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Thursday, Aug 09, 2007 - 01:13 SGT
Posted By: Gilbert

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Caveat Ramptor

So I made good my promise to myself to pump up my desktop rig à la Barry Bonds (who coincidentally became Major League Baseball's all-time homerun record holder today), and took the MRT to Bugis and Sim Lim Square for new sticks of DDR2-533 RAM.

As usual, I had done my homework at Hardwarezone.com. As I mentioned a week earlier, prices appeared to be hovering just below the S$70 mark for a 1GB stick, and I copied the names of several stores which advertised their wares around that region in the price guides.

A certain outlet caught my eye with a S$56 quote, S$10 less than any other shop. This may not seem outrageous, but at the wafer-thin margins that Sim Lim Square tenants supposedly live on due to cutthroat competition, I was intrigued. It was not as if RAM lent itself well to product differentiation, either. But if they were willing to sell it low, they could count on consumers like me to snap it up. And so I made a beeline to their outlet, hoping to conclude my business quickly and take the RAM where it belongs.

The salesman was kind enough to ask if I needed assistance the moment I stepped in, and upon hearing that I was interested in DDR2-533 RAM pointed them out to me. I then asked about the price, and he went over to a computer on the counter to check it out. This in itself wasn't odd since computer products are often repriced, making physical price tags somewhat of a luxury, but I wasn't expecting a reply of over S$100 from him.

"Erm, there seems to be a mistake..." I began, and indeed he seemed to recognize it as such. He conferred with a fellow employee, then was all smiles when he declared. "S$92".

The sales guy helpfully explained that "RAM prices are volatile" (RAM itself is, however) and when confronted with the rather wide disparity in price (they had helpfully laminated a copy of their price guide which did show S$56), he pointed out that the sheet was printed a week ago and "The prices change like the stock market, usually highest in the weekends, Monday to Friday it depends on your luck", then held out a sheaf of price guides from other stores and claimed that they follow their prices (as petrol stations do).

I was understandably doubtful, and excused myself saying I wanted to look around first. I then went to the next shop on my list and lo and behold, S$67 for 1GB. Makes the first store's claim of following prices seem rather incongruous - seeing as they probably have the same supplier and are selling exactly the same thing, I can't see how a S$25 markup might be justified, but I can see the appeal for the sellers of boosting their unit profit by 500% or more - why toil to sell five sticks and earn S$5 from each, when one can cream S$25 off a single fool? Pity the fellas who are too nice/lazy to check out the competition. Then again, it would be their own fault.

In Blink: The Power of Thinking Without Thinking, a study by Ian Ayres reveals that black people in the USA pay quite a bit more than whites for cars, due to the different quotations they get from salespeople. Ayres sent matched testers into auto show rooms where they found that car dealers gave the lowest initial offers to white men, followed by white women, black women, and finally black men. Even after 40 minutes of negotiating, the black guy shoppers were still being offered prices nearly $800 higher than the initial offer made to the white guys.

But that's not the part I want to emphasize here. The thing that struck me was that the salespeople don't have any respect for the "nice" people who don't bargain down their hopeful initial orders, and talk about them as idiots during their breaks. Considering that they likely pocket much if not all of the "extras", that's adding insult to injury. Come to think of it, such huge purchases are exactly where buyers should squeeze as much as they can - it doesn't make sense to quibble over ten cents with the wet market aunties when even the slightest cut goes into the hundreds or thousands of dollars when getting a car or a house.

Must remind myself of a brilliant piece of advice from a financial planning book I once read: "It is better to haggle like a rug merchant than become the seller's best pal by paying him more than he ever thought he could get." Yes, it's nice to be friendly and all, but there's a time and place for it, and being seated across a negotiating table isn't it.



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