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Internet Newegg Guns for Amazon
Kristopher Kubicki (Blog) - April 22, 2008 12:30 PM
Print E-mail del.icio.us 69 comment(s) - last by FITCamaro.. on Apr 28 at 9:59 AM
The world's largest computer etailer poises itself as an alternative to the world's largest etailer

Newegg, often heralded for its fast shipping times and high-tech shipping facilities, isn't happy with being the largest computer e-tailer anymore. 

The company today announced NeweggMall.com, a spinoff of the Newegg.com website and business model.  Like Amazon, NeweggMall gives smaller retailers an outlet to showcase their wares but uses Newegg's logistics tracking and content management system. 

The end result is, well, Amazon.  Consumers can buy from the NeweggMall site, and products are drop-shipped from the reseller.  Newegg takes a portion of the revenue from the sale, which it justifies by handling the portal and logistics.  Depending on category, that portion can range from 6 to 15 percent, nearly identical to the revenue share structure at Amazon.com.

Newegg Mall is also the same division that manages the EggXpert.com forum, a community of blogs and forums created to provide product feedback on products featured at Newegg.com.  Certainly this forum will also be used for the new categories featured at Newegg Mall as well.

Newegg representatives tell DailyTech the new marketplace will officially launch on May 27, 2008, though the site appears to be taking orders already.   More information is available from the Newegg Mall About Page. 


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But...
By HaZaRd2K6 on 4/22/2008 1:19:49 PM , Rating: 5
Will they ship to Canada? I've been dying to take advantage of some deals on Newegg but they just will not ship to us poor sods in the Great White North. Our economies are so closely tied that it can't take that much to institute cross-border shipping. I mean, Fry's and ZipZoomFly both do it, so why not Newegg?




RE: But...
By just4U on 4/22/2008 1:30:43 PM , Rating: 3
I clicked the article and also being Canadian that was my first thought. NCIX (which advertises on this site) also ships to the States so one would think NewEgg could ship here.


RE: But...
By Mitch101 on 4/22/2008 5:39:27 PM , Rating: 5
NewEgg shipping prices in the last year have caused me to rethink a few purchases.

$5.99 shipping on a SD memory or USB flash drives? Come on guys.


RE: But...
By HotdogIT on 4/22/2008 5:49:46 PM , Rating: 4
They have a flat shipping cost they themselves are going to have to pay. I agree it's awkward and stupid to pay 6 bucks to ship a ~10 dollar part, but they're not unique in that regard.


RE: But...
By Basilisk on 4/22/2008 7:20:14 PM , Rating: 5
I've written to the Egg on this topic, and received a canned reply: I wrote something like "it's a shame you can't offer USPS shipment of small, inexpensive items -- like memory, MicroSD cards and some cables -- as you could cover packaging and postage for under $2. It would make shopping at the Egg more reasonable for small items." They responded with something like "We're sorry you are unhappy with our shipping costs as we try to satisfy all our customers."

Their profit model doesn't include encouraging low-cost orders. More surprisingly, they make little effort to reduce shipping costs when you bundle numerous small items into a decent total cost: I've been driven to other sites when ordering $60+ of numerous cables as the Egg didn't drop the effective per-item shipping cost as many vendors do. Then again, I don't know of any other place that regularly uses such ill-matched packaging: over the years I've spent $10K+ with the Egg and most of the items have occupied -well under- 20% of their box size. I've received minor items in a 1 cubic-foot box several times.

They aren't the worst, however: I once received a tiny item barely larger than a resistor in one of those cubic-foot boxes. Had to spread all the plastic "popcorn" across the floor to finally find the piece. Sigh.


RE: But...
By murphyslabrat on 4/23/2008 2:43:29 PM , Rating: 3
I just checked, and a $0.89 +$2.29 item went to $11.03 with an order of $10. There was no kind of "volume savings" listed, and I know that my total shipping costs for past orders have not been the sum of the shipping quotes.


