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Apple vs. Best Buy: The Ethics of Underselling
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The commission sales without comission thing extended even worse for me, as I was a part time employee. Have a bad week? Next week I got 4 hours. If I didn't make good use of those 4 hours, it'd stay at 4 hours. Then some weeks, it'd be 20 hours. It wasn't just the flim flam of being part time, it was based off my performance as a sales person.
And good lord am I a bad sales person. I was too honest with customers. I didn't want to do any sales tricks to get a sale. It just wasn't worth it to me. I would always argue to my managers (my supervisors actually got what I was all about) that my sales has the lowest rate of buyer's remorse / returns and the highest rate of customer satisfication. But because I didn't increase profit margins (despite not having returns and repeat business from happy customers leading to greater profit margins in the longer term) directly I was considered a bad salesperson.
Going back to the original topic. Best Buy, and other retailers, do similar things with other items. Sale laptop for 400 bucks. Give 10 to each store for a whole week. It's done purposely so that it'll sell out by say, Tuesday and then the rest of the week is upselling.
I feel like I should go up to a best buy employee, hug them and say "This is only for now".
Seriously.
the "no true scotch man" fallacy.
Best Buy Mobile employees make commission-based bonuses determined somehow by the department's monthly sales. I'm not sure how it works but my wife has gotten several bonuses.
As for holding stock, is there any proof of this other than rabid Apple fans not being able to buy the iPad2 anywhere, including Best Buy? I mean, the thing is sold out absolutely everywhere, including Apple stores, so aside from wild speculation, where's the proof?
https://steamcommunity.com/profiles/76561197970666737/
But in this case the customer isn't choosing between buying something and going home empty-handed, because they're still going to BB #2 to get the iPad there. They're not going home empty-handed, regardless of whether they buy anything from BB #1.
They can also get their iPad accessories at BB #2, along with whatever other impulse DVD/game purchases they're going to make.
Disney controls distribution of their movies, though. BB doesn't control distribution of iPads. I can go get an iPad at the Apple Store. I can't go get a Disney movie from Paramount or Sony. It makes no sense to hoard something in hopes of driving up the price, when it's widely available at MSRP from other sellers.
The Disney comparison would seem to make more sense if it was Apple hoarding the iPads.
For one, like others have said, most people who are going to go to BB weeks after the release probably aren't hardcore set on an iPad 2. Most of the ones who are set on an iPad 2 are probably going to BB either because it's the closest place, or they have gift cards.
If it's the closest place, BB has the advantage. The customer is probably there because they don't want to have to drive all around just to get one. This makes them more likely (however slightly) to be interested in an alternative should the i2 be out of stock.
If they have gift cards, ultimately, BB already has their money, so they don't really count.
So it's reasonable to say that most people going into BB nowadays for an i2 are probably willing to consider an alternative.
Beyond that, if they claim they're out when they're not, and assuming it's at least an intentional tactic at the store level, they may say something like, "Don't sell more than x i2s a day." One reason to do this is so they can tell Apple they aren't selling very many, so they don't have to keep buying a bunch more from Apple. This gives BB the advantage of being able to advertise that they sell the iPad 2, which gives them a marketing boost, and while they are stuck with a larger initial investment (buy having to buy/stock a bunch at release and later), they can order less and less, keeping only a relatively small stock, which reduces the real cost of the advertising they get from Apple (the less iPads they have to buy to get the marketing boost, the better, technically).
Of course, this is all assumes a silly premise- that BB just wants to carry/sell enough iPad 2s so that they can advertise that they carry it, so that people will come in looking for it, so that BB can try to sell them something else.
Now, that is a silly premise, but I've frankly seen companies do dumber things to try to make money, and if BB isn't making a lot of sales profit on i2s, it makes some sense to try to milk the product for all it's worth.
