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Pricewatch and Internet High-Volume Reseller Practices

By ivstinian in Internet
Wed Jun 13, 2001 at 12:23:38 AM EST
Tags: Internet (all tags)
Internet

At work, we use the geek-friendly price comparison list, Pricewatch, to keep an eye on volatile components which fluctuate wildly in price (e.g., processors, memory)... We prefer to buy through what manufacturers call the "grey market", or whomever is cheapest (as opposed to the normal "distributor channel"), usually an Internet volume component-mover.

We've dealt with practically all of the Pricewatch vendors, most good, some not-so-good. I have written down some of the more questionable "tricks" or "overlooked issues" as they have happened, mainly so that we would remember it next time. These don't just happen on Pricewatch, though Pricewatch compiles together a lot of Internet high-volume resellers. What follows is my list, coupled with some introductory remarks and commentary.


I kept telling #kuro5hin I would write an article about this... things are quiet on K5 right now, so I figured it would be a good time again to write about some Real World Experience (tm).

You might think using Pricewatch is fairly thrifty, and you'd be right. It's cheap and, if you don't need the shrinkwrap, pretty boxes, manuals, or other paraphenalia, the equipment is OEM-class and (usually) decent. It's been a fave of hackers for a long time.

Pricewatch is an advertising system AFAIK. A company pays a certain amount of money to be listed. If the company is the lowest in a particular category, they can easily make up whatever loss they are taking in volume.

It is for this reason that there is no rating system on Pricewatch and all companies are pretty much on equal ground. Unless you figure out a way to merge it with an online reseller-rating database, you're pretty much stuck looking up each one or... worse yet... not looking them up at all.

The incidents I'm about to give don't just happen on Pricewatch. Rather, you should be wary any time you decide to buy from a high-volume reseller. It's inherent in their business model. If it isn't on the website, make sure you ask them. Never assume anything.

1. Outrageous Shipping Costs.

Most of you have been gouged with this. We were recently charged $30 to ship 3 SDRAM modules, weighing less than a pound. Make sure you check shipping charges.

2. Standardized Shiprates... Kinda?

A standard $15 per shipment (or however it is worded, "per box", etc.) sounds great until you receive the goods and find out that they divided the contents into two small boxes and charged you $30.

3. No Warranties

Some places refuse to honor their own warranties. Wanna complain? Be prepared to sit for an hour of no-music, "Your call is important to us" repeated again and again. In this case, the woman we spoke with knew a basic amount of English.

4. Excessive Restocking Fees

If it costs 30% - 50% to restock something worth $100, is it really worth returning for cash (don't forget shipping)? No? Exactly.

5. No Returns

When you get something broken, some places refuse to take the item back for a replacement one. If they've sent the wrong item, then you're really out of luck.

6. Hard Sell w/ Bait & Switch (Very Common)

Some places will have the item listed on Pricewatch, but not on their website. When you call (manually) to place the order, they have a a substitute that is a little more expensive which they will pressure you to buy... in fact, some of them won't let you off the phone without buying. Hang up on them.

7. Backordering with No Warning

Some sites will allow you to order as normal. When your package doesn't arrive ("hey, I said overnight delivery, right?!") in several days, you call back to discover that you have been charged and the order is backordered for several weeks. Couple this with difficulty "undoing" the order.

8. Vendor Switching

This is a nice one. You order from one reseller which is really a part of another resller and/or passes the order to another reseller. You receive a bill with terms you weren't aware of and a price slightly higher than what you expected ($5 - $10 more).

9. Mandatory Warranties

If you try to buy more than one or two of an item, some places won't let you. Why? They make a lot of money off of shipping. If you want more, they will not sell them to you unless you purchase a severely limited, nearly worthless "warranty". Since they can't get shipping markups, they have to figure out another way of getting the amount per item out of you.


At any rate, you get the gist. High-volume selling is competitive to the point of utter ruthlessness. on Pricewatch, being first on the list (and being able to stay there and still make profit) is worth a lot of money. Some information is posted, some information isn't, some is obfuscated, some is clearly stated. Some people just outright lie. The real value for us has been learning from these for next time, as even "reseller ratings" do not always give the full story.

