http://starbulletin.com/2005/04/02/business/index.html
Rebates going way of the dodo?
MINNEAPOLIS, Minn. » Retailers' love affair with mail-in rebates may
be coming to an end.
Yeah everyone always complains about rebates and there were some
stories about lawsuits or the attorney gen coming down on Office Depot
and Compusa for some rebates that consumers complained about.
However, without them you arent going to see the low prices weve been
getting. People forget but prices stunk real bad in the early 90s. It
was like a sellers mkt.
Even until the mid 90s when the clones seriously started taking over
the prices were better than before but youd go to the computer fair
and maybe get 10-15% off the gross out avg retail price.
The only way you get get 30-50% let alone 80% or even FREE after
rebate is with rebates obviously. They depend on maybe the float and
people forgetting to send them in. With most things selling at thin
profit margins theres no way you are going to see big discounts w/o
rebates. People who think they can pay the rebates back in a few days
with 6 months to send them in or no rebates and 80% off are dreaming.
If I had to pay 80-150 bucks for hard disks let alone higher prices ,
$80 for a 512 stick of mem on sale and $500 for a LCD --- I wouldnt
hardly buy anything compared to what I do spend. I think I spend about
$500-800 a month many times on crud , stuff I may sort of want because
rebates. I get about 50-80% of that back , sometimes 90%. If there
were no rebates a big hardware purchase would be few and far between
and Id hardly ever buy anything for friends and relative just for the
hell of it and Id shift my spending to other things.
You can see it by checking the compusa and other retail hard disk
prices. They sell for outrageous prices and then check the low cost
online retailers who hardly ever give rebates for HDs about the lowest
price these lowest cost sellers sell for is around $80-90 for smaller
disks. You never see a 30-40 buck deal or even a 60-70 deal for a
decent size. And then factor in the influence that rebate sellers
have on the online sellers too --- they have to lower prices lower to
compete against the retailers who offer $40-60 HDs with rebates.
I bought a a 60 gig at Depot for $10 last year, a 160 gig seagate for
$39 , 200 gig WD for $59 , same for a maxtor. I would have had to
spend at least $100 or more for the 200 giggers probably meaning they
would have seemed like fairly big deal purchases which I would have
rarely made. Most would then demand very high quality/reliability
and service and I probably would keep one PC and keep it for a while.
And the high end games mkt would also would impacted as many of the
hardware freaks are also deal freaks and the hundreds of extra bucks
spent on HDs , mem etc would take away the $300-400 on a high end
graphics card , this mkt isnt exactly huge to begin with.
The guns and butter spending pie you see in elementary econ books
talking about gov expenditures ---- on a personal level instead of the
huge slice technology would take and most of the deal hunters I see at
all the sites are primarily buying technology --- would probably shift
dramatically away from technology. Actually youd probably see a big
drop in overall spending and some shift toward services and other
things -- probably more savings. Ive seen people post about the same
type of thing --- spending on yet another harddisk , memory stick ,
etc because they were rebated, even if they didnt really need it at
the moment . If they werent rebated, 80% of the superfluous spending
would disappear.
This may reinforce the inflationary trend. Tech does tend to fall in
price even without rebates obviously but not at quite the furious pace
and thats been a factor in offsetting the higher costs of fuel, food
etc.