And I don't know how Best Buy mobile's commission works, or if they have one at all, but all BB employees receive quarterly, I believe, bonuses based on certain things. I'm just going what I was told by employees at a couple of different Best Buys. It is based on revenue, but it's not based on their specific sales. They get the same amount whether they sold 100 things or 1 (of course it's more if you sell 100, but the money is distributed evenly).
That's a standard accounting rule, not specific to any one retailer.
I just want to say, this is completely not true.
I have no love for the company, but this kind of conspiracy theory is silly goosery of the highest order.
And hours. You don't sell what they want you to sell, you don't get as many hours as the next guy.
If I go to the Apple Store (which I couldn't even do back in Canada because the closest one was three hours away), I can see all the products I want, I can use the display models, that's all great... but Jesus Christ, actually buying something is like pulling hen's teeth. Out of a coyote's stomach. While blindfolded. The last time I was at an Apple Store, I was just picking up a SmartCover for my iPad. I knew the colour I wanted, it took me thirty seconds to find them in the store, I grabbed the one I wanted off the shelf, then it took twenty minutes after that to flag down a blueshirt, communicate to them my desire to exchange legal tender currency for the item I held in my hand, wait for them to refer me to someone who could cash me out, then wait some more because that person got called away to go do something else. Apple Stores are also always stupidly crowded, and I don't even know what all of those people are doing in there, because they obviously aren't buying anything. I mean, is going to the Apple Store and spending an hour smearing grubby fingerprints over all the display models just something people do for fun?
If I go anywhere other than an Apple Store, though, like for instance Best Buy, I'm lucky if they even have display models in working order, and none of the employees I manage to corner and interrogate can even answer any of the (few, specific) questions I have. I'm not expecting everyone on the floor of Best Buy to be a Mac Guru or anything, but I've seriously gone into Best Buy in the past and had the only worker in the computer department tell me, straight-faced, "I don't know anything about Macs, I just use a normal computer." Yeah, that's going to make me want to buy Apple products.
In my perfect world, Apple would:
As this thread has pointed out, Best Buy really doesn't have much of an incentive to sell Apple products, because the prices are so tightly controlled. So, fuck 'em - cut them out of the loop.
What the hell?
Do Apple stores seriously not have cashiers?
Pretty much. While I was working there it was pretty much policy in the Computer Department that any Mac that went out the door HAD to have a protection plan on it, or it was a negative sale. It had to have, generally, at least another 100-200 in accessories/protection plan/services before a Mac was a "sale".
And, just to let people know, we did sometimes get compensated for selling services. A couple times it was first person to 5 computers with protection plans get a gift card, person with most PP gets a gift card. This might have just been our store that did this, but it was nice. A gift card to best buy, when you work at best buy, is actually pretty nice.
They really don't, in any meaningful sense of the word. The theory is, every worker out on the floor can process sales right then and there on their slick little custom iPhone sales software. But if you're paying with cash, well shit, they don't have something silly and dirty and meatspace like change on them, so you need to go talk to that guy over there. Oh, you wanted to pay with a credit card? Sorry, they can't process that without a card reader, but they're pretty sure this guy has one, so he's going to take care of you now, OK? OK great!
It is the dumbest fucking thing ever and I hate it so much.
The most notable difference to me is that Best Buy is a retailer of third-party products, whereas Disney (or Apple, or whoever) is a first-party proprietary company that allows retailers like Best Buy to sell their products in hopes of selling high-margin accessories and whatever else.
Disney is of course being ridiculous and pedantic when they warn about movies "going into the vault!" but that's Disney's prerogative to withhold stock. It's their product.
Best Buy (if the rumor holds) is leveraging a false shortage of a product available elsewhere to drive up their own sales. And in that, it's possibly illegal, as it's leveraging the popularity of a product to drive their own sales without actually offering that product.
I'm asking this as someone who's been inside an Apple store all of twice, to drop off and pick up an employer's Mac for service.
So, basically, the rumor is true?
They're turning people away despite having the product in stock?
Totally.
It was a poorly constructed analogy, agreed (I blame it on the lack of caffeine, braincells, etc).
