best buy.

[Vanraw]

Has Walmart and amazon killed the last of the big box electronic stores? I was shocked to watch this guy fold, but then realized I have not been in a best buy store for like 6 months. It used to be almost a weekly jaunt.

[Grieve]

We went in a couple of weeks back to look at washers and dryers. It was pretty sad...almost nothing there, and large parts of the floor area empty. Looked like they were downsizing.

[Slamz]

Anyone been to one recently? Was the "greeter" gone?

Went to one while visiting my parents (because they don't trust online shopping; even Amazon) and noticed they didn't have the "greeter".

Wal-Mart greeters are friendly old people. Best Buy greeters are thugs who make certain that you know that they know that you are a shoplifter.

I also noticed that there were more floor personnel and they were all quick to be helpful.


Compared to the last time I went into a Best Buy, this was a pleasant experience. Last time I went in to look at washer/dryer sets, I felt immediately unwelcome just going through the door and never could find anyone to talk to (the one sales rep in the area was bogged down in some other customer's extensive paperwork debate). I didn't trust Amazon for big box items at the time so I ended up buying the set I wanted from the Best Buy website, which actually had them on sale while the store didn't have any such sales that I could see.


The changes I saw this weekend, though, makes me wonder if Best Buy is trying to combat the rise of Amazon by trying to offer something Amazon can't: a good, personable shopping experience.

It's going to be tough, though, because a savvy public will go into Best Buy to see the stuff and get the help but then buy it through whoever sells it cheapest.

I think Best Buy could also learn something from "Amazon Basics" -- basic things, branded by Amazon and sold at low prices. Best Buy had HDMI cables for $20+. Finally found a bin of them for $10 each. Amazon Basics HDMI cables are $5 with free shipping. Little things like that could help bring people in, but right now it's bringing them into Amazon rather than Best Buy.


I think Best Buy could survive if they could change their image. Stop gouging people on the small stuff and stop treating customers like thieves. Or at least be more discrete about it.

[Grieve]

Did you see that Amazon now charge you shipping for small items unless you buy them with other items, though? I think it makes good business sense, but I used to order $2 cables and adaptors all the time with free Prime 2 day shipping.

http://www.amazon.com/Belkin-Speaker-and...s=splitter

This item is available because of the new Add-on program
The Add-on program allows Amazon to offer thousands of low-priced items that would be cost-prohibitive to ship on their own. These items ship with qualifying orders over $25 and are eligible for FREE shipping. Details

[Vanraw]

Thats interesting on amazon.

As for best buy trying to improve service, I didnt see it. The greeter police was still there.

I will say that the best merger would be amazon buying best buy. Amazons next move is to try and crack the same day purchase delivery or pickup. People use best buy as a store front today. Checking out that laptopand then buying it online.

Amazons real competition now is walmart target and places like new egg.

[Slamz]

Interesting -- must be a test program. Just bought this over the weekend and it was free shipping:
<!-- m --><a class="postlink" href="http://www.amazon.com/HD-Pro-Component-Cable-Wii-Nintendo/dp/B000M4KIME">http://www.amazon.com/HD-Pro-Component- ... B000M4KIME</a><!-- m -->
($4 Wii-to-composite cable)


In fact, it seems I can't buy that Belkin cable at all without literally adding it on to an order. There's no check-out option.

Amazon Basics HDMI cable still ships like normal, so Best Buy is still screwed on accessories.

[Skelas]

I really don't know how amazon does it on shipping. Granted they have the leverage to negotiate some great rates on shipping, but i'll get a case of coconut water for 21 bucks and free shipping with Prime, and depending on where it's shipping from, that package has to cost 10-15 bucks shipping right there (20-25 lb package). I just don't know where they get the margin for free shipping on top of their already great prices. Sure they get 79 bucks up front for Prime, but that is burned up pretty quickly.

[Vanraw]

It would be an interesting question for Vllad. I assume that Amazon has some very sweet deals when it comes to shipping from its distribution centers. If I recall, there is cost reduction for a company that does more of the up front work, such as sorting bar codes etc.

