Q. I see all these Black Friday discounts on TVs and Rokus and other electronics, but how can you tell it’s really a deal? The prices could be cut a little, but how would anyone really know? Maybe they just cut it from the original price from a long time ago and then say it’s a big discount. I am very suspicious of these deals. Can you comment? — Stella, Marina Del Rey, California.
Stella, that is a great question. During Black Friday, retailers advertise that they are offering lower prices on everything from televisions to tissues. But sometimes the ‘deals’ are not really deals at all.
For instance, let’s say Sony introduces a 65-inch 4K TV with a manufacturer’s suggested retail price (MSRP) of $999. The key word in that phrase is ‘suggested.’ A retailer will immediately cut the price by at least $50 so it can gain an edge on the competition. You’ll see signs in the store, or at the retailer’s web site, saying the TV is $50 off MSRP.
However, the store’s rivals will likely reduce the price by $50 as well, or in the case of some, like Amazon, $51. (The extra dollar is so Amazon can say it offers the lowest price.) So is it really a ‘deal’ that you can buy it for $50 less than the MSRP? Not really.
As the TV model gets older, and starts taking up shelf space needed for new sets, the initial retailer might lower it by $100 instead of $50. Now it will say the price is 10 percent off the MSRP, which sounds good but only means the store is selling a less-valued TV for a correctly reduced price.
So is that a deal? Again, not really, particularly if you can buy it for the same price at almost any electronics store.
Now let’s jump to Black Friday. Retailers might say a TV’s price has been reduced by 33 percent. But in most cases, we’re still talking about the MSRP. (The TV maker sometimes reduces the MSRP during the set’s life, but not dramatically.) The store has simply cut the price from what the company ‘suggests’ it should sell it for, although few actually sell it for that. So you are actually buying a TV for considerably less than what it was when it was first introduced.
But would you expect anything different if you were buying an older model car? Of course not. The price is lower, but it’s not really a deal.
So what are real deals?
I would put them in three categories.
One, when a retailer or two significantly lower a product’s price compared to what their rivals are charging. For instance, if Amazon and Walmart are charging $699 for a 60-inch TV and Best Buy steps in and drops it to $599, that’s a deal.
Two, if the manufacturer significantly drops the suggested retail price, allowing all retailers to drop their prices as well, that’s a deal. For example, a few weeks ago, Roku cut its Roku Express from $29.99 to $21. That was a definite deal. (The price is back to $29.99.)
Three, a product model that was never widely available is suddenly offered at a price far lower than comparable models. For instance, Walmart this week sold a 43-inch HDTV with Roku inside for $88. (The brand was onn, which is Walmart’s exclusive brand for electronics.) The deal here was not so much the TV itself, but that you can’t otherwise buy any 43-inch TV with Roku for less than $100.
If a Black Friday ‘deal’ does not fall in one of these three categories, I would not call it a deal. It might be interesting, and worth your time and money because the price is dramatically lower than it was several months ago.
But no deal.
Stella, hope that helps. Happy viewing, and stay safe!
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