Image courtesy SF Weekly

While we all love lower prices, we seldom consider what it takes in order for those prices to get that low.  Were corners cut?  Employees harmed?  Will these lower prices drive other companies bankrupt?  There’s no reason for us to answer any of these questions while we’re looking at price tags.  Instead we make sure we get the “best” price; no matter what.

Retailers aren’t ignoring this.  Almost all of the commercials I’ve been seeing over the past 6 – 12 months have been talking about lower prices and better value.  The same is true when it comes to HDTVs.  I’ve seen prices drop drastically on televisions whether they were LED, LCD, or Plasma.  Prices have been slashed as much as 40% off of MSRPs for some models over the course of only a few months.  

With the holiday season coming up, people will become more and more attune to the possibility of better pricing with Black Friday and Christmas sales.  Now that Circuit City has closed up shop, two stores have been fighting like cats and dogs to make sure they have the best prices: Best Buy and Walmart.  If you browse a Best Buy ad scan you’ll notice that aggressive prices can be found all over their 24 page circulars.  Walmart has been giving more shelf space to high end televisions in a bid to get customers to think of Walmart when it comes to these high ticket purchases.

These two are both aiming to get as many dollars as possible from their customers during these tough economic times and there’s suspicion that they are squeezing profits on the back of their suppliers.  After all if one of these companies tell you that you need to cut your prices by 10% or else they won’t show up on their shelves or website you take them very very seriously.  By taking the price cut they end up doing harm to their own company.  This series of events usually leads to companies having to close up, go bankrupt, or to lay off employees.

While there isn’t any hard evidence that these two companies are doing this, you have to wonder if these are the only two and if it’s just the retail channel itself trying harder and harder to find a way to profit.  Dell, Amazon, Buy.com and others are all screaming that they not only have the lowest HDTV prices, but also give away free shipping to sweeten the deal.  Customers are being trained to wait and hold for better prices while these price wars leave little room for anyone to benefit.  Suppliers have to give lower quality product in order to make a profit when they sell to retailers demanding the lowest prices.  Retailers who are fighting stores both online and offline have to not only deliver the lowest price but also make sure the purchase don’t get returned so they don’t have to deal with having them come back.  All the while the customer is none the wiser and is just glad for feeling like they got a bargain.

We’ll have to wait and see how expensive those bargains are to the HDTV industry.

[Source: TWICE]