Apple Pulling iPad 2 from Best Buy?

[Meandmunch]

I had a strange experience at Best Buy. About two days before the iPad 2 came out I went to my local Best Buy to ask about availability on release day. The employee I spoke to told me essentially that I should wait. He told me the iPad 3 was coming this fall and I should either skip the iPad 2 or purchase something like the Zoom. I pressed him how could he possible know that, I said I read all the rumor mills and such and time and time again no one actually ever knows that information. He said "they all did" (best Buy employees) it was posted on there "E-Learnings" site which is basically an internal Best Buy training/notification/product information system.

So here is an employee telling me not to purchase an iPad 2 because he thought the Zoom was better AND I should just wait because iPad 3 was coming out this fall.

WTF?

 

[Quahog]

Not true!

I work at Best Buy, and I can tell you this "rumor" is not true.

First, we do not have daily quotas on iPad sales, although we do have overall budget goals as any company would. iPads had no impact on this.

iPad 2's have been extremely hard to keep in stock, and at least for my store and all the stores in my region, they would sell out within hours of receiving a pretty good sized shipment. (Although the Verizon ones dont sell as well as others, they still sell out too) We did not hold anything back... do you think we like the hundreds of calls and dozens of people asking us if we have any in stock? We took care of every customer we could. In checking inventory levels at other stores, it was zero's all the way down the list.

We are experiencing inventory issues with the iPad. Be it simple unexpected demand, the earthquake in Japan, or Apple wanting to take care of customers through their website and retail store before big box stores... I dont know. But stores certainly are not sitting on them.

 

[osofast240sx]

I think this makes somewhat sense... When i went to best buy on launch day they ran out... and then i went back and they were doing $100 pre-orders to be put on a list (which i never ended up doing)... so what they did is had a ton of people pay a hundred bucks to put on a best buy gift card and then "shorten" the supply so that people would have to be impatient and go buy somewhere else--which forced people to spend that hundred dollars at BB.
Kind of a cheap selfish way to make money. hundreds of pre-orders and then only a few ipad sales...
it still doesn't make sense to not sell what you have in stock though... stupid

I was one of the ones that put $100 down then receive my pad 4 days later. i thought that was a little suspect.

 

[fithian]

Entertainment

Just for entertainment, go to a Worst Buy and sidle up to a sales guy giving his pitch to an unsuspecting victim. I only ever go there to see a model in person before ordering online or elsewhere. I do purchase items at local stores who respect the customer and don't tell blatant lies about the products.

 

[ugahairydawgs]

Sources? Evidence? Easy to make cheap accusations, much harder to prove them.

When Apple's supply shortages at iPhone and iPad launches are as terrible as they have been, Apple is either 1.) inept at judging the demand for their product, #2.) inept at acquiring the components necessary to produce the quantity of product they need to meet demand or 3.) holding back supply to drum up demand.

I have a pretty hard time believing that #1 or #2 are true for company the size of Apple.

 

[croooow]

...Why in anybody's right mind would best buy not sell what they have?

This may have already been said. But some stores will hold onto stock of a hot selling item because it will be posted in a weekly newspaper ad.

So, if they have the hot selling item at the time (in this case, iPad 2) on a Wednesday or Thursday and aren't getting any shipments until the next week but have an upcoming Sunday flyer featuring that item, they will hold the item in the back until Sunday. They don't want to be sold out before they open on the day the item is advertised in the paper.

So weird that in 2011 stores selling the latest electronics care about newspapers.

 

[osofast240sx]

I work at Best Buy, and I can tell you this "rumor" is not true.

First, we do not have daily quotas on iPad sales, although we do have overall budget goals as any company would. iPads had no impact on this.

iPad 2's have been extremely hard to keep in stock, and at least for my store and all the stores in my region, they would sell out within hours of receiving a pretty good sized shipment. (Although the Verizon ones dont sell as well as others, they still sell out too) We did not hold anything back... do you think we like the hundreds of calls and dozens of people asking us if we have any in stock? We took care of every customer we could. In checking inventory levels at other stores, it was zero's all the way down the list.

