Unstable Prices at Newegg??
- Thread starter joeswm8
- Start date
Jet
VIP Member
$20 for a Zalman cooler? I wouldn't think they'd be that much. Prices will always fluctuate up and down, depending on what the bulk prices are for a given day.
Have you ever been on the vendor end of things? For us buying parts is a crapshoot. Prices change daily. Every day my mailbox is full of pricelists from various suppliers, and then their weekly updates. It's ridiculous. The majority of suppliers are Chinese, and they will slash your proverbial "throat" in a second to outsell you (don't get me wrong, they're the nicest people in the world, but when it comes down to it, business is business). It's all about volume. I go through so many reps it's retarded, because they get fired for not moving enough product.
On top of that the market is intensely competitive. If you hope to sell anything on a broad scale you have to constantly adjust your prices to keep up with the competition. I don't do this. You either buy from me or you don't. I offer superior service (in fact I even deliver and do all warranty work on site. The client never has to leave their office), so I don't price match, but a considerable number of vendors do. Obviously Newegg is one of them.
EDIT: Here's an example. RAM.. It's exactly like gas. Supply and demand. RAM prices go up and down daily. It's up to the vendor if they adjust prices accordingly. I used to have a whiteboard where I would write the prices down because they changed so much. Again, I don't do that now.
On top of that the market is intensely competitive. If you hope to sell anything on a broad scale you have to constantly adjust your prices to keep up with the competition. I don't do this. You either buy from me or you don't. I offer superior service (in fact I even deliver and do all warranty work on site. The client never has to leave their office), so I don't price match, but a considerable number of vendors do. Obviously Newegg is one of them.
EDIT: Here's an example. RAM.. It's exactly like gas. Supply and demand. RAM prices go up and down daily. It's up to the vendor if they adjust prices accordingly. I used to have a whiteboard where I would write the prices down because they changed so much. Again, I don't do that now.
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It's not usually that dramatic. A few dollars here and there would be about right. Processor prices drop pretty much weekly. Harddrives fall much slower. Things that stay pretty constant are PSUs, optical drives, motherboards and cases. Stuff like that.
But see, the deal is that the supplier wants to move volume like I said. Say you place an order for 1000 pieces on day 1 of your work week. They will give you x% discount per unit. Say on day 2 you order 2000 pieces. You can negotiate a greater discount and chances are pretty much guaranteed that they'll give you a few more points per unit. So now you can drop your selling price.
See how that works? You buy 5 units, you might see a couple of points on the buck if you're lucky. You buy 1000 units, you might see 5 or even 10 (well, that might be pushing it) points on the buck. That's how Newegg undercuts the little VAR on the corner. Volume discounts.
Not only that, we get incentives and rebates from companies like Intel. Bloody hell, that guy calls me once a week, I swear. It gets annoying. I have Team Tek calling me up to twice a day to bug me. I don't even answer the phone when they call anymore. I'm tired of getting hounded by suppliers to send me price lists, catalogues and dealer apps. Geez. Those ink cartridge people are really aggressive as well.
But see, the deal is that the supplier wants to move volume like I said. Say you place an order for 1000 pieces on day 1 of your work week. They will give you x% discount per unit. Say on day 2 you order 2000 pieces. You can negotiate a greater discount and chances are pretty much guaranteed that they'll give you a few more points per unit. So now you can drop your selling price.
See how that works? You buy 5 units, you might see a couple of points on the buck if you're lucky. You buy 1000 units, you might see 5 or even 10 (well, that might be pushing it) points on the buck. That's how Newegg undercuts the little VAR on the corner. Volume discounts.
Not only that, we get incentives and rebates from companies like Intel. Bloody hell, that guy calls me once a week, I swear. It gets annoying. I have Team Tek calling me up to twice a day to bug me. I don't even answer the phone when they call anymore. I'm tired of getting hounded by suppliers to send me price lists, catalogues and dealer apps. Geez. Those ink cartridge people are really aggressive as well.
It depends on supply and demand. Are the manufacturers moving enough product? Are they overstocked with product? Are the suppliers moving product, or are they stuck with a warehouse full? Are the vendors moving product? Or are they stuck with warehouses full.