[Grieve]

Probably explains why they have huge revenue, but zero profit.

[Jakensama]

<!-- m --><a class="postlink" href="http://www.washingtonpost.com/business/economy/best-buy-suspends-forecast-as-second-quarter-profit-plunges/2011/04/07/gJQAOa76CY_page.html">http://www.washingtonpost.com/business/ ... _page.html</a><!-- m -->

Net income fell 91 percent to $12 million, or 4 cents a share, from $128 million, or 34 cents, a year earlier, the Richfield, Minnesota-based company said today in a statement. Excluding restructuring charges and other items, profit was 20 cents a share. Analysts’ average estimate was 31 cents.

91% drop in a year, that is impressive.

[Skelas]

from 128 mil to 12 mill? INCOME? I don't even see how they can stay afloat, that is a crazy plunge.

[Grieve]

To be fair, they are spending a lot on infrastructure, so the view is that once they complete that, their profit will skyrocket. That's why they have a PE of 293 (!)

Seems like a dangerous bet to me, though...

[Slamz]

from 128 mil to 12 mill? INCOME? I don't even see how they can stay afloat, that is a crazy plunge.

Well, net income, which I assume means "whatever is left after all expenses, including upgrades to infrastructure and expansion efforts". (Similarly, Netflix has been showing a loss, I think, mainly because they're spending millions trying to expand into Europe.)

Part of why I like Amazon so much (and presumably why other investors are apparently crazy about them) is that they do keep up a pretty rapid but sensible line of expansion going on. Seems like every year, at least, there's something fairly new going on. Amazon Studios is still ramping up, for example, and they just recently released the first Amazon-built Droid game, if I read that correctly.

Not sure I can see Amazon buying Best Buy or having a store front... I would think that would be a significant distraction from their current model and would undermine their ability to keep having such good deals on merchandise.

They are starting a program where they have Amazon drop boxes, though. They seem to enjoy placing them at 7-11s. Instead of UPS delivering your package to you, they put it in a drop box at 7-11 and Amazon sends you the code to open it. This is the solution for people who can't be home for package pickup and don't want it left on their doorstep and don't want to drive out to UPS, which is always in the middle of fucking nowhere.

They don't have this running in Maryland yet but I see it in Virginia. I assume it's still in the trial phase.



I'm still out of Amazon stock. Last bought for 180, I think, and sold for like 220 or so. Following my rule of "take 20% and run". I keep waiting for a big pull back so I can get back in but they keep going up. $241 at the moment. I should'a stayed in!

[Vanraw]

Not sure I can see Amazon buying Best Buy or having a store front... I would think that would be a significant distraction from their current model and would undermine their ability to keep having such good deals on merchandise.

They keep talking about trying to get to a same day delivery. This is the shopper that wants it now. I agree I do t think they are entertaining best buy, I justhink it might be a interesting view.

On another note, its interesting that Amazon is doing food now. They have been trialing a full grocery service for some time now.

[Jakensama]

<!-- m --><a class="postlink" href="http://gizmodo.com/5937153/best-buy-wants-you-to-spend-1000-on-a-hdmi-cable">http://gizmodo.com/5937153/best-buy-wan ... hdmi-cable</a><!-- m -->

Best buy needs to focus more on $938 speaker cables.

(The fark review was funny:

"OK, I'll admit that $934.99 is a little bit of a steep price. But here's what a lot of critics of Monster cables don't like to admit: they work. I don't want to get all techie here, but the resonant multi-scopic alpha shielding allowed by the alloy-plated zinconium lining prevents spectral frequencies from high-range splintering and also really helps get a handle on ionic charging, which can really cause havoc in a high-end system's radio frequencies and ultraviolet netting.

