I was shopping for a simple 2 gigabyte PC-5300 RAM memory chip for a netbookthis afternoon. Visiting Newegg yielded prices that were between $20- $30. Checking out Best Buyand Circuit Circuit City generated prices that ranged from 40 to over 139.00 for the exact same chip.
What the hell is going on here? Even with the additional overhead for retail stores you’d think the pricing would be more rational with Newegg in the low $20’s and Best Buy at $140 for the exact same product…
The overhead is way more than you think. Also, mail order doesn’t have to keep the inventory; they can order it after you pay for it, so they don’t even need the overhead of a lot of storage space.
In case it’s not obvious, one reason having to keep the memory on hand raises the prices is that they’re selling you RAM they bought a long time ago at worse prices than you can get now. RAM prices are almost always falling, so if you want the best price, you need to buy it from someone who just bought it themselves.
And on top of it, stores like Best Buy are just generally overpriced for computer parts. They cater to people who walk in off the street and say “I have a Compaq 17304x38 and I need more RAMs. How much do RAMs cost? Why yes, I would like it installed,” not to nerds who always check newegg first.
Ex-computer store owner checking in.
Tracking current RAM memory prices is like tracking the price of gold. I’d try to only have a couple sticks of something in the store at a time - and these were mostly for repair and not general sale.
I was always cheaper to buy memory from than a larger store because they bought crates of the stuff months ago at a higher price. They also can’t alter their prices daily due to the fact they have 100 stores.
Ok, so why is the Circuit City online store still so much more expensive? Is it just to offset some of the overhead from the retail store? So that retail and online prices match? Because they’re big enough that they’ve made large orders, so they’re locked in to old prices? I’d think they’d want to get in on the sell-then-order model of other online stores.
After the explanation of what has already been said I’ll add this. They want to make the most money they can in the easiest way for there company. Selling at the lowest price available across the country doesn’t do that. Most stores are not willing to make almost nothing on each item and have to sell enormous quantities. Marking down to match everyone leads to no profits and having to close the store. Only one place can be the discount market leader that will always beat the competitors price.
They want the most profit from a group of consumers not to sell you the most items. You do not belong to the group that they cater to and can make the most profit from.
A combination of all of those things. Traditional large bricks and mortar stores with an online presence are supplying stores and online customers both from a centralised warehouse (ie. they keep stock that they paid a particular price for). Also those stores will often see the online presence as complimentary to their physical shops - they can’t offer prices so much cheaper online than they do in store or no one would use the stores (a small discrepancy is acceptable as a premium for customers who want to go to a store and walk away with an item rather than wait a few days for it to be delivered).
OB