A disturbing new trend is sweeping across the TV industry, and it affects what kind of deal you can get on your next television. It started with Samsung, which in 2012 announced a Unilateral Pricing Policy (UPP), which legally permits them to set the minimum price its dealers charge for HDTVs. The program covered all the mid- to high-end models in its 2012 line. Sony jumped in with its version they call “SURE” pricing. It affected all but their entry-level models. LG soon instituted is own online unilateral pricing program.
For 2013 nearly every Tier 1 brand – Samsung, LG, Sony, Sharp and Toshiba – have decided to go with their own minimum price program, leaving only Panasonic to allow its dealers to set the selling price or permit negotiation with a potential TV purchaser.
All the details and what you can do about it, after the jump.
Ins and outs of UPP
If a dealer sells you a price-fixed model at a discount, he risks a temporary halt of shipments from that vendor. Repeated violations could lead to the dealer to lose all rights to sell that company’s product. So how do you get a better price on a UPP model? You can’t, since dealers can no longer price-compete. All the stores in your area will have the same price.
a) Get an end-of-year deal on a 2012 HDTV, as many vendors have dropped UPP for end-of-model-year close-outs.
b) Shop for a 2013 Panasonic. They will begin shipping new models over the next few weeks.
c) Settle for a Tier 2 brand (Vizio, Philips), or a Tier 3 brand like Sceptre, Westinghouse, TCL or Coby
. They’ll be less expensive than the top-tier TVs, but generally won’t have the performance of the name brands either.
Timing is Everything
Products go through a life cycle. Most Tier 1 brands begin shipping their 2013 models in early March and continue through April/May. This year the exception will be the 2013 UHD (Ultra High Definition or “4K”) models, as these aren’t expected until mid-year or later due to panel and chip availability.
When a TV first appears on dealer shelves it’s always at its highest price of the year. Here’s an example: The 2012 Samsung LED LCD model UN55ES8000 was first offered by Amazon on Feb. 20, 2012 at a price of $3400. Around March 15 the Amazon price dropped to $2897.99. In May it dropped another $200. At the end of June it dropped again to $2497.99. Early August it dropped another $200, then it popped back to $2497.99 until around Thanksgiving when it hit $2397.99. Fast forward to this week. It is now in closeout-mode, off UPP, and is selling for $1854.56 from Amazon direct. This is 46% off its retail price. We checked out a number of other UPP TVs with similar patterns, released in the mid March to mid April time frame, then holding price until late June to early August, with the next drop around Black Friday. Their lowest prices were also when they entered “closeout mode.” If you are looking for top picture quality and a brand you can trust, stick with a Tier 1 TV. While the dealer selling prices are controlled by the vendor, TV margins are generally only in the 15-25% range. There can be occasional price drops through dealer incentive programs like instant rebates. Since the selling price is the same for all authorized dealers, pick the store with the best policies and most knowledgeable sales people. If you choose Amazon direct they will not collect the sales tax (except CA, TX, KS, KY, NY, ND, PA & WA) possibly saving you hundreds.
Another alternative are derivative models. These are TVs that are very similar to a company’s main series televisions, but may lack one or two features (like one less HDMI input, or no Internet streaming) but will cost less. They will have a slightly different model number. Make sure you check the box and manufacturer’s website for the full list of features. You will find these Tier 1 derivative models at the warehouse clubs such as Costco or BJ’s and some regional dealers.
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