Time To Buy Online Retailers?
Online retailers have been fairing better than their brick-and-mortar counterparts. One school of thought is that affluent buyers make up a bigger portion of online buyers and they fare better during recessions, which means online retailers are likely to do better.
Another line of reasoning suggests that there is a perception among buyers that there are better deals online than in stores. So its the bargain hunting, not the higher incomes that is driving people to shop online. I think there’s some truth to this.
Last week, I needed to replace the battery on my motorola KRZR cellphone. The battery was no longer holding charge and had developed a slight bulge in the middle as well. I went to the Verizon store and they told me I was out of luck, and would have to buy a new battery for $40 plus tax.
Instead, I bought a cellphone battery online for only $6.41 delivered! I had to wait 2 days, but I got a whopping 85% discount!!!
For some reasons, retailers think that replacement batteries should cost 40-50% of the cost of a new electronic item. If you’re willing to spend a few minutes doing the research and wait 2-3 days, then you can usually save at least 60% of the cost. Now whether your time is worth that 60% in savings is another question.
Incidentally, that battery link goes to a niche store I built initially to buy cheap iPod batteries, which cost a ridiculous $79 plus tax at the local Apple store. I bought my battery replacement kit for $20 online instead!
But getting back to my main point, I think that with inflation eroding the purchasing power of the average American, more people will turn to online shopping. And with gas prices being so high, people are more likely to limit they’re driving to the mall.
So there are two lessons to learn here.
1. If you own stocks of retail stores, ditch them and buy online retailers instead.
2. Look online for bargains.
Maybe it’s time to look at Amazon’s stock (AMZN)?
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June 17th, 2008 at 9:49 am
We just bought a new cell phone battery online for $15 delivered instead of $40 in the store. Incidentally, I’ve noticed that my Amazon conversions are up this month. Hmmmm….
June 17th, 2008 at 11:12 am
I knew that cell phone batteries were ridiculously expensive to buy from the original retailer, but I had no idea you could score a deal like you did!
Definitely think that current energy costs should help online retailers, especially for people in situations such as mine. It’s almost 100 miles round trip to the nearest big box store or mall, and it costs a lot to make that trip. I’m definitely willing to shop online: often the shipping costs are covered by the savings on the product anyway.
June 18th, 2008 at 10:20 am
I always buy/sell books on amazon. They get a ridiculously high commission from the seller just for the listing. That’s passive income!
June 19th, 2008 at 9:01 am
Good read. I had the same experience with my sell phone battery. They told me they didn’t make them anymore and I would have to extend my plan and buy a new phone. Found a battery online for about $10.
Best Wishes,
D4L
June 30th, 2008 at 5:01 am
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June 30th, 2008 at 5:24 pm
Just a quick note to let you know your article will be included in the 66th Money Stories Carnival.
The post will go live midnightish PST at http://mygoodcents.net
Thanks!
June 30th, 2008 at 11:05 pm
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