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IT's Most Outrageous Markups?
masteritrit asks: "I have seen some really outrageous markups from IT companies. Cisco sells memory for a router I have for $1500 bucks and I bought it directly from Kingston for $56 bucks. I also had someone at storagetec accidentally reveal that their standard markup is 700%. What are some examples of this that others have seen and how do you feel about it?"
I would absolutely *LOVE* if someone could tell me how much both USR and retailers are making on external 56k modems:
Future Shop (Canada's version of Best Buy) is selling an external one for $170 CAD (~$120 USD?). It seems hard to believe that the price of one hasn't come down in what, over half a decade?
That $1,500 Cisco memory is, I think, good for everyone - it contributes to Cisco's bottom line by ripping off the ignorant and lazy, thus keeping them from having to raise prices for the rest.
But for a contrasting situation: about 5 years ago I worked for a dominant office-equipment supplier in the Rocky Mountain region (name left out not to protect the guilty, but to avoid self-embarassment...) in their PC/printer repair depot. We outsourced our monitor repairs, and would routinely double whatever the price was - whether it was mainly parts or labor - for no good reason other than that we could. We sold Laserjet fusers for a decent markup - until we changed from geniune HP to remanufactured parts, and kept the prices the same... so a $180 fuser we sold for $215 became a $40 fuser sold for $215... I could go on. They did that 'cos they were sleazy, and I hated working there.
I've been on the lookout for a 4-pin to 4-pin Firewire cable at a decent price for awhile now; usually I see them for a ridiculous $40-$50 most places. Recently when my need became more urgent, I swung by Fry's and found them for $9. That's just a case of buyer-beware - if you're concerned about saving money, make sure you're not being fleeced before plunking down your cash. Do some legwork if the price difference is worth your time.
Another example: inkjet printer makers sell the printers at a loss and make it up by selling carts at inflated prices. That's OK by me, when alternative sources for carts and ink are available. When they started putting ICs into the carts to prevent "counterfeiting", that's where I draw the line, and it turns out that inkjet printers from 2-3 years back (available for dirt cheap on eBay and Craigslist) still work just fine with $3 cartridges (also from eBay)....
The really outrageous markups are in the financial business anyway. $35 because they let your credit card payment check sit for 3 days before processing it? Bah!
Perfectly Normal Industries
Those of us that used to make redboxes ended up paying 25 bucks for the 33 memory tone dialer and another 5 for the new quartz timing crystal. When I was busy making and selling about 50 a week, I found a better source at asiansources.com and started getting them from the same place RadioShack ordered them from for 3 bucks a piece quantity 100 without the lame RadioShack logo on them. The quartz timing crystal I found for 49 cents a piece but I can't remember where. It's been too long. I never could find a great price for mercury switches (the only way to do it right) but my boxes looked completely normal from the outside so they were worth it. :)
For every annoying gentoo user, are three even more annoying anti-gentoo crybabies. Take Yosh from #Gimp for example.
The pack might only sell for 0.25 - but they gotten for about .0025.
I have mod points and I am not afraid to use them
Some big name electronic stores have manager/salesperson quotas on how many extended warranties are sold, with the idea being that you slim your margins on an electronics item, and get it back on the warranty.
The Future Shop stores I've been to here are fairly pushy with their warranties. I purchased a $500 digital camera and was asked twice by the clerk why I didn't want an extended warranty. Then the clerk went to the manager who approached me and asked me why I didn't want a warranty. If the store is doing this for the customer's benefit, then they're most likely not going to bug you about it unless they can get something in return.
So I do take a chance when I go without paying $50 on a $500 camera for 2 more years of warranty, but at the same time, when I use my CC to buy it, my warranty gets doubled by up to a year anyway. What are the odds of it breaking in year 3 as opposed to 1 and 2? On top of that, my $500 camera would probably cost $150 come year 3.
If I found a set of electronic gizmos breaking down in year 3 from a certain manufacturer, I just wouldn't buy from that manufacturer anymore.