October 5, 2007

How to Buy electronics.

The art of scamming...errr selling

This is the reason people get ripped off in electronics stores. You have customers who walk in and don't know what it is they need, so they depend on the sales staff to tell them what they should get that will fit their needs. But instead, the sales person sells them what fits the sales persons needs, and there need to is meet a sales quota and make their commission.

I know what you are going to say. "But I asked the salesmen and they said they don't get commission". Now this was true...sort of. Stores like CompUSA don't have commission. What they do have are called Spiffs. A Spiff is a cash incentive in place to sell a particular item. The amount of a Spiff will vary from product to product and it is a way to get sales people to sell a particular item. For instance, I have seen TVs on clearance that the store is trying really hard to get rid of before the new model comes out. Because the urgency of trying to get them out the store, the management decides to attach a huge amount (I've seem Spiff's up to $100+) to encourage sales men to get rid of a particular product.

Warranties? you bet they have a Spiff attached. Typically the Spiff is about 10% of the cost of the warranty. Sign ups for digital services? Yup...they have them to. Some companies even offer a reoccurring Spiff on services that have a monthly fee associated with them. So as long as that customer is stays a customer, the sales men gets that Spiff each month.

Spiff's are a great incentive to sell a particular item, but so are threats. Retail companies due set quotas for their sales people. And when those quota's aren't reached, the employee get punished. Some frequent punishments are getting written up (stays on record and effects future raises), mandatory sales training (usually held nice and early on a Saturday or Sunday morning before the store opens), having to do stupid and kind of demeaning things (like wear a sand which sign, or a silly button or hat). So to avoid these punishments, sales people will do everything they can to make sales. On a slow day, they need big ticket items to hit their numbers, (You you have 5 customers and your quota is 5k they need to buy 1 k each. If you have 10 customers and your quota is 5k they only need to buy 500 worth of stuff).

Salesmen also deal with sales policies that are drilled down their throat like "SWAT" (Sell What is Available Today) which basically means, screw the customer if we don't have what best suits their needs. And they have steps they MUST go through with every transaction. So don't get mad at the sales person who asks you if you want the warranty, they have to ask, or they get in trouble. They also have to ask you if you want a whole bunch of accessories. The company sends secret shoppers that come in and take notes on the sales person. They make sure the sales person takes each step, and does it right. If they miss a step, or the shopper doesn't think they did it well enough..they get written up.

So when your options are "help the customer get what they need" or "work on the weekend/get written up" and "make more money" which do you pick? typically it goes "make money" then "don't get in trouble" and finally "help customers get what they need"

Now don't get me wrong, there are some good sales people who really do want to help the customer. Most of these guys are older and plan on being at their jobs for a while. They also typically have a higher hourly pay or a salary to keep them a float when sales are slow. These are the guys you want helping you. They will make sure you are taken care of (in a good way) And these guys also to make a good steady amount of money because they get referrals from good customers and have repeat customers. They dont make the most amount of money though.

The guys you want to avoid at all cost are the ones there to just make cash, and to make it fast. They will say just about anything to get you out the door with the most product in the least amount of time. They want to "help" as many people in a day as possible and can be really pushy because each customer is a bit more money. They will tell you need the best of everything, I bet you didn't know you need that media center computer, with a 500GB hard drive 4 Gb of RAM, and Blu-Ray burner just to check email. Well this guy will make sure you know it. He will also tell you setting this thing up is really complex, and nearly impossible for some people (sure if that person is blind and has no arms), he will tell you its well worth the $100 to have some else to come do it.(he gets a Spiff if they do)

So how do you protect yourself?

It's easy.

  1. First and foremost, do your research. Have an idea of what you want. Know what you plan on doing with your computer. If you know you are just going to be surfing the web and doing basic homework in word or excel, then you don't need all that great of a machine... think about it, both of those tasks can be done on a PDA. So figure out which software you want to use, go to their manufacturer's website and look at what the "system requirements" for that program are. That will give you a guideline for the kind of computer you need.
  2. Once you know what it is you want, shop around. Check online, check advertisements, ask friends who have the equipment you want where they got it. Prices online tend to be lower than an in store price, this is because online stores have fewer staff and much lower overhead than a brick and mortar store, so they don't need to mark a product up so much to make a profit. So expect to pay more in a store, but that doesn't mean you shouldn't look for the best deal.
  3. Get the deal. Shopping for electronics requires a bit of strategy. There are certain times when you can get a good deal. For instance, shopping at the end of the sales period. Managers have quota's too so they want to make their numbers or they don't get their bonuses.

    However, don't go in an expect them to slash the price, and don't demand they do it. I have NEVER given a discount to someone who says "give me 10% off or I'm not buying it". With a request like that, I simply say "have a nice day" and walk off. I have given discounts or given free accessories to people being nice. I know what my sales numbers have to be, I know the margin on a product, and I know what I can discount. A really nice person buying a printer and a replacement plan for it? (yes replacement plans are a good deal Ill explain why in another post) I've given them the USB cable and knocked 10% off ink for them. Why? because ink is about 15% margin, and a USB cable is about 90% margin. So before I ring it out, I drop it to "cost" then take the remainder out of the price of the printer. For the ink, I just cut 10% off. My numbers are squared away and the transaction has no red flags for management to catch and ask me about. I'm not going to get yelled at just to give you a good deal, sorry, I don't care that much. So if I can give you a good deal, and its no skin off my back, then it will be done.
Its that simple, Know what you want, know the prices, and be nice. You will get a good deal from a good person.

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