RE: But...
By BoxCutterLou on 4/25/2008 4:26:04 PM , Rating: 3
quote:
I've received minor items in a 1 cubic-foot box several times


I have to reply to this, I work for a "Shipping/Supply Company", although I'm nolonger involved in the shiping process, I am involved with cost, contracts, etc. They simply do this because of cost. It cost too much to order different size boxes, I know it seems like a waste but you would be surprized at how much they save doing that. I know you guys like your numbers on this cite but you'll just have to trust me on that fact. As well, recieving your items in larger packages is better for you anyways. You should see what some of those very popular shiping services put your stuff through.


RE: But...
By Samus on 4/23/2008 1:34:07 AM , Rating: 2
UPS's minimum shipping price is about $4.00, and that's within the same zone.

It ain't the postal service.


RE: But...
By PWNettle on 4/23/2008 3:07:40 PM , Rating: 3
Paying shipping on a cheap items sucks but it's reality. Obvsiously there is going to be a minimum shipping cost. So, don't buy that one cheap item alone - bundle it with other stuff you want, or go to a retailed and have them order it (so they pay the shipping).

There are tons of advantages to shopping online but obviously buying one cheap item at a time isn't the most effective way to shop online.


RE: But...
By mattclary on 4/23/2008 8:48:09 AM , Rating: 2
It sucks for small orders, but most orders of 2 or 3 or more items, shipping works out pretty well. Over the last several years I have dropped a good $20k+ with them. Have a small computer repair business and order stuff from there VERY regularly.


RE: But...
By Seemonkeyscanfly on 4/23/2008 11:39:10 AM , Rating: 2
Try this...
find a small box. example: 4in x 4in x 4in. Put nothing inside. declared value under $100.00. Take a friend address (or your own) and go to a UPS store and ask them for the complete ship charge. Do not go on-line for the ship rate. If you ship enough items you'd already know that the on-line shipping cost is always several dollars cheaper then the real final cost that you are bill and/or charged.
Remember some one at UPS (any shipping company) is feeding their child, paying rent,... off the $5.99 they are charging you. No one is working for free. Add to this that the gas price is going up like it is. It will not be long before nothing will ship for under $10 or $15.
I suggest you just find a place that gives a fair rate when you purchase multiple items and always buy more then one item at a time.


RE: But...
By feraltoad on 4/23/2008 5:40:42 PM , Rating: 2
Unfortunately, Newegg doesn't combine shipping, add an item and add some shipping charges regardless of weight. I guess they want to subsidize the shipping of other items they ship for cheap. Buying multiple items at Amazon will save you money.

I have to pay tax on all Newegg purchases since they have a distribution center in Tennessee. After factoring in Newegg's shipping charges I can almost always purchase items cheaper elsewhere. Find you what you want on Newegg, and buy it somewhere else is how it goes for me usually.


RE: But...
By Polynikes on 4/23/2008 12:19:25 PM , Rating: 2
True, but there are plenty of more expensive items with ridiculously cheap 3 day shipping or free ground shipping.


RE: But...
By BMFPitt on 4/24/2008 3:43:07 PM , Rating: 2
I just wish they had a warehouse in Delaware, rather than NJ. That way I'd still get next-day shipping, but wouldn't pay sales tax.


RE: But...
By cochy on 4/22/2008 1:31:58 PM , Rating: 2
According to ZipZoomFly's website they only ship to the US.

It's not worth it for them to ship to Canada. Our market is tiny in comparisson. Their core-competency is low prices/fast shipping/good customer service. They would be forced to get away from those if they shipped cross-border.


RE: But...
By HaZaRd2K6 on 4/22/2008 1:36:52 PM , Rating: 2
I ordered a new CPU early last year from ZipZoomFly and I got it no problem in about a week. So unless they've changed policy (totally possible) they do (or rather, did) ship to Canada.


RE: But...
By Znamya3 on 4/22/2008 1:40:39 PM , Rating: 5
I think it has to do with the "The American-Canadian War" started by the death of Kenny & the MAC (Mothers Against Canada) incident.


