Gather 'round, boys and girls, for I have a ghost story to tell. Once upon a time, in days of yore, chain stores dotted the land. There were Best Buys and Targets and Walmarts. Even Circuit City stores had yet to find their way to the Great Mall in the Sky.
These were the days before the Internet, before the people had choices, when all the commoners in the land relied on, nay, even trusted, their local retail establishments.
But then came the Internet and online commerce, and the peasants now had choice. They weren't limited to buying just what was available within driving distance. They could, you know, surf, and they could learn.
And learn they did. The little people, peasants, commoners alike, learned that they could go online to order stuff. And they learned that the stuff was often more plentiful and often less expensive than in the chain stores. And the peasants ordered from The Online and it was good.
Except, perhaps, it wasn't so good for the chain stores, which have yet to learn their lesson. Many chain stores are destined for death. Behold, whilst I mix a metaphor and submit to the court Exhibit A: HDMI cables.
Those shmucks in retail
So, this weekend, I had a cable failure. I have a TV that's about 20 feet or so from my HDMI switcher. As it turns out, this cable often gets moved, so it eventually failed. My wife decided to take a quick run to the Walmart (at 2am, of course) to pick up a replacement cable. She didn't find a 25-footer, but she did find two 12-foot cables that could be connected together.
Total price, not counting the connector: $112 (that's $56 per 12-foot cable). In other words, holy s@#t! Fortunately, Walmart has an exceptional return policy, which is why Walmart is not likely to go the way of Circuit City and, almost undoubtedly, Best Buy.
Now, I've been buying HDMI cables for years, but I buy online and they're relatively cheap. On the other hand, family and friends often complain about how insanely expensive HDMI cables are, because they've bought cables in local chain stores. They've told me they feel they have to pay the price because they want to play their PS3s, their new HDTVs, and so forth.
This got me to thinking. What's the difference in price between retail and online for HDMI cables?
In other words, just how much is retail ripping off the local buyer?
The answer is mind-blowing.
I looked at Target, Walmart, GameStop, and Best Buy. Best Buy's prices belied the name, in that they were fully insane. But let's start with merely overpriced.
Target charges $27 for a single, 6-foot cable. Walmart charges $27, and GameStop charges $29.99 for a PS3-branded 6-foot cable. By contrast, you can get a 6-foot HDMI cable online for $3.50 from Monoprice.
In other words, the retailers charge seven times more.
I already told you about the $112 it cost to cobble together a 24-foot cable run with cables from Walmart. A 25-foot cable from Monoprice was $16.83. I actually ordered a $25-foot cable from Amazon for under $10. Again, we're looking at about seven times more expensive from the retailers.
And then we get to Best Buy. You're going to need to sit down for this. Best Buy does offer 6-foot cables for as low as $24 (when they're in stock), but check these prices out.
Best Buy sells a house-brand 3.3-foot cable for $495.99! You can get a 3-foot cable from Monoprice for $2.50. That's not a typo. Best Buy lists a cable that's almost two hundred times more expensive.
Yes, that's nearly $500 for a three-foot cable. Yowzah!
If you want a 65-foot cable, Best Buy wants to charge you $1,089.99. For the record, you can get a 75-foot cable from Monoprice for $53.77. Not $1,089. Nope. $53.
Do you seriously believe there are 5-star reviews for this overprice cable? Yeah, me neither. Either that, or there really is a sucker born every minute.
The sad thing is retailers are duping some good-doobie customers into these prices by claiming that these insanely overpriced cables provide higher quality signals. Many customers don't know any better and just want to get the best they can. Retailers know this, prey on customers' good intentions, and -- to be blunt -- are ripping off their customers.
HDMI retail pricing is particularly egregious in this regard.
Faced with drooping margins in home electronics, many retailers are trying to make up that profit drop through accessories. After all, why sell something for $2.50 if you can talk someone into paying almost $500 for it, right?
Most consumers don't know about Monoprice (or many of the other excellent online suppliers of electronics gear). But while most people don't know about Monoprice, almost everyone knows about Amazon.
You know what most consumers also understand really well? Getting ripped off.
Sure, Best Buy is welcome to charge whatever they want for their products, but by now, many consumers have figured out what's going on. When the local retailer sells a cable for more than a thousand bucks that you can get online for fifty, it becomes an obvious choice where to buy.
Most of us will accept a small price jump for the convenience of buying locally. We'll even accept a small price jump for the convenience of buying from Walmart at 2am.
But a small premium might be 10%. Once you start charging seven to twenty times more, 700% to 2,000% more, all bets are off. We're not going to buy retail. We'll buy online.
And, next time, before we bother to get in the car, use gas, and drive 20-minutes each way, we're going to go online first.
Retailers, you're not losing the fight with online because online is better. You're ultimately losing the fight with online because you're losing our trust.