Best Buy formerly known as The Sound of Music is a chain of retailers dealing in the sale of consumer electronic goods and services. It was founded in1966 in the United States by James Wheeler and Richard M. Schulze and over the decades, it has grown into the multinational company it is today. Best buy is the largest and leading retailer in the sale of electronics in the United States. Let’s know Why is Best Buy So Expensive?
Their consumers have noticed that the prices of their merchandise have been rising compared to that of their competitors. Several reasons such as quality, demands, employee benefits, etc. have led to their products being so expensive.
Why their Merchandise Prices Are High?
Let us look at the reasons.
- Availability of High-Quality Products.
Best buy is the largest retail store that sells high-quality electronics to consumers for example video games, home appliances, TVs, and mobile phones. All products purchased at best buy come with a guarantee that they will work as they are supposed to and have a warranty that covers repairs and maintenance. That is why electronics and other products at best are so expensive due to their high-quality standard.
- A Large Number of Employees.
Best buy has over one hundred and twenty-five thousand employees across the United States. Best buy employees are paid $15 an hour, which is higher than what other competitive brands pay their employees. This, in turn, leads to high prices of consumer goods at best buy since they need to raise money to pay the employees.
- Technological Advancements.
Best Buy has a competitive advantage over their competitors since they have the technology that is needed in this era. They provide tech experts like the geek squad to their customers whenever they are in need. These tech experts get paid and that is why best buy electronics are expensive.
- Customer Satisfaction.
Best Buy trains its staff to help and serve their customers in whatever they may need. Customers, in turn, receive the best shopping experience and satisfaction while at best buy. Training of staff requires money and resources constantly, thus some merchandise in their stores may be highly-priced than products from competitors stores.
- A Large Number of Store Locations.
Best buy is a multinational corporation with over 1,000 locations. These stores need maintenance, adequate staff to run the physical store and pay rental fees for some locations. To ensure that their physical locations are well-staffed and maintained, they require the investment of money that is why merchandise at Best Buy is highly-priced.
- Employee Discounts.
Best buy offers its employees store discounts that are unavailable to their clients. These discounts cost the company profits since they give their employees discounts of +5%. For example, if best buy purchases a product at $600 to sell at $ 800 employees will buy the same product at $630. For the company to balance out its losses, they increase the prices of products.
- Shipping and Handling Costs.
Best buy sometimes offers free shipping for specific products. The free shipping costs the company profits since they have to pay delivery people, pay rental fees for warehouses where the goods are shipped from, incur packaging fees and incur fuel costs for delivery trucks. Thus, the company ends up spending more and needs to recover the losses by pricing their items.
- In-House Services.
Best buy has an in-house customer support service that they offer to their clients. When customers need repairs and maintenance of their electronic devices, best buy does house calls for such services so customers do need to carry their electronics to the shop. This costs best buy money and is expensive that is why best buy is so expensive.
- Cost of Business Tax.
Business tax is the tax that a business is required to pay to stay operational whether the business is a sole proprietor or a multinational company. For any operational business-like best buy to raise these taxes, they apply high prices to their products to make a profit and pay their taxes. This is why best buy is expensive.
Conclusion
Best buy is the best in providing high-quality electronics and home appliances in the retail industry. This contributes to it being expensive compared to its competitors. The services that they also provide such as in-house services, tech support service, customer satisfaction, and experience make Best Buy so expensive.
Frequently Asked Questions
- Do best buy prices match?
Yes, best buy prices much but for only same products. Best buy only price matches for the same style, model, brand, and availability of the products.
- Are online prices higher than in-store prices?
Best buy has an online store that consumers can order merchandise from and gives them the advantage to purchase from the comfort of your home. However, consumers have noticed that ordering products online are slightly expensive compared to buying from physical store locations.