RE: But...
By mmntech on 4/22/2008 1:50:26 PM , Rating: 3
I thought it was because we went on strike for more internet monah, fwend. I buy most of my stuff through NCIX. However, they can be expensive at times. Electronics in general are overpriced here. You can get some cheap stuff from Direct Canada, which seems to be a subsidiary of NCIX. It's too bad there are no decent parts retailers out east. All we have in Ontario is Tiger Direct and Canada Computers. Both are terrible stores.

I don't think it would really cost these people like Newegg more to ship to Canada but I do think it being a relatively small market plays a part.


RE: But...
By Etsp on 4/22/2008 1:59:49 PM , Rating: 4
I ain't your fwend bhudday!


RE: But...
By UppityMatt on 4/22/2008 2:09:07 PM , Rating: 2
He's not your Guy Fwend!


RE: But...
By fuser197 on 4/22/2008 3:50:04 PM , Rating: 3
I'm not your buddy, guy!


RE: But...
By just4U on 4/22/2008 2:09:18 PM , Rating: 2
Hell no, They ship to Peurto Rico so not shipping to Canada doesn't have to do with our market size. Perhaps cross border logistic's or applicable taxes? I don't know.

As to NCIX. Overall they are quite good price wise. They offer some comparable deals to what you'd expect from Newegg but yeah... our higher prices overall make it seem that they are quite a bit more expensive.

I was reading a thread over there a few days back where a user was complaining that a American could buy the same CPU for $50 less and he was wondering when it would be comparable. A Ncix guy replied that you could get similiar pricing in lots of 1000 but that was the only way. Just some things are way more here and I've not yet figured out why it is. Taxes play a roll but there is more to it then that.


RE: But...
By just4U on 4/22/2008 6:23:56 PM , Rating: 2
hmmm scratching my head on the downrating ... Odd, I can't see where I typed anything that might be considered off .. ah well.


RE: But...
By mindless1 on 4/24/2008 11:27:59 PM , Rating: 2
You wrote hell.


RE: But...
By Desslok on 4/22/2008 8:33:39 PM , Rating: 2
Puerto Rico is part of the United States that is why they ship there.


RE: But...
By just4U on 4/23/2008 3:34:11 AM , Rating: 2
Well, they say you learn something new everyday... <grin> and I did not know that.


RE: But...
By HaZaRd2K6 on 4/22/2008 4:15:36 PM , Rating: 2
Hey, we're getting a lot better at CC. We've just started carrying more product from a bunch of high-end retailers. Although I will admit some of our product lines are sorely lacking (motherboards especially).


RE: But...
By bryanW1995 on 4/22/2008 6:03:06 PM , Rating: 2
what are you talking "aboot"?


RE: But...
By kmmatney on 4/22/2008 2:41:43 PM , Rating: 3
I have noticed that when I sell computer parts on Ebay, it seems like I get a lot of bids from Canadians, since I ship to Canada. I always wondered about this, but this explains why, I think.


RE: But...
By glitchc on 4/22/2008 4:52:03 PM , Rating: 2
And yet they call it the "world's" greatest. Heck even Amazon doesn't ship quite a few of its electronics items to Canada. Perhaps DT should replace "world's" with "US and surrounding countries with tariff-friendly trade agreements."

I wonder what happened to NAFTA in all of this....


RE: But...
By Snipester on 4/22/2008 6:49:55 PM , Rating: 2
NAFTA only allows no tax if the item is MADE in NA (USA/CAN/MEXICO)

Its funny because my friend managed to get through the border without paying tax on a vehicle b/c the customs guy was a kid and wasnt sure what he was doing.

I'm not sure about made in and assembled in differences though.

Also since the Nissan Versa is assembled in mexico maybe its cheaper to buy in the US? who knows....


RE: But...
By Motoman on 4/22/2008 4:57:46 PM , Rating: 2
Speaking as a guy who regularly ships lots of stuff, I can say that probably one big reason is that there are massive increases in costs when shipping something to Canada, rather than within the US and it's territories (like Puerto Rico). From MN, I can ship to Hawaii for about half the cost it would take to send something to Canada...which at that point is a couple thousand miles closer.

