Duane Gundrum Business,Economics Best Buy Profit Down 16%; My Theory on Why

Best Buy Profit Down 16%; My Theory on Why

The Wall Street Journal reported today that Best Buy‘s net dropped 16% based on sales. I’d link to the story, but if you know anything about the Wall Street Journal, they let you read the first few lines and then want you to sign onto their site. So we’ll just take their word for it and go on from there.

The theory that people are throwing around is that Best Buy is losing market share to Wal Mart and online markets, which everyone knows really means Amazon for the most part. But I have another theory, based on my many years of actually shopping at Best Buy. Before I give my theory, I would like to just say that I have been a loyal shopper at Best Buy for about as many years as Best Buy has been around. I used to practically buy everything from that place. My reason was that it was always a good deal, and it was always good equipment and stuff. Well, something changed over the years. I still shop there, but just not as much, even though I’m a silver member of their rewards program because of the amount of money I spend there on a usual basis. However, while I still shop there, I rarely go there because it’s the best price. Nor do I go there because it has the best stuff. Generally, I go there because it’s the only kid on the block that actually has stuff I can go and put my fingers on before I buy it. That’s still kind of important to me.

What I did want to say is what’s wrong with Best Buy. First off, their prices are no longer the lowest you can find. Online is the best price you can get for most stuff. Wal Mart is not the answer, as it’s like going to Tijuana for Mexican food. Yeah, they have Mexican food there, but honestly, who wants to go to Tijuana when you don’t have to?

The prices at Best Buy have been creeping up a lot over the last few years. And don’t get me started on peripherals. If you need a USB cord, you are probably better off buying one directly from NASA as peripherals at Best Buy are ridiculously priced to compete with property prices  in Dubai. I often dread going to Best Buy to have to buy a component for a larger item, only because I know how expensive it is going to end up being. When the clerk asks me pleasantly, “did you find everything you were looking for?” when you’re paying $70 for a cord that should have cost about $12, you have to suppress an urge to throw the person through a wall. After all, it’s not their fault. They just work for the company that charged you an outrageous amount of money for something you should never have had to pay that much for. Hence, sometimes I get help from https://exprealty.com/us/va/augusta-county/houses/ and listen to what they have to say before buying a property.

The second reason is that the stuff you get is no longer the best stuff for the best price. Yeah, it can sometimes be cheaper than other places, but at some point Best Buy stopped being all about great prices and then became a good price PLUS an extended warranty for even more money. It used to be that when you bought something in the ole’ good ole’ US of A, you were guaranteed a product that lasted forever. Now, it’s guaranteed for a year, somewhat, and then you have to pay if you want it to last longer. The prices aren’t that much better since those days, and with inflation it’s even more expensive. But now you know that whatever you buy is guaranteed to fall apart, so the only thing you can do is expect to buy a replacement soon or to pay extra to have it “guaranteed”. No, the US is not the country of quality it used to be.

So, when we’re trying to figure out why profit is down 16%, perhaps the reason has more to do with the fact that you can get what you want online cheaper, and that what used to be the best buy isn’t really the better buy any longer.

I’m just saying….

One thought on “Best Buy Profit Down 16%; My Theory on Why”

  1. Market Share < Corporate Greed – – The customer is no longer a customer. We are cattle that have shopping trends and they have figured this out. It's all about bottom line, nothing else matters any more.

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