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Pricewatch and Internet High-Volume Reseller Practices | 24 comments (20 topical, 4 editorial, 0 hidden)
It's worth the extra money for the service (2.66 / 3) (#1)
by GusherJizmac on Tue Jun 12, 2001 at 09:53:06 PM EST

Computer parts are notorious for either working immediately and forever or for failing in the first week. Because of that, I always use a more reputable dealer or go to a store in-person. When you are spending that kind of money on something that won't be guaranteed to work, why put up with overpriced shipping or restocking bullsh*t? If you want cheapness, there are usually local dealers that are cheap and slightly questionable, but you have the advantage of being able to drive over and yell at them if you get a raw deal, and can report them to the BBB in your community if there's a problem.
<sig> G u s h e r J i z m a c </sig>
Price can be worth it... (5.00 / 3) (#7)
by Speare on Tue Jun 12, 2001 at 10:08:01 PM EST

Memory is just about a commodity just like gasoline, but retailers have a nasty habit in dealing with price swings. Couple that with the volatility, and you're suckered every time you buy.

Retailer buys 100 units at $1 each. Retailer hears rumor that next week it'll be $2 each, so raises his price today, even though his stock didn't cost him more yet.

Later, retailer buys a new 100 units at $2 each. Subsequently, wholesale prices drop to $1 each. Pass those savings on? Not hardly. Those cost $2 so they'll sell to the user for at least that.

You're caught with high prices either way. Why support that for a commodity? You can't buy gasoline anywhere but the corner Texaco, but you can buy memory from someone higher up the food chain than CompUSA.

Specific example: 256MB pc100 SDRAMs at Best Buy this week: US$75. Same part through pricewatch: US$30 (and today US$27). Even with the shipping overhead, I'm saving enough to think about an extra stick of memory.
 
[ e d @ e x p l o r a t i . c o m ]
[ Parent ]

Well.. (none / 0) (#17)
by mindstrm on Thu Jun 14, 2001 at 11:56:19 AM EST

Dollar cost averaging? You don't just base the resale price of something based on what you pay for it.

'oh, that one cost me $1, so you can have it for $1.50, but that other one that's identical cost me $2, so it's $3.50'. THat's not how it works.

If he percieves that he was lucky enough to get a shipment in right before suppliers jacked prices, of course he's gonna raise it. That's how business works.


[ Parent ]
sometimes.. (none / 0) (#10)
by psyclone on Wed Jun 13, 2001 at 05:56:12 AM EST

and you only get competitive local rates if you live in or near a large metropolitan area. Living in the boones, the *only* way to get a decent price is pricewatch. I recommend the locals with service for my technically inclined friends, but buy online for myself.

[ Parent ]
caveat emptor... (2.14 / 7) (#3)
by rebelcool on Tue Jun 12, 2001 at 10:01:11 PM EST

always, caveat emptor.

COG. Build your own community. Free, easy, powerful. Demo site

Remember that if you purchase by credit card... (4.50 / 4) (#5)
by SIGFPE on Tue Jun 12, 2001 at 10:05:13 PM EST

...then you may have extra guarantees. For example if you have a dispute with a vendor you may be able to refuse to pay for a purchase if you are unable to come to a resolution. Or your credit card company may provide some kind of purchase insurance.
SIGFPE
And *never* use a debit card! (4.00 / 2) (#12)
by 87C751 on Wed Jun 13, 2001 at 08:04:45 AM EST

My only bad PriceWatch experience was about 3 years ago, when I bought 64MB of RAM from a PriceWatch-listed vendor. They charged my debit card $250 (told you it was a while back) and went out of business the next day. That's how I found out the difference between debit cards and credit cards. No, I never did get my money back.

My ranting place.
[ Parent ]

credit cards (none / 0) (#22)
by juln on Sat Jun 16, 2001 at 12:04:27 AM EST

Many cards have limitations on whether the transaction is within 50 miles of your house, and things like that. Some also have a 'deductible' of $50 or so, that you may have to pay regardless. But its ture, for the most part you can deny the charge and not have to pay anything.

