Saw this post titled “Seriously. This should be illegal.” on Kotaku, a video gamers’ blog:
One commenter lovingly calls this a "stupid tax."
Commenters are furious. “How could BB charge good money for something so simple!? I could do this! They could charge 20% of that and it’d still be profitable – this costs them nothing!”
Nobody ever said the internet populous was brilliant (however good Wikipedia turned out to be), but anyway, there’s a lot of reading between the lines that justifies the price.
The thing about service professions is that they universally have high margins per sale. You think the guy cutting your hair couldn’t do it for half as much? 20% as much? Hey – all he’s doing is working a pair of scissors, right? I could do that!
What the unassuming public thinks you’re buying here:
- Guy comes to your house,
- Connects some cables,
- Powers the system on to download updates.
What the actual consumers of this product are buying:
- The personal, undivided attention and time of a trained professional,
- The guarantee that you won’t screw something up that’s very important for your kids,
- An excuse not to read the instruction manual full of jargon,
- The use of their own time to do other things, like make $130.01 an hour.
It’s easy for everyone on a blog – a video game blog, no less – to lampoon Best Buy for shamelessly inflating prices. What they don’t realize is that Best Buy, although they’re an electronics giant, gave up on internet- and computer-savvy consumers a long time ago as their core market. Best Buy is still around (and Circuit City isn’t) because of, ironically enough, their service. People above 50 swear by it. Any time my Dad need something electronic, the first thing he does (after calling and asking my opinion) is mention that he’s going to Best Buy. Sometimes, I get calls from my parents while they’re already in Best Buy.
My parents (not exclusively, but figuratively) are Best Buy’s core customers. My generation buys a TV, computer, or game system because the technical specifications meets our high standards at the best price. Best Buy can’t do this – they have storefronts to pay for while TigerDirect is in a warehouse in the middle of nowhere. The 50+ generation buys a TV to impress their friends and coworkers and a game system to amaze their kids. I can’t imagine asking my Dad to set up a Nintendo Wii – even if I walked him through it over the phone.
What’s an extra hundred bucks to see your kids’ jaws drop as everything’s powered on for the first time and works perfectly?