Tuesday, June 12, 2007

Why does radioshack continue to exist?

A recent failed purchase at a nearby Radioshack store made me wonder at how much life imitates art. The onion published a hilarious article entitled Even CEO Can't Figure Out How RadioShack Still In Business. Read it for a good laugh, because unfortunately, the funniest material they write is firmly grounded in reality.

Here is a shining example as to why Radioshack's business model is fatally flawed. I have a computer hooked up to my HDTV that I use to play DVD's and recorded movies off my network. I wanted to improve the picture by switching from a VGA cable to DVI cable. These aren't obscure parts, even though Radioshack traditionally has been known to carry a motley assortment of electronic parts. Many of you probably recognize the cables easily from the pictures shown in the links.

There is a Radioshack close to home that is within walking distance. But just to be safe, I went on their website to verify that they have a number of DVI cables to choose from. It seemed like they had a wide variety, from the useless, overpriced Monster brand to a less overpriced in-house brand. I figured the extra expense of buying the cable in person would be made up by the convenience and speed compared to the shipping costs and waiting time of buying online.

When I went to the store one evening, the first rack near the door contained an army of overpriced monster cables. This was expected, since the markup on those monsters is monstrous, and probably reel in a hefty profit. You see, since the DVI specification is a digital signal, there is absolutely no benefit to having the higher priced monster cable. Unless there is a fundamental flaw in the cable you buy, you're better off getting the cheapest cable you can find, though I'll get more into that later. Thankfully, they had some in-house generic brand cables there too. However, not one single cable of these was a simple DVI cable. They had lots of HDMI cables, and they even had a DVI-to-HDMI converter. I could have cobbled together some kind of hack to get the DVI signal to go to an HDMI plug in my TeeVee, but the total cost would have been over $100! Frustrated, I asked the sales clerks (who were by now hovering around me like flies gravitating to a freshly laid turd) for some aid. Naturally, they guided me right back to the rack full of Monstrosity Cables, and didn't find a DVI-to-DVI cable either (no shit sherlock). I told them that they had lots of these kinds of cables online, but assured me that I was probably looking at internet only products. They then suggested I cobble together that same DVI-to-HDMI hack that I mentioned earlier. I promptly told them not to waste any more of their time and bid them adieu.

This is a picture of the clever hack I would have had to buy at Radioshack. The product on the left is the Monster DVI to HDMI adapter. That costs 34.99. The shortest Monster HDMI cable they had was 79.99. Total cost (before tax) is roughly $115.

So feeling a bit disgruntled, I decided to surf over to amazon.com, among many choices of web vendors. I searched for DVI cables, ordered it by cheapest, and found found 6 FT. DVI SINGLE LINK CABLE for the shockingly low price of $1.50 new from one of the independent sellers (Amazon's price was $7.99). Even with 4 bucks of shipping it and using the Amazon price, it was still massively affordable. Figuring there was a catch as to why it was so cheap, I did a little research. According to wikipedia's DVI article, there are two flavors of DVI: single and dual. Single supports 1920×1200 resolution compared to dual's 2560×1600. Single is therefore the cheaper of the two. Since my HDTV is 1336×768, a single link DVI cable is more than enough to satisfy my needs.

I received the product in plain packaging a few days later, and the picture on my TeeVee is crystal clear, since it's a "perfect" digital signal, far superior to the original VGA cable. All this from a product that cost less than 10 dollars.

This goes to show that the success of Radioshack is based on the ignorance of the general public to its price-gouging activities by pushing Monster products above all else. Buying Monster only makes sense when the best performance is needed: wiring expensive high-fidelity and high-wattage audio equipment over 40 feet, such as at a club or at a rock concert, using analog cables. For digital video and digital audio, the cheapest quality cable will be more than sufficent. Even if you feel compelled the highest quality goods to simply show off to your friends, you'll be better off buying your monster cable online. As more an more people are drawn to the internet, Radioshack will increasingly find fewer and fewer reasons to exist.


Anonymous said...

Good story. And you are right on radioshacks markup on Monster cables. If a Monster cable costs radioshack $4, they will sell it for $20. And this is how they are still in business.

Anonymous said...
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(Ex) Train Wreck Watcher said...

Mike Nelson has a chapter on Radio Shack in his book Mind Over Matters, entitled "Portal to Hell: The RadioShack Experience"; I think my favorite line from that chapter is about the threat of masses of "odiferous" RadioShack employees rising up and taking over and installing one of their own as "Ham Radio Operator for life". :D

Anonymous said...

5 1/2 years later ....R Shack still exists, despite increase in public online shopping. I have no evidence or proof, but makes me think Shack must be "connected".

Anonymous said...

Tonight I walked into a Radio Shack store in Salina, Kansas for a DVI to HDMI adapter that I had found online for $4.55. The clerk quickly piked up one and handed it to me. When I read the price on the package I almost fainted. $29.95!!! I told the young man that I wasn't totally ignorant and that I could get it online for $4.55, to which he replied, "yea, I know, but we gotta keep the doors open somehow. I told him I realized it wasn't his fault, but that they weren't going to keep them open on my buck at that price and left. Geesh!