How many of you go to Costco to purchase milk that is couple of dollars less than other stores? How many of you turn your vehicle to go to the gas pump on the other side of the road just because the gas price is few cents lesser than the other pumps?
Well, we have a <to be filled>
If not us there are many people who do the above and/or other similar things just to save few dollars or cents. This tells us how price sensitive are the consumers. Economist’s term this as “elastic” demand. In other words, a decrease in price, lets say 1%, dramatically increases the demand for the product by more than 1%. This price sensitivity causes many of us to shop for lower prices and as an effect we end up buying more items online i.e., over web.
Well, Fellow toastmasters, friends and guests … Good evening … today I am going to talk about web buying, what are its traps and some tips to avoid these traps. Throughout this speech I’ll use online buying and web buying interchangeably and they mean the same. The content of this speech is primarily from my own experience when I shopped to purchase a digital SLR camera last month. Hence, the examples or references I use in this speech will revolve around the camera.
Now, let me ask a question that I answered at the beginning of this speech. Why do we buy online?
Reasons:
You could shop anytime (24x7) and anywhere in the world through online. That’s is the convenience online shopping offers us and this is one of the reason for online shopping. However, I believe, the most important reason for web shopping is low price. When I wanted to purchase the camera I checked the price at a physical shop in Bay area and the price with tax is 865$ …
Can anyone guess the online price for the same product? I could find the price as low as ... 305$ … No tax, Free shipping … which is approximately 65% less than the previous price … Great deal isn’t it? How could they offer such a low price?
Online shops could operate in a Garage or a warehouse … no costly showrooms, sales people, etc. But those alone cannot offer such an incredibly low price … so, what is the “catch”? I hope this question would have popped up in most of our minds.
This rang a bell and I googled the web and found an informative article on this topic, which I am going to share with you for next few minutes.
Traps:
Bait and Stuff - They attract shoppers with a low price item and stuff accessories and these are steeply priced and this is where they make more money … Most of the online shops sell these items in various packages and a camera with some “starter kit” could cost as much as 1500$ …
They also make money on shipping – Next day shipping costs more than 50$ in many of these sites … whereas a S&H price at genuine shop is 12$ ….
You could think, I could just buy the main item and purchase accessories elsewhere … If you say so, then they mention that this is an ‘international’ version and it takes 5 to 14 weeks for delivery … 3 months …
Gray market goods – intended to be sold cheaply in other countries … Some could say … Ok, I can live with it … but the real catch is in case your product breaks, then you don’t get manufacturer warranty and you need to spend more bucks post sales to repair it … A minor repair could cost as little as 100$ … (bent CF card pins), which is more than 1/3 of original camera price … Also no mail-in rebate …
Follow-up calls – to confirm the shipment … they pursue you to purchase the “kit” … worst is the “kit” contains the items that comes standard with the product … Return might be harder …
I heard from one salesperson in Ritz camera they some shopper rip-off all the accessories that come standard with the product like battery, charger and sell the stuff that doesn’t work standalone … I term it as “skeleton selling” … they rip off the skin and flesh …
Scary, yet this is the reality … Now, I am going to offer some tips to buy online from a genuine shop …
Tips:
Ratings and consumer reviews – they could start in other names … most of these shops are located in New York – Brooklyn … and they are related …
Check at agencies for the status or validity of the shop … DCA (Dept of consumer affairs), BBB online …
Check whether they offer “US warranty” … Check manufacturer’s site or call them up and check whether online shop is an authorized dealer …
Incredibly low price should ring a bell … Avoid accessories
Conclusion …
I am going to conclude my speech by quoting my personal experience and how did I incorporate the above-mentioned tips. I wanted to purchase Canon Rebel XT with a custom lens … the cost is 1375$ without tax … First, I checked BBB online for the shops that offered low price and I did not find a +ve report … After knocking off these false sites, I ended up with the site where the price is little less than the physical shop … Second, I went to Canon site and looked for authorized dealers … I found couple of them who offered low prices in California … for CA sellers, you need to pay sales tax 8.25% … then I searched for dealers in different region and I found an authorized dealer in IL who offered the same product for 1043$ … no tax and free 3-day shipping … that’s roughly 30% saving for the same product … Btw, I got my camera in 2 days J … I hope these tips will get you a good deal for your next or future purchase or at least save you from falling into an online trap …
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Copy of this presentation can be found here.
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