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Best Buy Posts $1.7 Billion Loss Because of Apple and Amazon

The smallest Apple Store known to man...

Best Buy has always been a pretty big retail chain. You can find a variety of electronics at Best Buy, and with their Accidental Warranty plans, they really were cooking up some competition. Or so we thought…

Looks like Best Buy posted a $1.7 Billion quarterly loss last quarter. Best Buy is closing 50 stores and ridding $800 million in costs. I love Best Buy but only for certain things. And to be honest there isn’t much I could purchase at Best Buy, that I couldn’t find at another online retailer for less expensive.

This is where the problem beings. Steve Jobs was always a big fan of ditching the middleman, and Best Buy is TOTALLY a middleman. They have their costs to run a business and most of their pricing reflects that.

Amazon is a leading retailer because they either buy in massive bulk or sell directly from the retailer which eliminates most costs. Not to mention being a website, they have a bit less overhead then that of a physical store location.

Apple manufactures and directly sells all of their products for the same price or cheaper then most every other retailer. But is this really what is killing Best Buy? I personally think that while they have a very selective inventory. And it doesn’t help that most Best Buy Stores have an Apple section no bigger than my dining room table…

According to The Wall Street Journal, Best Buy needs to rethink their business model.

Best Buy said it will increase worker training by 40% and offer sales staff financial incentives, a move that boosted mobile-phone sales when it incorporated it into that part of its business.

Yea… I don’t think adding financial incentive to sales does anything more than annoy the consumer trying to casually purchase a product. Just my opinion though.

If your not able to sell your own individual products, nowadays having a storefront is rather pricey and difficult. Maybe this is something that Best Buy is going to learn the hard way. Anyone thinking Circuit City??

Do you shop at Best Buy?

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