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Old 12-13-2005, 04:23 PM
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subarubrat
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Default RE: HPI Baja 5B new release date

It isn't the price increase. That is really not the point at all. The point is that when a seller takes advace orders he is gaining a powerful market position. He can go to the manufacturer and say: Look, we have 11,000 orders locked in with a credit card number and since we are guranteeing that many sold units we want to get first priority on shipment and a discount for moving so many units. The additional benefit to Tower is that they are setting themselves apart as a major player by offering the item earlier than other retailers. Being able to actualy have a click here and order rather than the same placeholder ad with no order button. Being able to tell people they are a major player and have locked your order in when others can't. That marketing power and prestige are all benefits of offering a product up for pre-order before others. The consumer who signs up with tower is risking that tower will have the resources to deliver the product and do so as advertised. Your pre-order gives tower the clout and position and tower uses that to secure your product, it is an arrangement of mutual risk and benefit. The risk Tower takes is that the price might rise, and here it hasn't risen by much, because they jumped in too soon trying to beat others out. That is a risk of doing business. The consumer's risk in placing an advance order is that they might be going with a company that does not have the clout or resources to deliver the product. There are pleanty of people that placed pre-orders with the Xbox only to find out that Wal-mart got more shipment than their specialty store.

The problem in all this is that Tower has chosen to make the risk a one sided issue. Tower offered the pre-order before others and I placed my order. They used that to their advantage and when the price changed rather than standing by the bargain of mutual risk they called me asking for more money.