[ Parent ]
two more to add to the list.. (3.75 / 4) (#9)
by toddmilburn on Wed Jun 13, 2001 at 12:39:27 AM EST

1. Quality of english... my workplace won't let me give out their credit card over the web and sometimes when I call in, the english is incomprehensible (if anyone answers the phone at all)

2. Foreign versions... I recently was shipped a japanese version of a digital camera that lacked the cords and CD's of the american version... luckily the store was courteous to ship me a free card reader... still can't read the original owners manual though (downloaded english version)

and one more... (3.00 / 1) (#11)
by psyclone on Wed Jun 13, 2001 at 05:59:26 AM EST

* Buy name-brand / Quality Hardware. Usually good hardware comes with a manufacturer's warranty since most volume retailers on pricewatch barely/rarely give you one.

[ Parent ]
Local inventory often old, outdated junk (4.25 / 4) (#13)
by jbridges on Wed Jun 13, 2001 at 08:29:44 AM EST

Look at Fry's, at BestBuy, at CompUSA.

What do you find?

Outdated, retail boxed junk.

Sure if you are buying high turn over items like IDE Harddrives you may find fresh merchandise for a good price, if it's on sale.

But what if you want a good brand name motherboard that's not a top seller. If you are lucky enough to find a local clone shop that carries it, what are the chances it's been sitting on the shelf for six months, and is the old buggy revision.

For example, look at the video card shelf at Fry's or other retailers. I remember buying a GEForce2 MX card via PriceWatch for around $110 a month or two after they first came out. Walk in the local Fry's or MicroCenter and not only did they have NO GEForce2 MX cards, their shelves were full of 3DFx cards, and TNT2 M64 cards. Many of the 3DFx cards were the VooDoo3 series for as much or more than I paid!

Retail is just not designed to keep up with the fast changing computer world.

As for those who talk about frequent returns. I have not had this experience. If it's factory sealed, 99% of the time it just seems to work. I've had FAR worse experiences with Fry's "returned and verified by Fry's" merchandise. If you see that little white sticker, don't buy it!

Anyway, since they took down frysads.com - I don't even bother with Fry's anymore. Who wants to buy a paper just to read the ads?



Even with those problems... (4.00 / 3) (#14)
by Sheepdot on Wed Jun 13, 2001 at 11:59:35 AM EST

You'd still be an idiot to make purchases anywhere else.

Seriously though, these companies make money by selling only one hop or two from the manufacturer. The whole basis of them making money relies on them *never* opening retail outlets where they will assuredly be losing money or not making nearly as much as they do online.

And just so you know, I got a good explanation the other day for why items are shipped seperately. UPS and FedEx provide insurance for shipped items much more efficiently if items are shipped seperately. Plus, companies would rather charge more and be able to get 2 of 3 items to you than charge slightly less and get 0 of 3 items to you.

Oftentimes if you talk to them you can convince them to change their policy. Depending on the phone "on-hold" wait, you might not want to do this.

And yes, they do make money by charging high shipping oftentimes, but at least they list it. Can you imagine what it was like with Pricewatch when *no one* listed shipping? You had to goto each site or call each vendor and get the shipping rates to be able to compare prices.

Do not think you are getting a better deal at Best Buy when they have the money back rebates unless it is an instant rebate.

The ad says 90 bucks for a hard drive that at its lowest costs 120 on Pricewatch. Then you go into the store and pay 145 cause it is a mail-in rebate. I, thank god, have *never* done that and have heard numbers from the BBB of 80% success rate of getting your money back. And oftentimes it is 6 to 12 months later. Never will you get your money back sooner than 30 days.


Rebates..... (4.00 / 2) (#18)
by Elkor on Thu Jun 14, 2001 at 02:08:57 PM EST

Another thing to keep in mind about rebates is that you have to pay tax on the "full" price of the item. In the case of a $50 rebate, this can be a couple of bucks itself, depending on your location.

