Tuesday, June 5, 2012

Samsung and Sony End HDTV Discounts in Stores

Got your eye on a slick Sony or Samsung HDTV that would totally bring your entertainment center together? Does the price seem a bit too high for your bank account? Are you waiting for Black Friday or some other day when that set goes on sale? If you answered yes to that last question then I have some bad news. Samsung and Sony have both announced that they will not allow retailers to sell their HDTVs at discounted prices below the suggested retail price of the device.

Discounts on things like HDTVs are amazing for consumers, though retailers don't particularly like the idea of discounts, especially amid dwindling profit margins. That is why Samsung and Sony have decided to force retailers to drop the heavily discounted pricing schemes in hopes of boosting profits and making more money. The Wall Street Journal reported first that Samsung and Sony were introducing new pricing plans that were specifically designed to increase the lackluster prospects of big name retailers like Best Buy while also trying to help other physical stores compete with online retailers that typically charge less for HDTVs.

This new pricing policy from both companies went into effect last month and prevents stores from advertising or selling Samsung and Sony TVs for less than prices that have been set by the manufacturers. Unfortunately, this plan is extremely risky. The main risk factor is that consumers may simply pass on these name brand TVs for other ones that are on sale, not to mention the fact that other name brand companies, like LG, Panasonic, Sharp and Vizio, are still offering sales and discounts. This could mean that Samsung and Sony's plans could backfire, losing more money for the companies than gaining.

HDTV manufacturers and retailers have suffered dramatically from slowing sales and declining profit margins for a while now, though some manufacturers are hopeful for this year. Both LG and Samsung saw profit margins of just over 2% in 2011, which isn't very impressive, though it is still better than breaking even like the companies did in 2010. In addition to that, retailers have been struggling as well. Best Buy announced in March that it was closing 50 of its bigger stores and replacing them with 100 smaller outlets that will focus on phones, tablets and e-readers but not TVs.

If you still want deals on Samsung and Sony HDTVs, you will have to turn to the internet and online retailers for them as Samsung and Sony's pricing scheme doesn't carry over to online stores. However, you can still get name brand products from physical stores as LG, Panasonic, Sharp and Vizio still think discounts are a smart business decision.

Source: PC World - Samsung, Sony Put the Kibosh on TV Discounts
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