A Tale Of Two Sales

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This weekend was a very busy one for many. It was a demonstration of how free communications changes all the rules except that of human nature. New tools, same people.

If you’ve looked at our front page, you already know about one of them, the Iomega CD-RW on sale at CompUSA.

The other was a 64Mb GeForce2 Ultra being sold for $120 rather than for over $400.

Armies of the Byte

Ecommerce or not, companies pretty much run businesses the way they always have. They sell things, have sales once in a while. A few as an
extra incentive in fairly recent times offer items like price-matching. However, most retail outlets continue to presume that most customers most of the time are mostly ignorant of what the competition has to offer.

In constrast, consumers have gained tremendously from the Internet. Econsumer sites have sprung up all over the place. Some are websites dedicated to finding and informing its readers of bargains, here’s a good example of one of those.

However, even these websites can be too slow. Various forums can literally give you the sales story from the trenches as it develops, as people report what they find out there in the “real” world. And as they do, if there’s a consumer tip or trick of which you’re not aware, you’ll get an education.

If the bargain-hunting websites are the new spy networks of the consumer world, the forums are the spy satellites, giving near real-time reports of who has the goods, who doesn’t, and what policies local places are following.

What I Learned This Holiday Season

I had picked up two Plextor IDE drives for relatives, and was beginning to debate with myself whether or not I should replace my 8X SCSI CD-R with something more modern and rewritable.

I had seen the Iomega mentioned late last week, but didn’t pay it much mind. When the CompUSA circular came in the Sunday paper, I decided to look a little more into it. After a bit, I found out the rebadged Plextor story, and all debate on buying a new burner ended.

Of course, those of you up to speed on the new rules are snickering and thinking to yourselves, “How disgustingly slow.” And you’re right.

As I had previously reported, I went to two CompUSA stores, and found nothing. I didn’t bodyslam a salesperson to get his attention and ask for one; I just figured I’d order online. Which I did.

New Year’s Day, I remembered that some forums like the one I mentioned above tended to be hotbeds of information on sales like these. So I went over there and checked, and got an education.

More on that in a moment, but the two items that registered from reading the forum were:

  • CompUSA might not honor that online purchase, and
  • BestBuy was already offering the drive at the same price.

    A BestBuy recently opened up nearby, and since my neighborhood has never struck me as being the next Silicon Valley, I decided it was worth the walk to look.

    I came, I saw, the shelf was empty. So I hailed down a salesperson, got him in a choke hold, and demanded my drive. No, I just asked, and he went back to look. (OK, I did follow him.) They had, I bought, it’s in the system.

    (Haven’t been able to use the Plextor upgrade trick, but I suspect the Via ATA100 drivers are causing a problem. I’ll try again on another machine later today, but the drive itself works great.)

    I cancelled the CompUSA order, but the website is not ecommerce friendly. You end up sending an email to cancel; I won’t bet that email gets matched up to the order.

    Hi-Tech Hoarding?

    I just got lucky. To those used to the new rules, I was moving at a snail’s pace. The first reference to the Iomega sale in the forum mentioned above was at about 3 AM Friday morning. Somebody saw the Sunday newspaper circulars (which usually get shipped a couple days before the rest of the paper).

    By 11 that morning, someone pointed out that you could buy the drive now and claim a refund due to CompUSA’s price protection. It was quickly confirmed that CompUSA had no buying limit, and Iomega’s rebate was good for up to 10 machines per household.

    By that afternoon, people were already buying it, and others were going to CompUSAs and Best Buys to scout around.

    As the day drew to a close, a connection was made between the Iomega and Plextor drives.

    Saturday, December 30th: People start stocking up on these drives at CompUSA. By mid-afternoon, one person was wondering how the CompUSA stores were going to explain no inventory to the slugs who actually thought sales began on the day they started.

    By that evening, someone had figured out how to hack Plextor firmware to work on the Iomega drive, allowing 32X DAE. They did so after someone with a real Plextor and Iomega opened them up and looked inside. From first mention to product, less than twenty four hours.

    Why do you need five or ten CD-RWs? To sell them on eBay, of course. What’s even better than a $99 CD-RW? Ending up making money from it, that’s what, which somebody was already doing by the wee hours Sunday morning.

