Why Does Best Buy Sell $1,000 Refrigerators?

August 21, 2016 by Douglas A. McIntyre

Best Buy is supposed to be a consumer electronics store. Its shelves and bestbuy.com are supposed to be filled with PCs, video games, cell phones, cameras, and home theaters. However, it also sells appliances, which makes it an odd but direct competitor to places like Kmart

Best Buy’s own description of itself would seem to rule out refrigerators and dishwashers:

Best Buy is a leading provider of technology products, services and solutions. The company offers expert service at an unbeatable price more than 1.5 billion times a year to the consumers, small business owners and educators who visit our stores, engage with Geek Squad Agents or use BestBuy.com or the Best Buy app. The company has operations in the U.S. where more than 70 percent of the population lives within 15 minutes of a Best Buy store, as well as in Canada and Mexico, where Best Buy has a physical and online presence.

But, there the appliances are–Samsung – 24.5 Cu. Ft. Side-by-Side Refrigerator with Thru-the-Door Ice and Water – Stainless Steel for $1,094.99. That is a $250 savings. Or Whirlpool – 24″ Tall Tub Built-In Dishwasher with Stainless Steel Tub – Monochromatic Stainless Steel for $699.99. Free delivery. Financing plans

One can only guess why Best Buy is in the appliance business.The first reason might be that appliances have extremely large margins. The other is that Best Buy wants to be a more complete retailer beyond racks of smartphones. Why go to Sears at all?

One of the troubles that bricks and mortar retailers have is balancing what inventory they will have in stores. Floor space is precious. Training sales people on the benefits of new product types in not cheap. Shipping and installing huge appliances is nearly a business unto itself

Go to Best Buy, and get a dishwasher. The deals may be great, but why?

 

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