We are experiencing inventory issues with the iPad. Be it simple unexpected demand, the earthquake in Japan, or Apple wanting to take care of customers through their website and retail store before big box stores... I dont know. But stores certainly are not sitting on them.

what you(Best Buy) did was take $100 from the customer and lock them in from buying anywere else!

 

[LarryB08]

what you(Best Buy) did was take $100 from the customer and lock them in from buying anywere else!

Yeah, Best Buy took that $100 alright...they held a gun to each customer's head and told them flat out - "we have no more in stock so you better pay us $100 or else"

If you believe this was actually some sort of BB ruse, and still paid your money, then you deserve what you get. Start taking responsibility for your own actions for a change.

 

[Yankee617]

Weird... I think there's more involved in this than we can imagine.

One thing that comes to my mind is the possibility they were holding their stock to sell it outside the country, as there's been a high demand and higher value to sell overseas.

Yeah... BB could put the extra iPad's up on Ebay and pocket the extra cash.
Not a big deal if its just done at one or two stores, but if its organized at the
corporate level (with lots of creative accounting/reporting in-between) they
could have millions of dollars going straight to their bottom line (or lining
some unscrupulous executive's pockets).

Were those above-quota iPad's being held in-store and sold the next day,
or were they being forwarded/rerouted to another BB location?

I'm still planning to buy my iPad from my local Apple store.

 

[DrJohnnyN]

Slick move, Best Buy.

 

[01civicman]

I am also a work at BB. I can tell you how it works for me. If we are getting shipments, its being kept from the associates (at least in my store). My store is small and if they were some where in plain sight, we'd see them. Plus I'm pretty close to a lot of inventory guys. The Daily Quota thing doesn't make much sense, because in the end, its a month end budget that we have to meet. If we miss by 2K one day, but are over by 5K the next, it doesn't really matter. Sure the managers want to hit every day, but it doesn't really make that much sense.

As for the $100 pre-sale, my store stopped it at about 10 people, so its not like we did that to a ton of people, and about a week ago, 6 of them got their iPad, so our "list" is almost empty.

Also, having the iPad, definitely brings foot traffic in to potentially make money elsewhere, but in the end, if we sell 20,000 iPads (and nothing else), the store just lost money.

 

[applefan289]

It's about time. Best Buy does not deserve the time of day - their employees are low, their service stinks, and their whole philosophy is unethical. Looks like it's starting to come back to haunt them now...

 

[anthonymoody]

Aren't retail stores in the business of, you know, making sales? Why the F would they artificially limit the sales of a given product? Makes zero sense unless they just wanted to be douchey and keep people returning day after day to drive up foot traffic and hope for other spillover sales foam impulse purchases. But could that be worth all that much?

Reminds me of a true story - went into one of those pre-made sandwich shops because I need to feed a horde unexpectedly, and quickly. I asked for all their stock of three different kinds of sandwich. The woman behind the counter said "but sir what will we sell to other people!".

Bizarre way to run a business.

 

[Popeye206]

Hummm... I would think by them throttling the sales, they get people back into the store over and over again trying to get one. So, take their "hot product" and dish a few out everyday to keep the eager hunters coming back in day after day and hope they buy something else in the mean time.

Also, I can see from the sales incentive standpoint that if you've hit your quota for the day selling 20 ipads in an hour, but have another 40 in stock, hold them for the next day to ensure you have consecutive days of hitting your sales quota making you look better and probably getting other bonuses? I would think they compensate managers based on daily sales and consecutive days of sales above quota.

So... basically, I see BB messing with stock to manipulate their sales and Apple being mad because they are so far behind on keeping up with demand and one of their big partners is holding out and using the iPad as sales bait.

 

[croooow]

what you(Best Buy) did was take $100 from the customer and lock them in from buying anywere else!