    So BEFORE the vast majority of people using old-fashioned print communications would have known about this sale; those using the new tools knew this was an even more highly desirable item than the sellers, and were busy scarfing them up and retailing it themselves.

    As the possibility of shortages became evident, those afraid of missing out (or who didn’t live anywhere near a CompUSA) began ordering online.

    Sunday morning brought the official opening of the sale, and many stores had people lined up for them.

    As morning turned into afternoon, reports of availability began to seep in. By early afternoon, it was announced that Best Buy had officially matched the offer (saving themselves the 10% price-beating bonus).

    Afternoon brought tales of greed, people buying tons of them at a time, salespeople hiding them behind the counter and in all other sorts of places in the store, with customers occasionally finding them. Other salespeople holding items back under the counter, and suggesting they get paid to install them.

    Local variances were brought to light. Some places issued rainchecks, some didn’t. Some limited sales to one per person, most didn’t. One place even denied the sale existed or even could exist.

    As people began to fail getting the prized Plextor, there was much wailing and gnashing of teeth, and those who got told them to keep grinding.

    But this was not the only action . . .

    Video Poker

    On Saturday, one website offered a Gladiac 64MB DDR Geforce 2 for $120. Since the equivalent card on Pricewatch went for four times that price, there was immediate skepticism on this one.

    Typo Pounce

    Not that that stopped people from jumping in, matter of fact, one of the first reactions was to try to somehow limit the number trying to get on this bandwagon, which was immediately scorned, as evidenced by approximately a thousand purchases within less than five hours.

    Many people looked upon it as a sort of free lottery ticket; weren’t holding their breaths, but figured it didn’t cost them anything.

    Others thought that price quote a sacred covenant. One in particular really went on a crusade and got more inspired as time went on, as selected excerpts from his various posts show:

    “I want my f$#%@ing card from these people . . . . There is no such thing as a TYPO on the internet in HTML…..that price was deliberately put there and it must be honored. . . . WE WILL ALL WRITE A BAD REVIEW FOR THEIR SITE UNLESS WE GET THE CARDS DELIVERED!!!
    I am going to rip their Website a new REVIEW A$$hole if I dont get this card…this was a CHEAP PLOY to get Website ATTENTION and I suggest you ALL do the same. . . . I used to work for a major Computer Retailer, in fact a few, and this has been a common practice in the industry and it was unofficially dubbed “Intentional Err” and would be strategically implemented when the company needed to get quick exposure and audience share. . . .
    Not to insult anyone specifically here but it is the forgiving braindead typo shmucks (sic) that these Online Retail vultures thrive on to get what they want. . . . Is that gonna bring some small child a GeForce 2 card that perhaps his dad was waiting for that perfect moment to purchase . . .???……What are you gonna say to that kid!?…huh?
    …Dartek will come thru or they will face the reprecussions of a disenchanted mob…Either way, this will be a moment to remember in history.”

    No, we can’t possibly be typo vultures; we’re doing it for the children. 🙂

    Others were more sophisticated and less theatrical, but it boiled down to the same thing.

    Around this time, others inspired each other by telling The Buy.com Tale. For those of you who don’t know it, a few years ago, buy.com offered a $550 monitor for $150. Thousands jumped in on that. Buy.com gave the stock in sale at the advertised price, cancelled out the other orders eventually (in many cases, they had charged credit cards). A class-action lawsuit was begun.

    (Though no one in the thread seemed to know this, this story didn’t end “and thanks to the fairy godlawyers, the Evil Buy.com gave everybody a monitor and everyone lived happily everafter.” Actually,
    buy.com settled by handing each of the 7,000 parties to the suit $50 and the lawyers around $200,000. (see here).

    Meanwhile, back at the website, very strange things were going on. First the offer was discontinued. Then it got revived. Then the number in stock started jumping upward to 98, then 245, then back down to 1. The price went from $120 to $420, then back down again. This is all occurring around midnight. People began wondering if the website was being hacked and credit card numbers collected for no doubt nefarious purposes.

    Nonetheless, the orders kept coming in and the band kept playing on. . . .

    As of now, apparently the price is at $549, and the company is taking the position that it was a typo and that no order would be honored for $120.