What will most likely happen, and this is my prediction, is that the manufacturers are slowing down production. The suppliers aren't ordering in as much product, and the big vendors like Newegg will be slowing down purchasing soon enough. Prices will stay relatively stable after the January sales. Newegg and the likes make enough volume to stay afloat. February and March are always hideous months for vendors. We have to factor that into the equation and hope to move enough product the rest of the year to cover it.
You will see sales pop up on various products of course, but across the board you won't see anything too remarkable I don't think. Suppliers aren't going to be carrying a lot of stock, so the little guy isn't going to get much of a break on a handful of pieces, and we can't buy volume that time of the year or we get stuck with it.
However, if all of a sudden people spring a stiffy for computer parts and start ordering like mad, Newegg is going to be screwed. They're going to go back to the suppliers demanding more product. The suppliers are going to have to go back to the manufacturers via their reps and demand more product. The supply won't meet the demand, so the manufacturers are going to bump prices. The supplier is going to have to bump prices to make money. The vendor will have to turn around and bump their prices to reflect the hike in cost.
You have a better chance of seeing snowflakes in Hades than that though to be honest. After January prices are going to go back up to pretty much normal.
What will most likely happen, and this is my prediction, is that the manufacturers are slowing down production. The suppliers aren't ordering in as much product, and the big vendors like Newegg will be slowing down purchasing soon enough. Prices will stay relatively stable after the January sales. Newegg and the likes make enough volume to stay afloat. February and March are always hideous months for vendors. We have to factor that into the equation and hope to move enough product the rest of the year to cover it.
You will see sales pop up on various products of course, but across the board you won't see anything too remarkable I don't think. Suppliers aren't going to be carrying a lot of stock, so the little guy isn't going to get much of a break on a handful of pieces, and we can't buy volume that time of the year or we get stuck with it.
However, if all of a sudden people spring a stiffy for computer parts and start ordering like mad, Newegg is going to be screwed. They're going to go back to the suppliers demanding more product. The suppliers are going to have to go back to the manufacturers via their reps and demand more product. The supply won't meet the demand, so the manufacturers are going to bump prices. The supplier is going to have to bump prices to make money. The vendor will have to turn around and bump their prices to reflect the hike in cost.
You have a better chance of seeing snowflakes in Hades than that though to be honest. After January prices are going to go back up to pretty much normal.
No, right now demand is probably either meeting or exceeding supply. This is the Commercemas rush and it's a gold mine for vendors. Cha-ching. At the same time it's a very nasty market. Vendors will kidnap your dog to make sure they outsell you. So it's an attractive time to buy. But...
The real time to buy is during the Boxing Week sales. You think they're nasty now... Boxing week sales are there for a reason. They get rid of dead stock built up before Commercemas. It's a shit time for the distribution chain, but it's a bonus opportunity for consumers. The only guy that makes any real money during that time frame is the manufacturer's middle man. Of course any incentives and rebates afforded to the vendor we jump on and pass those savings onto the consumer and pocket the profit, but all in all it's about getting rid of dead stock.
Nobody wants to get stuck with product. It's better to take a hit and dump it. See, you can take a hit now, or you can get your ass kicked on it in March when it isn't worth 50 cents. I've made that mistake before. Dead stock costs you money. So you blow it off, make room for new product and reduce your overhead. You know how they say a bird in the hand is worth two in the bush? Well 50 bucks in your pocket is worth 100 on the shelf.
The real time to buy is during the Boxing Week sales. You think they're nasty now... Boxing week sales are there for a reason. They get rid of dead stock built up before Commercemas. It's a shit time for the distribution chain, but it's a bonus opportunity for consumers. The only guy that makes any real money during that time frame is the manufacturer's middle man. Of course any incentives and rebates afforded to the vendor we jump on and pass those savings onto the consumer and pocket the profit, but all in all it's about getting rid of dead stock.
Nobody wants to get stuck with product. It's better to take a hit and dump it. See, you can take a hit now, or you can get your ass kicked on it in March when it isn't worth 50 cents. I've made that mistake before. Dead stock costs you money. So you blow it off, make room for new product and reduce your overhead. You know how they say a bird in the hand is worth two in the bush? Well 50 bucks in your pocket is worth 100 on the shelf.
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