Yeah, Best Buy took that $100 alright...they held a gun to each customer's head and told them flat out - "we have no more in stock so you better pay us $100 or else"

If you believe this was actually some sort of BB ruse, and still paid your money, then you deserve what you get. Start taking responsibility for your own actions for a change.

I don't think anyone is saying that Bestbuy did anything illegal. But it is not good customer service to take advantage of people in this way. People are led to believe that $100 will get them closer to the iPad they want.

 

[ghostlyorb]

How many times does it need to be said, "don't screw around with Apple"?

 

[Popeye206]

It's about time. Best Buy does not deserve the time of day - their employees are low, their service stinks, and their whole philosophy is unethical. Looks like it's starting to come back to haunt them now...

They were caught here on the east coast with a separate web site that hey would use when you came into the store to jack up prices. So you'd see a product on the web site for $X and go into the store and it's 10% higher, then they would show you on the fake site that it's the right price. A bait and switch routine.

I never heard any more about this and have been surprised. I would have thought that would have been their death with consumers. I know I won't buy from them if I can help it. Although I love to look there.

 

[01civicman]

Hummm... I would think by them throttling the sales, they get people back into the store over and over again trying to get one. So, take their "hot product" and dish a few out everyday to keep the eager hunters coming back in day after day and hope they buy something else in the mean time.

Also, I can see from the sales incentive standpoint that if you've hit your quota for the day selling 20 ipads in an hour, but have another 40 in stock, hold them for the next day to ensure you have consecutive days of hitting your sales quota making you look better and probably getting other bonuses? I would think they compensate managers based on daily sales and consecutive days of sales above quota.

So... basically, I see BB messing with stock to manipulate their sales and Apple being mad because they are so far behind on keeping up with demand and one of their big partners is holding out and using the iPad as sales bait.

I get your point, but it doesn't work like that. One, selling 20 iPads will not hit budgets (believe me). Two, if there any bonus' to hit, its done quarterly. Again, if you sell 50 iPads in one day, its the exact same as selling 3 over the course of 15 days.

 

[LarryB08]

Reminds me of a true story - went into one of those pre-made sandwich shops because I need to feed a horde unexpectedly, and quickly. I asked for all their stock of three different kinds of sandwich. The woman behind the counter said "but sir what will we sell to other people!".

Bizarre way to run a business.

Scenario 1: Store expects 1000 customers. Customer 15 walks in and buys all the store's stock. The remaining 985 customer walk in through the day and are told we have nothing to sell you. These 98.5% of the daily customers never return to the store in the future.

Scenario 2: Store expects 1000 customers and rations stock to serve the needs of the greatest percentage of their daily customers as possible. The great majority of customers are happy and continue to patronize the store in the future.

Scenario 2 above does not seem so bizarre to me.

We are talking business here, business that needs to function over time and not just over one day. All I know is there are a lot of people here who are taking great pleasure trashing a store for their own personal reasons. But the store must serve their overall client base as best as possible and sometimes that may mean being unable to satisfy every specific request every day.

 

[Rm.237]

me too! I wanna learn!

How does withholding stock from the public aid a company? I can imagine holding them till everything is registered in their system and accounted for. But turning people away when they actually do have stock doesn't sound like a good business practice to me

Sorry if this has been beaten to death over the next nine pages but I just don't have the time to read it all this morning.

It's very simple really. Each day a retail outlet like Best Buy has a budget they want to hit. Even though it depends on local let's call it $75,000. Now let's say in this very high pressure competitive environment I have already made budget but know that tomorrow my budget is going to be $100,000. I'm a little nervous about hitting that but know that I got like 15 iPads sitting in the back. Very simple solution. Do not sell anymore iPads for the day and wait to sell them tomorrow! The iPads alone will net me 10,000 of that budget. No way am I going to sell them after I've made todays goal.

This is just one of many different scenarios but they all are very similar. Should I hold iPads in the back until it looks like we may not hit budget? Should I hold them off for tomorrows monster budget? Should I sell them to go over budget and be tops for the day in the district? Etc, etc, etc.

