Shopping in Singapore

[timebomb]

You know, when you want to buy an expensive product, they say it's best if you shop around. A couple of weeks ago, I decided to buy a TV. Unlike before where this is a simple exercise, these days you have to first understand the differences between LCD, Plasma, LED etc. I'm not a technical person so it took me a while to understand what it is all about. After listening to lots of advice from the experts, I decided to buy a 47" LCD TV from LG. So I started to shop around.

Gain City which is just at the foot of my block sells this TV for $2399. I've been a regular customer of Gain City for years and I trust their prices. I know the same TV could probably be found cheaper in some other electronic stores but I didn't think the difference would be much. I was expecting maybe something in the region of $50 or so. I thought it wouldn't be worth the hassle checking out the other stores but my daughter said I should.

So I did.

I saw an ad from BestDenki in the press and they were advertising a 47" LCD TV for only $1999. On top of that, anyone who buys the TV gets to choose another 2 free electrical products. Wow!! I thought - It's a deal that is too good to be true. Surely, it can't be a LG TV. Must be some lousy brand that they want to get rid of.

But no harm checking it out, right? So I went to BestDenki.

And I was shocked!! It's the same TV that Gain City is selling for $2399!! In other words, if I factor in the 2 free gifts (a Panasonic Home Sound System and a Canon Printer), they were cheaper than Gain City by almost a thousand dollars. How can it be? I know the market for electrical and electronic goods is very competitive but still, how can one store sell the same TV cheaper than another store by almost a thousand dollars?

I thought it was too good to be true so I decided to check out other stores. I went to Harvey Norman and the TV there sells for $1999. But no free gift. It's still cheaper than Gain City by $400. My daughter said I better go back to Bestdenki to buy the TV before the offer expires. I was reluctant at first but what the hell.

So I went back to Bestdenki and bought the TV, the Home sound system and the Canon printer for $1999. I thought the price did not include GST but I was wrong.

After putting down the full-payment, I was walking around the store when suddenly, a stranger tapped me on the shoulder. He asked me if I bought the $1999 TV. I thought in my heart, "Die lah. Surely, he's going to tell me that I've been scammed or something". To my surprise, he said he also bought the same set. And he didn't just buy one, he bought 2. He told me he's been shopping around too and he was sure what Bestdenki offers is the best deal. He said Courts sell the same TV for $2999 and Audio House (which is known to be always the cheapest) is asking for $2399, the same price as Gain City.

I find this all hard to understand. How can the prices differ by such a huge margin?

I may have found the answer today though. I checked the papers and this morning, Courts has an ad that says it's selling the same TV for only $1499. Damn, I should have waited for one more day.

[bossteck]

Is the offer at Bestdenki and Courts one of those "limited to first 5 sets per store" kind of thing?

[blue33]

LOL... those limited to 5 set thing sure hard to get, i mean you properly have to queue from early morning. From what i know, those LG LCD TV dont last long also, they down easily.

[timebomb]

The one from Courts is limited to a certain number of sets - 8 at their main store and 5 at their other stores.

But the offer from Bestdenki is not limited. Offer expires tomorrow though.

[Shadow]

maybe discontinue model, trying to clear stock.

[BFG]

Enjoy what you have purchase my friend .

[gyjd]

that's why i make it a point not to compare price after i made purchase...and you forgot to factor in the cost of your free gifts, plus you do not have to queue for those limited sets in Courts...

[felix_fx2]

It may have been a hidden limited "soon to be dis-con model" that likely may have been the reason. That's why the big price difference, But still you have to know you might have bought a product that was on the shelves without revision in price.

My 2nd job after army was a evil job, selling Datamini PCs @ Courts,Safe & Harvey Norman.

Some models NEVER change price, their impossible to sell laptops has "100-150" commission. From day 1 i join till i resigned 8 months later the price was never changed.

Note: You can do a quick internet search for price before buying, it never hurts. The last time i did that for my Sony S-series i saved $100 (Its only 20'' but have the needed ports.)

[timebomb]

I still don't get it. Many friends told me that the TV I bought is probably a "soon to be discontinued" model, hence the huge difference in price among the various stores. But if this is true, all the stores would be offering the TV at hugely discounted prices and not just Bestdenki. Yes, it could be that Bestdenki was simply the first to offer the huge discount but I monitored the prices for more than a month after I bought the TV and Bestdenki's price was consistently far lower than the rest. In fact, Gain City continued to sell the same model for $2399 more than a month after I bought it for $1999 from Bestdenki.

I helped my wife run a grocery store for more than 10 years and I believe I know how the market works. My wife's store is just a small kiosk. NTUC's toilet is probably bigger than her whole store. NTUC would probably order sardines by the hundreds of cartons whereas my wife can only afford to order one carton at a time. So it's inevitable that NTUC's prices are usually lower than my wife's. But not by huge margins. My wife may sell a can of sardines for $2.40; NTUC would probably sell it for $2.20 and ShengSiong may sell it for $2.10 which for my wife, is probably her cost price. But that's all that is to it. You won't find NTUC or ShengSiong selling the same can of sardines at $1.40. There can't be such a huge difference in price because if there is, my wife will call the supplier of the sardines and complain. Yes, I know, hers is just a small store and she has little bargaining power but suppliers know that if you piss off all the small stores in Singapore, they will stop selling their products. Small though they may be, collectively, they are a force to reckon with.

