The Wall Street Journal reports that Sony and Samsung have both started restricting retailers from offering discounts on TVs. The move is designed in order to save a pie of both the manufacturer’s margins as well as retailers’ profits by preventing “showrooming.”
“This allows us to make a reasonable profit,” says Billy Abt, co-president of Abt Electronics, one of the country’s largest independent consumer electronics retailers. “It got to the point where we were selling $2,000 TVs and making $10.”
“The set makers have been losing money for years and now they’re desperate,” says Paul Gagnon, director of North American TV market research for NPD DisplaySearch. Sony, Panasonic and Sharp in recent weeks all reported record quarterly losses stemming in large part from their weak TV divisions.
“The real test will be the holiday when everyone is fighting for market share,” says David Strasser of Janney Montgomery Scott. “If Amazon breaks the policy, will the manufacturers stop shipping product or cut off marketing dollars? We’ll see.”