 

[01civicman]

Scenario 1: Store expects 1000 customers. Customer 15 walks in and buys all the store's stock. The remaining 985 customer walk in through the day and are told we have nothing to sell you. These 98.5% of the daily customers never return to the store in the future.

Scenario 2: Store expects 1000 customers and rations stock to serve the needs of the greatest percentage of their daily customers as possible. The great majority of customers are happy and continue to patronize the store in the future.

Scenario 2 above does not seem so bizarre to me.

We are talking business here, business that needs to function over time and not just over one day. All I know is there are a lot of people here who are taking great pleasure trashing a store for their own personal reasons. But the store must serve their overall client base as best as possible and sometimes that may mean being unable to satisfy every specific request every day.

If somebody came into my store and asked for all of the iPads, my managers would buy him dinner for a week. lol

 

[grmatt]

I had a strange experience at Best Buy. About two days before the iPad 2 came out I went to my local Best Buy to ask about availability on release day. The employee I spoke to told me essentially that I should wait. He told me the iPad 3 was coming this fall and I should either skip the iPad 2 or purchase something like the Zoom. I pressed him how could he possible know that, I said I read all the rumor mills and such and time and time again no one actually ever knows that information. He said "they all did" (best Buy employees) it was posted on there "E-Learnings" site which is basically an internal Best Buy training/notification/product information system.

So here is an employee telling me not to purchase an iPad 2 because he thought the Zoom was better AND I should just wait because iPad 3 was coming out this fall.

WTF?

Fandroid.

 

[01civicman]

Sorry if this has been beaten to death over the next nine pages but I just don't have the time to read it all this morning.

It's very simple really. Each day a retail outlet like Best Buy has a budget they want to hit. Even though it depends on local let's call it $75,000. Now let's say in this very high pressure competitive environment I have already made budget but know that tomorrow my budget is going to be $100,000. I'm a little nervous about hitting that but know that I got like 15 iPads sitting in the back. Very simple solution. Do not sell anymore iPads for the day and wait to sell them tomorrow! The iPads alone will net me 10,000 of that budget. No way am I going to sell them after I've made todays goal.

This is just one of many different scenarios but they all are very similar. Should I hold iPads in the back until it looks like we may not hit budget? Should I hold them off for tomorrows monster budget? Should I sell them to go over budget and be tops for the day in the district? Etc, etc, etc.

And I'm telling you that it doesn't matter if you are 15K over one day and 15K light the other day. At the end of the month, its even.

 

[jc1350]

The CrunchGear story has been updated to state the rumor is "squashed."

 

[Rm.237]

Just to let y'all know, unless someone else knows otherwise, Best Buy makes zero off Apple product sales (that haven't been marked up).

I read this thread and I noted that someone pointed out that BB apparently marks up some items -Airports, Time Machines, etc. I found this odd since Apple controls all the pricing, but eh, not going to question that since those are the facts I'm assuming (can't be bothered to go on a comparing spree).

Anyway, the iPad 2s aren't marked up, thus they make zero.
Each department should be meeting their budget daily. How do they do that? By selling products they make notional margin and that allows that department to meet their budget. On a slow, sh-tty day, a department may only be 70% to budget; on a fast, awesome day, a department may be 110% to budget.

But when you make zero off iPad sales, keeping them away from customers does not help notional margin. Doesn't bring them any closer to hitting budget. The only way they'd make money on that iPad sale would be selling accessories or the Black Tie protection. But that's entirely something else.
Best Buy makes zero notional margin on iPad sales, so they're not withholding stock to meet daily budgets.

I can't explain why they're doing this, but given my knowledge, I can invalidate the claim that managers are hoarding iPads so that they can meet budget every day.

Cheers!

Margin is not the same as the budget. On a sales graph they represent two different things entirely. Course as they say in retail margin is king. At the same time the budget is that big flashy number that everyone wants to hit.