I believe a lot has to do with import tariffs and taxes, but perhaps also something systemic with UPS, FedEX, USPS, etc. in how they charge for shipping to Canada.

Full disclosure: while I am American (f#ck yeah!), my wife is Canadian, and I have quite a bit of experience shipping to and from Canada. Recently, when buying gifts for her family in Canada, I just go to the Canadian websites of Canadian businesses (like Best Buy) and purchase that way. You can't buy something on BestBuy.com and send it to Canada, but you can buy it on BestBuy.ca and it's no problem.

So don't knock NewEgg et al for not wanting to ship to Canada - the problem lies not with the vendor.


RE: But...
By Motoman on 4/22/2008 4:59:36 PM , Rating: 2
Oh, and forgot to mention my quick example - I used to sell lots of stuff on eBay (until they changed their rules again)...as a rule of thumb, I doubled my USPS shipping costs when a Canadian buyer bought an item.

It's pretty much 50/50 whether or not that tactic actually covered my shipping cost. Yes...it's that bad. Double or more.


RE: But...
By just4U on 4/22/2008 6:27:32 PM , Rating: 2
MMM I guess that's where Newegg.ca might come in handy.. If they ever get around to doing it. I see the url is reserved. (A coming soon msg from the site but it's been there for some time)


International credit cards
By Nehemoth on 4/22/2008 1:47:30 PM , Rating: 3
quote:
We do not currently accept international credit cards at this time.


More than three years and still they're don't accept International Credit Cards even if the shipping address are located in the United States, this is by far the only thing that I hate (really hate) about Newegg policy.

For a man who leave outside united states and know that even with the shipping and handling and taxes the products are always cheaper and plus you get the things that you will never get at your own country is a non-brainier situation.

I don't know why Newegg don't accept Internationals Credit Cards as Amazon does, sadly that Amazon don't sell more computer stuff.




RE: International credit cards
By Pezman37 on 4/22/2008 3:21:00 PM , Rating: 2
If they are "taking on Amazon" it wouldn't surprise me if they went more global, or at least add Canada.


RE: International credit cards
By cochy on 4/22/2008 3:56:24 PM , Rating: 2
Last I checked Amazon doens't ship much else besides book and videos to Canada.


RE: International credit cards
By Nehemoth on 4/22/2008 4:02:54 PM , Rating: 2
Well but are less they're accept International Credit Cards and is easy to use a Courier, P.O. Box or a third party company.


RE: International credit cards
By Nehemoth on 4/22/2008 4:00:29 PM , Rating: 2
The World, The Complete World.....


RE: International credit cards
By xti on 4/24/2008 3:38:53 PM , Rating: 2
cant you use paypal as an intermediate step?


RE: International credit cards
By ertomas on 4/24/2008 11:10:25 PM , Rating: 2
No because they only ship to verified addresses and paypal only verifies your credit card's billing address, so if your CC is issued outside the USA you won't be able to verify an address on the USA...

I can barely understand what I wrote up there so in two words:

No Paypal...

I tried... A lot...


Not anywhere in the same league as amazon
By halcyon on 4/22/2008 3:32:32 PM , Rating: 5
Let' see:

- Amazon ships worldwide. NE doesn't
- Amazon accepts credit cards from all over the world. NE doesn't
- Amazon has a huge selection. NE doesn't
- Amazon understands how to build a web site that offers value, even if you don't buy from them. NE currently doesn't
- Amazon sells even second hand goods. NE doesn't

I could go on, but you get the idea.

When NE recognizes there is the "rest of the world" with 6.35 billion people in it, well, you can then call me back.




By Nehemoth on 4/22/2008 4:32:31 PM , Rating: 2
Really well said.


By ertomas on 4/22/2008 8:18:55 PM , Rating: 2
Indeed. All true points.