Factor that into the "loss" associated with not having the money (you are basically giving the company who made the product an interest free 30 loan) you can add another 2-3% onto that based on the interest you would accumulate on the funds in the bank.

While this may not be significant for an individual purchasing one or two items, if you are buying a lot of different items from different places, for a personal business, or even for yourself, then it begins to add up.

Nope, rebates are a quick way for the company to make a little extra money. Especially if you are one of those people who tend to forget to mail them in (that is why you have to do it within 30 days of purchase).

Regards,
Elkor
"I won't tell you how to love God if you don't tell me how to love myself."
-Margo Eve
[ Parent ]
From the Other Side of the Fence (5.00 / 2) (#15)
by fsh on Wed Jun 13, 2001 at 07:21:37 PM EST

I used to work for one of these companies (Microbarn), and, in case anyone is interested, I have several tips and suggestions for anyone looking to by from a company listed there.

First of all, absolutely most important, is to check a third party review site, such as Reseller Ratings. This particular site lets the customer rate these mail order companies, and a lot of the pricewatch people will be listed on this site. Check out the overall ratings, but don't worry if there's one or two bad reports, even ridiculously bad reports. Every once in a while, shit happens, and someone gets pissed off. The total ratings are more important. Remember that most people are far more likely to bitch than they are to praise.

Second, the reason for the ridiculous shipping rates is very simple. Every one else does it. If you don't also use the same predatory tactics, your info will be listed way down on the 25th page. The best stores will actually keep track of the price *and* the shipping offered from their competitors, and make sure that their *total* price is competitive. Remember, just because you've paid $30 for shipping, doesn't necessarily mean you've been ripped off. If you're curious, ask the salesmen about it; most of them will be more than happy to tell you about it.

Third, ask for the warranty policy *before* you make your order. Any reputable shop will have their warranty on their website. If it's hidden, for God's sake *don't buy*! Seriously, though, the only way these companies can offer these low prices is to seriously skimp on warranty issues. Don't make the mistake of thinking they're trying to be overly harsh, and that they can waive their policies for you; they mean every damn word they say. If you're not sure you need it, and you need a return policy with no restocking fee, buy it from CompUSA. If the parts only carry the manufacturer's warranty, they'll tell you.

Lastly, many of the companies on the top of the pricewatch heap will offer a special every so often in order to attract customers. These specials often involve them selling the parts at below cost (even counting the outrageous shipping). If you're pleased with the service, buy a few other parts from 'em if you're so inclined.

Let me know if you have any other questions about it, I'll be happy to answer them as best I can.


-fsh

One thing I don't get (4.00 / 2) (#20)
by Rainy on Thu Jun 14, 2001 at 05:34:49 PM EST

Is why PW doesn't show *total* price, including shipping, and sort by that amount. This whole 'pump up s/h price' wastes everyone's time and rewards unscrupulous companies. What the *HELL* are they thinking? But, other than that, I used pricewatched many times (built two systems and done tons of upgrades), and generally i was very happy. I would probably spend at least twice as much if I was buying from compusa or whoever, not to mention that they have much less choice. The biggest problem I had was when I bought a refurbed 17" ibm monitor, and it was half-burned out (as in, middle of the screen had a yellowish hue to it, on the sides it was perfectly white). I returned it and lost about $50 on shipping. PW is perfect for me because I don't care much if I have to wait a few weeks longer to get a replacement or something, (even though in most cases that isn't needed), but for someone running a business who needs perfect quality and perfect support and doesn't mind paying for it, it may be better to find some really great dealer and stick with it. For casual computer hobbyist, pw is just smashing.
--
Rainy "Collect all zero" Day
[ Parent ]
Exactly... (5.00 / 1) (#24)
by Danse on Fri Jun 22, 2001 at 05:05:19 PM EST

I've been wondering this myself. If you go to a site like http://www.bestwebbuys.com, which is where I usually go when I'm looking to buy a book, they rank the resellers in order of price, including shipping. It's a MUCH better way to do it as it finds you the true lowest price. Now this doesn't take into account bad warranty practices and such, but they do also have a customer rating indicator right there next to the reseller's name. That also helps a lot.

