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[ The PC Guide | The PC Buyer's Guide | Understanding PC Sources, Vendors and Prices | Vendor Evaluation Factors | Pricing, Selection and Stock ]

General Pricing

Obviously, one of the most important differentiating factors between vendors is pricing. Let's see now, if I have the choice of buying from a place that has good prices or one that has bad prices, which should I choose... let me think... :^) And also obviously, the sellers know how much price matters to most shoppers (sometimes too much.)

That's not to say that determining the general pricing level of a vendor--as opposed to their specific price on one or two items--is always all that easy. There are some important rules of thumb to keep in mind when evaluating pricing:

  • Look For Trends: If performing an overall assessment of a vendor's pricing, or comparing overall pricing between two vendors, take a look at several of the products in each category of interest to you. While pricing varies between products, after about a dozen items, overall trends become clear. Don't jump to conclusions by just comparing one or two products, though.
  • Beware The Unusual: If a price you are looking at for a specific product seems strangely too high or too low, it probably is. Verify the price by calling the company. Most companies have "typographic error" policies that state that they will not honor prices that are excessively low due to errors (like a monitor listed for $29 instead of $299 due to a mistake.)
  • Call For Updates: Due to the flux in the PC market, prices listed in flyers or magazine ads are usually out of date by the time you read them; call for updated pricing. Prices on the web are usually pretty current, but not always. At the very least, make sure you aren't looking at a cached version of the page!
  • Dynamic Pricing: Mostly used online, this term doesn't seem to have a single, clear-cut definition. It is used often to refer simply to pricing models where there is no single, specific price. As such, it can refer to group buying clubs or auction sites, where the price of the item changes, or any other models were pricing isn't a single value. However, it has recently also gained attention due to a specific tack that some companies are using: offering different prices to different users based on their geography, or where they link from to gain access to a site. Amazon.com recently gained a fair share of criticism for randomly changing prices on some items during a "test". Personally, I find this concept to make business sense, but to be insulting, and I would not want to deal with a company that tried to charge me more because their demographics say I'll put up with it, or because of an "unlucky roll of the dice". If you find out after you purchase that you have paid more for an item than others, ask for a rebate--or send the product back and shop elsewhere.
  • "Mention X For The Best Price": This is another variant of dynamic pricing, and exists both online and offline. You may occasionally see TV ads for a product telling you to call a special number, or "ask for Carol" for example. These are sometimes ways that companies test out how well their ad campaigns are working. Online, you may be asked to enter a specific code to get a certain price. Obviously, these little games can affect your price shopping considerably.
  • Ignore MSRP Comparisons: You'll occasionally see companies list their price for an item next to the manufacturer's suggested retail price or MSRP for the item. In some parts of the world this may in fact be valid, but in North America at least, it's pretty much a joke--no retailer sells items at MSRP except for the very most popular newest items, and even then, it's unusual due to competition. The real purpose of listing MSRP prices is to make you feel good, so you think you're getting a "steal". Whether you are or not depends only on what others are selling it for, not the big number the manufacturer put on the item. (And if you are looking at auction items or used equipment, the original MSRP of the item is even more silly. Ignore it.)

Tip: Don't forget that there are numerous related factors that can reduce pricing at some vendors more than at others: see here for details.

Finally, no mention of pricing would be complete without my standard admonishment: never shop solely on the basis of price, or you risk doing business with a company that is disreputable or that ranks poorly in other areas. The degree of your own price sensitivity will determine how important price is to you in the grand scheme of things, but remember that it is only one of many factors.

Tip: When buying multiple items, where some are cheapest at one vendor, some cheapest at a second, and others cheapest at a third, it's often better overall (and maybe even less expensive, bottom line) to stick to one or possibly two vendors. See here for more on this.

Next: Selection / Variety


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