    Will people sue? Will they destroy any consumer ratings of the place? Or will they wait until the next typo? Stay tuned . . . .

    This Is Not Your Father’s Shopping

    Back in primitive times, like 1995, you just couldn’t do this. Period. Well, maybe you could get close if you dedicated your life to it, but maybe not even then.

    You couldn’t keep track of what hundreds or thousands of stores were doing. You certainly couldn’t find out the best deals in your country instantly and with negligible effort.

    Not any more.

    The retailers used to have the information advantage. After all, they were in the business, so the effort to find out was worth their while.

    Not any more.

    A network of free-lance bargain hunters inherently has the advantage over anyone with any kind of bureaucratic structure. Organizations take time to send information through. Freelancers don’t.

    Not even the websites could keep up with the curve on this; never mind the stores. I bet there were instances where someone freshly briefed drove to a CompUSA or BestBuy and had a better idea of the state of the store’s inventory and stated policies than the employee working in the store being asked about it.

    Many used that knowledge to essentially short-circuit the sale; they essentially had their own sale a couple days before everyone else.

    Just as a footnote, just how long do you think it would have taken for that Plextor firmware hack to occur if people couldn’t instantly communicate? A lot longer than it took, for sure. How long before it became common knowledge? Five years, ago, probably months. Now, hours.

    Is This Greedy, Cheating, Or Otherwise Evil?

    My heart says yes. However, my head realizes what is really happening here. People with better information are simply taking advantage of those with poorer information. That has been a way of life since Og found out where the best roots grow, and grabbed them before anybody else. The only difference is that gathering this particular kind of information is much much easier to do now.

    Competing for information to gain an edge is such an integral part of our lives that we don’t even realize it. We use it all the time to get whatever is in short supply. Damn those who did this, and you inevitably damn yourself for doing the same thing in another arena.

    So then it seems to become a matter of drawing the line. Seems. You then have to ask, “Is there a line worth drawing, and can it even be drawn?”

    No one will die from not getting that CD-RW or video card, not even that mythical kid waiting for Daddy to bring home that GeForce2 Ultra card (I keep imagining Oliver Twist getting handed an MX card by the evil orphanage, and him saying, “Please, sir, I want some more.”) Not like these are the last CD-RWs or video cards that will ever be made, either.

    Since this is not life-or-death (and even when it is), it’s very difficult to keep people from taking advantage of a situation. Especially when those who can control that situation don’t.

    CompUSA could have limited sales to one a person. Iomega could have limited rebates to one a person. Neither did. Under those circumstances, pretty useless expecting people to restrain themselves when the whole economic system is built on people selling goods and services for more than they cost.

    If You Can’t Beat ‘Em, Join Them

    Do you know what I learned this weekend? I learned that I better not count on the old rules applying anymore. I learned I’d better be on my toes if I want to get a good deal. I learned that I was lame but lucky according the new rules, and I’d better not expect the same combo the next time around.

    That doesn’t mean I’m going to buy a dozen Hot Items next weekend and sell them on eBay, but I’m going to check those forums out regularly.

    Is It A Game, Or Is It War?

    Businesses and consumers are usually opponents. Businesses try to make as much money as possible, and consumers try to pay as little as possible. It’s just as true haggling in a Mid-East bazaar as getting Internet-inspired pricematching.

    However, for some, this never-ending contest turns from a game into a war, and the reseller turns from a competitor into an enemy.

    You see this in the typo pounces. There’s been typographical errors since type, and human error is one of the few eternal truths.

    When information flow increases, though, the ramifications of a typographical error explodes. If this were a retail store, and a price was mismarked, there’s limited impact. Even if the bad price were advertised in a newspaper, you’d still have to read the newspaper to be misled.

    Now, though, one slip of the fingers, and hordes of people who would have never seen your mistake under the old rules jump on it.

    If you’re the equivalent of a mom-and-pop store, and you make a mistake on the Internet, you face financial ruin either way, either by going bankrupt owning up to the mistake, or having your reputation trashed if you don’t. Even bigger companies can get seriously hurt financially, especially with the stock market so attuned to meeting financial targets.

    What I find scary is the number of people who simply don’t care. So what if you go out of business; I have my video card.

    Let’s be a little more tolerant of our mistakes, folks.

    Email Ed

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