I think Pricewatch would do well to beef up its service with such additions. It's already well established. I don't think many resellers would back out if they were required to submit accurate shipping costs as well as item costs. And the rating system would just be gravy, even if they don't add it I can still go to resellerratings.com. But having it there on the screen while I am looking for a good place to buy from would certainly help. I wonder if Pricewatch could make some kind of deal with Resellerratings.com to just put the rating on the Pricewatch page as a link to resellerratings.com.






An honest debate between Bush and Kerry
[ Parent ]
I got my digital camera on pricewatch (4.00 / 1) (#16)
by rveety on Thu Jun 14, 2001 at 08:32:12 AM EST

The first place I ordered from sucked. Never buy from discoverycamera.com. A few days after I placed my order they called to "confirm" it. I expected them to try to sell my overpriced accessories, but the guy actually told me if I didn't purchase the accessories they would delay the shipping for 2 weeks! He wanted to sell me batteries and a charger for over $100, which according to him was by far the best price on the net. I said "screw you, cancel my order" and purchased my camera on AMDV.com for += $10. The service there was excellent, as usual they tried to sell me more stuff but I said no. The camera came a few days later perfectly. I got quality NiMH batteries and a charger from thomasdistributing.com for <$40

The only other problem I've had buying from cheap places was my DVD player, which bestshopdigital.com said came with a rebate for 5 free dvds. Sure it came with the rebate form, but they already removed the UPC symbol before shipping.

Other that that I've had good luck and saved lots.

Returns and Warrantees (4.00 / 2) (#19)
by Elkor on Thu Jun 14, 2001 at 02:25:28 PM EST

Something to check, if you are concerned about being able to return the item because of defect is the manufacturers warranty. While you might not be able to return it to the seller you bought it from, a decent manufacturer is easier to work with.

This is why I like Maxtor drives. When I had a problem with one of their 12 gig, they sent me a new one and Material Return Authorization slip. I swapped out the drives and returned the defective one. Didn't even have to pay S&H.

Lastly, keep sales tax in mind as well, when pricing. If you are buying a $300 hard drive that would be $350 local, $30 S&H on top of the price isn't so bad when you deduct the $17.50 tax you would pay buying it locally (amount will vary, depending on local tax). You effectively save $37.50 (localCost + tax - ECost - S&H)

You need to decide how much savings you want to incur before buying from the web versus brick&mortar. Is $5 worth it? $10? $30?

Regards,
Elkor
"I won't tell you how to love God if you don't tell me how to love myself."
-Margo Eve
Gotta argue (none / 0) (#21)
by ubu on Fri Jun 15, 2001 at 05:11:44 PM EST

Maxtor ought to be good at RMAs. I'm sure they must process an RMS for up to 50% of all their drives sold into the retail channels. Maxtor makes -- hands down -- the worst, least-reliable hard drives on the planet.

And the last time I was so foolish as to buy a Maxtor Paperweight, they weren't any good at processing returns. I waited on hold for 60 minutes across two separate calls before I got someone to promise they'd sent packing materials and authorization for the return.

If they're good now and that's worth something to you, I can't criticize. But I swear I'll buy only IBM drives as long as I live. Seagate, WD, Quantum, and Maxtor can all jump up my a$$.

Ubu


--
As good old software hats say - "You are in very safe hands, if you are using CVS !!!"
[ Parent ]
Sometimes they are cheaper than wholesale (5.00 / 1) (#23)
by cable on Thu Jun 21, 2001 at 06:03:34 PM EST

the wholesale prices my company gets is almost retail prices in consumer electric stores. Many companies on Pricewatch can beat the wholesale prices I get from local wholesellers. All I have to do is pay shipping costs, and I still have their prices beat. I never buy from the first few items in the list unless I know for a fact that the company selling it is reputable and I dealt with them before. If I had a problem with their company, I don't give them repeat business. There are plenty more out there that will take my money.

------------------
Only you, can help prevent Neb Rage!
Pricewatch and Internet High-Volume Reseller Practices | 24 comments (20 topical, 4 editorial, 0 hidden)
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