I'm thinking the legality of it all will come down to the narrative used. Something like, "We're out of stock." when there are units in stock; might constitute some sort of fraud upon the consumer. However, if the sales associate was like, "We've sold our BB Corporate set quota for today; please try again tomorrow." It may not bring the 5-0's wrath.
And as Cameron_Talley mentioned, since BB isn't the manufacturer they run the risk of pissing off Apple and having their distributor agreement yanked.
See this article:
http://www.ifoapplestore.com/db/2010/02/04/revealed-retail-stores-handheld-pos-device/
You swipe the card, they email you the receipt.
This is not new by any sense of the word; They used Pocket PCs before that, mainly for use at busy times at Christmas. Before that, They had real cashiers.
That website will also tell you basically everything you never wanted to know about Apple stores.
3DS Friend Code: 0404-6826-4588 PM if you add.
I think that would greatly depend on both the trade agreement between Apple and Best Buy and whatever statutes the appropriate governmental agency had in place that might address such issues.
I'm pretty sure, at some level, leveraging a consigned product's demand for your own gain by purposefully misstating the availability of said product is some sort of fraud, potentially against both the consigning party and the consumer. I would be very surprised if there wasn't some sort of legislation already protecting against practices like these; it's fairly predatory.
Aww, I really wanted to see two iPhones making sweet, sweet love on a countertop.
I don't think even GS would prevent the sale of non-reserved copies.
This is just bizarre. The whole point of a promotion is to get people to buy the dang thing in the first place, so what's the point of turning away willing buyers before the promotion?
This smells like a setup for a bundle. If Apple's MSRP of the iPad is $500, BB's going bundle it with a $2 pair of headphones for $600.
http://www.macrumors.com/2011/04/08/best-buy-not-in-trouble-with-apple-holding-ipad-2-stock-for-upcoming-promotion/
3DS Friend Code: 0404-6826-4588 PM if you add.
this has never happened to me
three times i've bought something at an apple store (ipod, pair of headphones, macbook) and all three times the first floorperson i talked to did the sale on their little unit thing and i was out immediately
Truth be told, I'm in love with the EeePad Slider.
The iPad nor the eeePad is Best Buy's "own product."
Of course, one assumes apple isn't too happy with it.
that's why we call it the struggle, you're supposed to sweat
I'm not really sure where the fraud or the rage here is coming from.
Best Buy bought those IPads for the asked for wholesale price, if they want to sell them it's their business, if they want to hold them its their business, if they want to publicly destroy one with a sledgehammer every day like that magazine did with PS3s it's their business. If Apple doesn't like that they are welcome to pull their products from the store. If a consumer doesn't like that there are dozens of other big box stores around where they can buy things.
They don't have any requirement to make inventory numbers available to the public, and so long as the average consumer can easily solve this problem by such simple methods as "walk next door to Target" I don't see the issue.
On the other hand, the business practices are somewhat suspect. At the same time, legally, I suppose Best Buy has the same right to hold back inventory as much as Apple as the right not to sell inventory to Best Buy.
It won't effect me personally, I avoid the Apple guys at my local Best Buy because I'm not in the market for a laptop, and the guys are salesmen, and thus, it'd be a waste of time for them to talk to me. I'm there for hardware sales I don't want to buy online (big stuff that I need to see in person), or videos on sale.
The discrepancy come in at the points where Best Buy purposefully misstates the iPad's availability to increase their own profits vis a vis product bundling or selling opportunity cost products with higher margins.
I'm not sure it's legal. And even if it is, I'm fairly certain the company being leveraged upon doesn't take it kindly.
This would only apply if Best Buy was somehow claiming iPads were out of stock everywhere, instead of just saying that they aren't selling any.
There are exceptions of course, but very very few and none with something as nonessential as a freaking ipad.
Apple, however, is in no way required to maintain a business relationship with said company.
Let's play Mario Kart or something...