I can't use my credit card on NE since they won't accept a CC issued outside the USA...

Amazon FTW!


By FITCamaro on 4/28/2008 9:59:05 AM , Rating: 2
I find nothing wrong with caring only about the consumers of the country you live and are based in. Newegg seems to be doing just fine.


Shipping
By Slash3 on 4/22/2008 1:25:13 PM , Rating: 2
Maybe this will mean other shipping options for people like myself who live in Alaska (or Hawaii, or Canada for that matter). Trying to buy a $15 card reader and then paying a minimum of $15 for 2nd day air gets old after a few purchases.




RE: Shipping
By thejez on 4/22/2008 1:53:33 PM , Rating: 2
is someone holding you hostage in Alaska?


RE: Shipping
By Etsp on 4/22/2008 2:01:19 PM , Rating: 5
Global warming =P


RE: Shipping
By ebakke on 4/22/08, Rating: -1
RE: Shipping
By ninjit on 4/22/2008 2:03:31 PM , Rating: 2
Heh, I'd then consider your annual oil-rebate as "free shipping" money if you're really going to complain.


funny - I thought it was the other way around
By bigpow on 4/22/2008 7:02:03 PM , Rating: 3
I've been with both (newegg and amazon) since as long as I could remember.

I have to say, in the beginning, newegg was super awesome since they had the lowest price and very often, with free shipping.

Today, newegg is a shipping charging price gouger.
I still buy from newegg, but only if it's the cheapest price and/or comes with free shipping.

amazon, on the other hand, is starting to sell computer stuff. Although the price is not that good, but it's always free shipping (2-day for me) and no tax.

I can see, in the near future, I'll be using amazon even for my pc parts purchases.




RE: funny - I thought it was the other way around
By cubby1223 on 4/23/2008 4:48:42 AM , Rating: 2
Seriously, how hard is it for people to understand?!!

Free shipping == higher base price


By glennpratt on 4/23/2008 9:14:50 AM , Rating: 2
Amazon has very low shipping costs, while maintaining competitive prices (at least in my experience). They also have more reasonable shipping on small items. And their free shipping rarely means higher base (I cross shop all the time). I'm buying a TV from them that has free shipping, and it's by far the lowest price anywhere, regardless of shipping (which is $70+ on most sites).

Oh, and then there is Amazon Prime...


By crimson117 on 4/23/2008 12:27:26 PM , Rating: 2
Amazon Prime is really nice and I use it myself, but there's no way it makes money for them.

Well, it might help to drive sales, but 2-day shipping is not cheap.


Isn't Amazon all about books and DVDs?
By DefFox on 4/22/2008 4:50:26 PM , Rating: 2
I really liked Newegg's DVD store before they closed it down. To compete with Amazon that should have been the first thing resurrected.

It also would be nice if they shipped to Canada. I have to have everything sent to family in the US, and pick it up when I visit.




By Oregonian2 on 4/22/2008 5:32:56 PM , Rating: 2
I liked NewEgg in the past quite a bit, but I think they've gone downhill (especially with prices) the last two or three years. I buy from others a lot more (things that would have gone to NewEgg previously).


Wow
By KenGoding on 4/22/2008 1:21:43 PM , Rating: 3
If they can have stuff like Amazon with the quickness of Newegg I am all for it! I'll be looking into them regularly when I need stuff.




Newegg Should Stick To Strengths
By jpeyton on 4/22/2008 3:40:30 PM , Rating: 3
This move is akin to Newegg launching an auction site to take on eBay.

Newegg will continue to be a leader for computers and consumer electronics. But I doubt they'll even make a dent in Amazon's market.




I like Newegg but...
By mikefarinha on 4/22/2008 1:22:47 PM , Rating: 2
I like Newegg a lot for buying computer parts. Even though I have to pay taxes on it, since I live in CA, they are still cheaper than most. Plus they have great customer service.

But this is a true David vs Goliath match-up if they are really gunning for Amazon.

Either way I wish them luck.




