! Reach behind the sale tag and guess what you'd find?
Bait & Switch - Best Buy practices this tactic as an art form. "That model? Don't believe what you read on CNET. It's junk." "That model? It's really popular. We might get some in a month, but we're got this other one that's got the exact same internal components." "Was that model in the advertisement? No, we don't really carry it."
Switch & Bait - Otherwise known as, Who's the expert here? "That model? It's discontinued, but the new one with HDMI, DVI, component video, and multi-byte, NTSC-compliant, filtered decoders is great. It's only a few dollars more, but I want you to get something you're really gonna love."
Interestingly such tactics, in addition to the non-stop scrutiny of law enforcement, don't seem to have much of an effect on Best Buy's corporate image. The retailer was named Forbes' Company of the Year in 2004--no doubt due to the piles of money Best Buy makes, and after all that's really what counts. Right?
These super-sized stores are designed to screw the public, AND crush you in an earthquake. I'm just saying.
For whatever it's worth in 2004 Best Buy pulled in revenue of $27.4 billion. Of that top-line figure, $934 million was net profit.
In other words, the net profit margin was 3.4%. That's pretty skinny. The results may be good for a discount electronics retailer, but a profit margin of 3.4% is low. Low. Just low.
The company has about 128,000 employees.
The Cost of Goods Sold -- the amount BB spent to acquire the stuff it sold to consumers -- was $21 billion.
Salaries, General and Administrative expenses were about $5.1 billion for the year.
Companies like Best Buy and Circuit City earn small profit margins. They all sell pretty much the same lines of merchandise. Thus, there's only two reasons a shopper will pick one over the other: price and/or convenience.
Meanwhile, WalMart isn't attempting to beat BB or CC on the price of merchandise. WalMart is selling flat-screen TVs for slightly more, but it's selling the service contracts for much much less than the other two stores. Thus, the lowest TOTAL cost to buy and safeguard a flat-screen TV is obtained at WalMart.
But if you're feeling lucky, you pay less for the TV at the other two discounters and skip the service contract.
Mother puss-bucket, no_slappz! What vengeful god did I piss off to deserve you? Does it even occur to you that I probably don't shop there? Or that the post has nothing to do with encouraging or discouraging people from shopping at Best Buy? No, I suppose not.
Would you care to offer an opinion on changes in American's shopping habits, perhaps their tolerance for shady business practices, that support keeping a scummy retailer like Best Buy in business?
And BTW I believe that 3.4% actually is pretty good for retail electronics...at least good enough to get them an acknowledged by Forbes. They're all about moving volume anyway. Thus the emphasis on getting you to walk out with something no matter what tactics have to be employed to get you to do it.
They're not in the business to not make money!
Carrie... No truer words. So, I gather you enjoyed being fleeced by 20 year old Best Buy salespersons.
I agree in principle with most of these comments, although CostCo does give close to 100% of its political contributions to the Democratic party. That is why, when given the choice of going to our local Wal-Wart (which has put our local department stores out of business) every 5-7 days or making a list of needs and then driving to CostCo in Kennewick, WA, two hours from my house, maybe every 4-6 weeks... just so Wal-Mart won't get as much of my money... I wait and then buy what I need at CostCo.
What I tend to think about is not what type of store I buy from as much as WHO I am buying from. For example, when it comes to fast food, the stuff is deadly and I usually don't eat it, but if one must eat at restaurant chains, the only two I am aware of who give most of their political money to Democrats are Arby's and Sonic.
You can find out more about where your money is going politically at www.BuyBlue.org.
I like to keep my purchases local as much as I can, so the local merchants can stay in business and make a living, and not get drummed out of business by the sprouting up of a new Home Dupe-O, Super Mall-Wart, Sham's Club, etc. The fact that I live in a "red state" area, and knowing that most local merchants may well vote GOP anyway, doesn't bug me like it used to. It's about being part of the local community and keeping a sense of community going... that has become a stronger factor with me in the small town in which I live.
If I have a choice to have something delivered via US Mail over UPS, I choose the US Mail, warts and all... because UPS was one of the major contributors to the Bush campaign in 2004. Something like $900K? I'm not sure how much it was, but it was an astronomical amount. Same goes for FedEx. And the NRA... I own a rifle, but I would never pay dues to an outfit run (or if he doesn't still run it, influenced) by a right-wing nut like Wayne LaPierre.