But that's the sort of stuff that makes people's eyes glaze. Here's the bottom line: The insides of the cables themselves actually amplify the signal passing through them using technology similar to what makes stealth bombers "invisible." Those bombers aren't invisible, of course -- they're just plated with slick alloys that make data waves likes RADAR "slide" over their surface more quickly. It's the same thing with Monster cables: the data passing through them "slides" through the cable more quickly. In fact, watching television with Monster cables means you're actually getting the signal a split second before someone without those cables. Now, that may not seem like much, but think about it...if you replace all your cables with Monster cables, that signal speed boost might be significant enough that you could, say, know the end of a sporting event before others do. Can we say millions in long-distance betting? It hasn't been done yet, not successfully, but it could be done by the person willing to take that first leap. That's right, a house wired entirely in Monster cables. Think about it. Think about the possibilities.")

[OrsunVZ]

Well, net income, which I assume means "whatever is left after all expenses, including upgrades to infrastructure and expansion efforts". (Similarly, Netflix has been showing a loss, I think, mainly because they're spending millions trying to expand into Europe.)

Net "income" is very differnt from net profit though Slamz. Net "income" is very specifically revenue minus the cost of goods sold. Which is to say that NONE of the capital improvement or investment in restructuring or repackaging would be included.

I'm with Skelas on this one. If those numbers are correct, these guys have to have a HUGE amount of cash reserve in order to still be able to open their doors. It is a STAGGERING drop in sales.

[strife]

http://gizmodo.com/5937153/best-buy-want...hdmi-cable

Best buy needs to focus more on $938 speaker cables.

I thought this was a joke, where they had a DB error or something and got the wrong price there... but it's not! Holy shit, I just went and searched for AudioQuest and they have a $1450 Ipod cable! Link It's pretty funny seeing an ipod cable offered with 36 month financing available... Oddly enough, no customer reviews...

[Arsilon]

Well, net income, which I assume means "whatever is left after all expenses, including upgrades to infrastructure and expansion efforts". (Similarly, Netflix has been showing a loss, I think, mainly because they're spending millions trying to expand into Europe.)

Net "income" is very differnt from net profit though Slamz. Net "income" is very specifically revenue minus the cost of goods sold. Which is to say that NONE of the capital improvement or investment in restructuring or repackaging would be included.

I'm with Skelas on this one. If those numbers are correct, these guys have to have a HUGE amount of cash reserve in order to still be able to open their doors. It is a STAGGERING drop in sales.

Gross Profit = Revenue - COGS

Net Income = final final after everything is considered.


This is why EBITDA is such a commonly used number when looking at financial results since Net Income includes way too many infrastructure related expenses and doesn't reflect (so the story goes) properly the current operations of a company, especially those in very capital intensive industries that would have much higher Depreciation (the D) and Interest (the I), etc. than other companies.

[Vllad]

Wal-Mart greeters are friendly old people. Best Buy greeters are thugs who make certain that you know that they know that you are a shoplifter.

I love the exit greeters. At my size I always just ingnore them when they want to see my receit. I don't wait in line to exit I just walk out and some puny kid typically makes a very small attempt to stop me than they just let me go.


Exit greeters are kind of like the TSA. The concept may discourage theft but mostly it just irratates customers.

[Vllad]

It would be an interesting question for Vllad. I assume that Amazon has some very sweet deals when it comes to shipping from its distribution centers. If I recall, there is cost reduction for a company that does more of the up front work, such as sorting bar codes etc.

Actually we do that work up front for them which seperates them from the Wal-Marts of the world. They get decent rates but not anywhere close to Wal-Mart, Staples, etc.

Amazon saves money by not paying for long term staff in their supply chain. Surprsingly other big retailers could learn alot from them. However Amazon also doesn't have to feed a chain of stores so the DC abilities aren't the same.

That reliance on DC's means they spend less on transportation therefore by default their leverage is less.

[Vanraw]

Thats interesting. I guess they have a good formula for thwe prime cost averaging out shipping cost across everyone.

[Vllad]

Thats interesting. I guess they have a good formula for thwe prime cost averaging out shipping cost across everyone.

Yep.

Empolyee's actually cost more than the shipping cost. You sustain shipping cost no matter what so at best you can get a 10% to 15% difference in cost. That isn't anywhere as extreme as not carrying an extra 300 to 1000 employee's.

[Kakarat]

Another note, the Wal-marts pay for shipping upfront(before product is sold). Amazon doesn't pay for shipping until the product is sold.