I'm not sure this is a great idea.
By bigboxes on 4/22/2008 2:01:18 PM , Rating: 2
Why mess up a good thing and get away from what they do best? I love the egg and get most of my parts from them. I'd rather they stick to computer parts and expand to Canada then to move away from their core business. I'm sure it is only minimal, but that's how it starts out and then they're trying to be an Amazon clone. FWIW, I think that both Newegg and Amazon have great customer service. I just don't want to lose what is special about the egg.




By Swedishelk on 4/22/2008 3:06:42 PM , Rating: 2
NeweggMall gives smaller retailers an outlet to showcase their wares but uses Newegg's logistics tracking and content management system

More 5 for 1 Eeepc's mixups on the way in a grand scale.




Lowest prices galore.
By teckytech9 on 4/22/2008 7:44:52 PM , Rating: 2
I think a better approach is to offer lowest price quotes on select merchandise such as sites like pricegrabber.com. It's probable that in the future, more etailers will offer their wares on their own website, thus bypassing the need to go directly to amazon, newegg, or others to save on additional fees incurred for each sale transaction.

Still, for computer parts, newegg has the best selection and better than the bricks and mortars - "Frys Electronics." As for MFR rebates, newegg always delivers fast, and Frys seems to take the longest.

What is unclear is that some small etailers list their wares on big etailer sites, then may offer lower prices when purchased directly versus purchases from the big etailer sites. This is akin to booking travel arrangements directly versus buying a package from a popular internet travel company. Perhaps all these product listings could invariably make searching for items at the "lowest price" much easier for the consumer.




Well..
By shaw on 4/22/2008 8:25:29 PM , Rating: 2
I think like 95% of my purchases from Amazon.com are discounted books. Every now and again some obscure DVD movie. For now amazon.com is my home.




Not really another Amazon
By wordsworm on 4/22/2008 9:48:16 PM , Rating: 2
I took a quick look at Neweggmall.com and compared it to Amazon.com. I don't find them comparable at all. Made me think more along the lines of sears.com with menu listings such as clothes and landscaping tools. I guess Amazon has some of that stuff as well, but I think of them purely as a source of entertainment for things such as DVDs and books. I don't see either of these things at neweggmall.




International orders
By anartik on 4/23/2008 1:26:24 PM , Rating: 2
Speaking as an emerchant that USED to ship worldwide from millisec... Its not worth the hassle or risk of reputation. Most of the orders go well but I had many lost once in customs or delayed by customs for no good reason for weeks or even months. Add to that rediculous fees and taxes if they do happen to snag your order. I've had problems all over Europe and Canada was always a problem. So when customs screws it up and/or tacks on large fees who do you think the customer blames? The merchant to the point of doing a CC chargeback. Call me stupid but with the new streamlined priority mail to Canada I am considering shipping to Canada again for my new business at least on a trial basis.




NY in the very near future
By 325hhee on 4/25/2008 10:59:04 AM , Rating: 2
Are probably going to start buying in the local stores again, since the damn law passed that NYers have to start paying sales taxes on internet orders.

It's bad enough our taxes are high, just for living in NYC, you're already paying 10-20% more than the rest of the US for anything, food, clothing, don't get me started on bars, etc. and the only relief some of us lower middle class people have as an option is ordering online, tax free with lower prices. Although most of the stuff you have to pay shipping for, that can be the so called taxes. Now to pay taxes and shipping costs, and shipping costs are taxable as well, that's just going to raise prices so much, there are no more deals online. The end is near, and with CompUSA being closed, Circuit City on the verge of starting to close it's retail stores, there is almost no where to shop for good prices except for Best Buys. We're going to need a Newegg store, or a Fry's out here, fast.

Hey Fry's and Newegg, open up your retail stores here.




Would have probably been better
By Sylar on 4/22/2008 3:26:35 PM , Rating: 1
if they gunned for eBay instead.

that is all...




FREE 3DAY SHIPPING ON GTA IV!!!
By crazyblackman on 4/22/08, Rating: -1
"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard

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