I am an Oregon public employee, and I if I am ever faced with a choice between sleeping in a Shilo Inn and sleeping in my car, I will choose my car... because Mark Hemstreet, the owner of Shilo Inns, has been a heavy financial contributor in the past to causes and state ballot measures which are intended to erode unions and the rights and pensions of Oregon's public employees. Same goes for Boyd's Coffee... heavy contributors to such measures... if I can avoid drinking anything Boyd's, I do avoid it. When I ask for coffee at a restaurant, I ask what kind of coffee they use. It might embarrass my wife or friends, but fuggit. I am absolutely unforgiving when it comes to some things. For a while I even boycotted a lot of local businesses who advertised on the local radio station's Rush Limbaugh broadcast, until I realized, hey, they are just advertising where they know the most people will hear about their business. It doesn't necessarily mean they are right-wing mouth-breathers... It is quite possible they are, but not necessarily so... and the more money that stays in the local community, the stronger I believe the community is.
Nonetheless, although I don't care for the "big box stores" I will make the long drive to CostCo before making the short drive to Wal-Mart any day... because the existence of the local Wal-Mart has limited the variety and availability of shopping in my town.
Btw...Carrie Oakley is a troll that's been around since I've been here. I bit - once.;)
I see two separate points here though. On the one hand, the conservative motto of "if you don't like it, don't shop there" certainly does apply to places like Best Buy and Wal-mart (among others).
However, certain nefarious practices should be, and are illegal. If you take the above model to it's logical conclusion, people who fall prey to con-artists should have no legal recourse. If someone cons you out of your money, that is your problem.
If you are intelligent and cynical, you don't really have to worry about con artists. But if you are kind, trusting and of average intelligence, you might have a hard time distinguishing a con from a legitimate offer.
And THAT is what laws are for: to protect the average person and punish those who take advantage of them.
These laws should apply to large corporations as they do to the average con man.
Sorry for the long post.
So I ended up getting my computer at Office Depot, and descended into Rebate Hell.
I don't know who I'll buy my next computer from- but I know who it won't be.
Praguetwin... Best Buy has been sued in many states, and repeatedly by the Minnesota AG for their business practices. So someone is looking out for the little guy, but this doesn't seem to stop them. Another day...another scam.
TFTY... You know, I've had pretty good luck with Geek Squad. Don't use 'em myself, but have recommended them to non-tech savy friends, and they had pretty good experiences.
And about Carrie, I know. She's a Rex Kramer wannabe but not nearly as funny.
Betmo... We have many excellent local hardware stores here too--use them whenever I can.
I don't buy any major purchase there, which kind of sucks because we really don't have any other options here.
Nvisiblewmn... Best Buy may be trying the same trick that Circuit City is trying: Firing all their sales people and hiring them back at lower salaries. Scummy.
Kay... Welcome to Blognonymous. Glad you had a good experience with Circuit City. I find them to be only one step better than Best Buy, but region may have a lot to do with that.
Scott... Why not buy your iPod from the Apple Store? Online or down in the Twin Cities.
No matter where I go, Best Buy or elsewhere, I simply won't put up with "Oh you don't want that, you'd want *insert name of unsold product sitting in their warehouse.*" As soon as they start that, I just put my hand up, say "Look, you gonna sell me this or do I go elsewhere???" Usually, when faced with a determined customer, the sales reps will back off. They go for the low hanging fruit, i.e. the waffler who doesn't know what they want. So even though it might take some pre-planning and effort, things the typical Americans aren't famous for, know what you want and don't take any guff.
It's too bad. I bought my first high quality stereo (Pioneer SX-838) from them back in the mid seventies when there was one store on 2nd avenue in downtown mpls and the name was "Sound Of Music." It was a good store with knowledgeable employees.
Circuit City??? Hah!! What a joke. AFAIK, all of the ones here in the Twin Cities have been closed. For good reason. I gave them several chances, and in all cases, their efforts were pathetic at best. Lazy apathetic employees who knew NOTHING about what they were selling. The last straw was when I was looking for a DVD recorder Finally, after 20 minutes someone decided that maybe my money may be green after all. But it was too late, I was pissed and walked out. Sears got my money instead.
That happened to me with when I bought a flat-screen TV. I knew which one I wanted, and tried to get it at a bunch of different stores. All had a similar looking unit with a different model number (a trick they use to deny your ability to price compare). I ended up, as you did buying my TV at Sears.