So you see what I mean. GainCity and Audiohouse are smaller than BestDenki but not much smaller. Why didn't they (Gaincity and Audiohouse) kicked up a fuss with LG when Bestdenki sold the TV at almost a thousand dollars lower?

That's the part I don't understand.

Give you another example - A couple of fish shops in Singapore sell their Eheim filters at lower prices (about 10%) than others. You know, Eheim itself is not happy with this but there's little they can do about it. That, however is the main reason many fish shops in Singapore don't want to sell Eheim products. Because they feel that if Eheim cannot prevent undercutting, they might as well not sell their products at all.

So again, my question - why are Gaincity and Audiohouse still selling LG products when Bestdenki's prices are so much lower than theirs?

Loh K L

[hwchoy]

there is also the rebate system to consider. many manufacturers offer rebates to the reseller if they can accumulate certain volume in a period of time. Usually this rebate is across the board for a brand. So in this case Best Denki may have chosen to cut profits on the TVs to nothing and push for volume in order to qualify for the rebate, which may be higher than the profits they are sacrificing on the TVs.

As for the other resellers, they may be unable to qualify for that level of volume discounts, or have another tie up with other brands.

[Blue Whale]

lol...timebomb just been activated.
http://wrightreports.ecnext.com/coms...RICE_C392DA740
http://forums.hardwarezone.com.sg/ar...t-2453049.html
http://www.macusersg.org/forums/inde...;topic=49097.0

I am too dumb, maybe you all can make out what the three links means. hee.

[timebomb]

Usually this rebate is across the board for a brand. So in this case Best Denki may have chosen to cut profits on the TVs to nothing

You're probably right, Choy. But then again, if that is what Bestdenki did - cut their profits to zero - I would be very surprised that they work on such huge margins.

Loh K L

l
http://wrightreports.ecnext.com/coms...RICE_C392DA740
http://forums.hardwarezone.com.sg/ar...t-2453049.html
http://www.macusersg.org/forums/inde...;topic=49097.0

Thanks for the links, Blue Whale. But they aren't of much help. The first link gives an analysis of BestDenki's stock price. The second one gives a comparison between service standards and prices between the various stores. The third one carries some discussion on Apple products and it reinforces what I indicated earlier - that an established brand will not let their retailers undercut one another.

Loh K L

[tawauboy]

typically, for consumer electronics, retailers expect a margin of more than 30% at recommended retail price (rrp).

on top of rebates, some bigger retailers may get consignment terms.

[Blue Whale]

Precisely, being in business yourself, you should know how competitive it is.

The gift you mentioned. The price you mentioned. You are not alone. Your fellow singaporean have the same query. Everyone concludes. However, what was not discuss is also the source. E.g. Sony product might be coming from Japan or Malaysia. Hewlett Packard product might be coming from China, Singapore, Japan, just reading the serialno will give you some ideas already. Each of these cost price will differ from one another, the amount of tax applied, the amount applied to transport, number of modes of transport, etc.

Wouldn't polyart try to outdo the other shop at C328? I think so. Wouldn't the old couple try to outdo polyart? I think so too. Give both shops at C328 having lowered price, would it not have impact on Aqua Star Trading that is far far away from Clementi? I think so too.

Today if you have purchase it at the last consumer product exhibition (Even Sitex), would the price have been different. I think so even so too. Even day 1 and day 3 price will differ. =) End of the day, you never win.

Just make sure your source is reliable, you pay for something that could last. You can sit back and enjoy. Appreciate that and achive calmness in yourself. You have done it and could do it again, maybe other people wants to do it but do not have the financial means. What more do you ask for then? Feel content, achive calmness, sit back watch over your fish, then move over to your tv. Another sales come along, you just say "ha ha..another one?" Just tose the paper one side and continue to enjoy the show that you like.

[timebomb]

However, what was not discuss is also the source. E.g. Sony product might be coming from Japan or Malaysia.

I'm well aware that the source could be the reason. Parallel imports are common in Singapore. ShengSiong was (and still is, I think) a big-time parallel importer when they were just a small provision shop in Ang Mo Kio. Even Borneo Motors who distribute Toyota cars have to compete with many parallel importers. But is Bestdenki a parallel importer of LG products? I'm not sure but I don't think so.

Wouldn't polyart try to outdo the other shop at C328? I think so. Wouldn't the old couple try to outdo polyart? I think so too. Give both shops at C328 having lowered price, would it not have impact on Aqua Star Trading that is far far away from Clementi? I think so too.

What you wrote about the intense competition between the various fish shops is exactly what puzzles me about the huge price difference on the TV between Bestdenki and Gain City. With intense competition, prices should not differ by huge margins. The distance between the various shops is not a factor at all and the shops know this. Singapore is small and people will go where it is the cheapest.

Today if you have purchase it at the last consumer product exhibition (Even Sitex), would the price have been different. I think so even so too. Even day 1 and day 3 price will differ. =) End of the day, you never win.

Yes, I'm quite sure it would be cheaper still now. But I'm not bothered about winning or losing. In fact, I'm quite pleased with my purchase. I'm just curious. I just want to better understand how the electronics market works. Tawauboy mentioned that the profit margin for electronic goods is 30%. I would say that's a huge margin, far higher than what I expected. It could be, as Choy pointed out earlier, than Bestdenki was willing to forgo its profits in return for better rebates from the supplier.

Loh K L

[hwchoy]

30% is from RRP, nobody sells at RRP.