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Posts by MPC
This topic has been flogged to death by W5 and 20/20 and many other media enterprises claiming to be advocates for consumers. Don’t believe what you see in these specials if you think they are being aired for any reason other than to increase viewer ship and ratings you are mistaken, they are one sided broadcasts that are telling you only what you want to hear and that is “DON’T BUY THE EXTENDED WARRANTY”. Then you run into the store thinking you are armed with information you got on the internet or saw in a broadcast. If you have seen this then the staff at the store have seen it and already have a counter statement for it. I have written for my sales teams counters to all of these articles and broadcasts that came out from 2000-2007 so it’s not really ammunition. Consumer reports has some good information regarding the purchase of extended warranties on specific products. I will also give you some guidelines later in this post to help you make a more educated choice on the warranty purchase. My sales teams and I had many laughs over some of the articles we read and broadcasts we watched detailing the BAD in Warranty purchase. My personal favorite is
“THE INTERNET TOLD ME THAT ITS BAD TO BUY EXTENEDED WARRANTIES”.
Well my answer to that is simple
“YES THE INTERNET ALSO TOLD ME THAT THERE ARE HOT NAKED LADIES IN MY AREA WAITING TO MEET ME!…THE INTERNET LIED!”
I intend on sharing information on warranties and give recomendations to you the options and the choice is always yours in the end. What I am telling you here is based of my many years experience in sales and is designed as a guide to help you in making your decisions. It is not comprehensive nor malicious in any way, I will however be brutally honest when replying to comments and or questions regarding warranties and specific experiences if you choose to ask.
The Myths (both from shady sales people and from malicious reporting)
Extended Warranties are all profit. This is not completely true, the majority of extended warranty programs are not owned by the actual company that you are buying from. These warranties are covered by a larger company that deals with insurance and warranties only. The money is like insurance it all goes into a pool and that pool is drawn from when you require service on the product.
Buy the longest term it’s the best investment
Many companies offer long term warranties on products that don’t really need it. Some places bank on the fact that you will forget or replace the product before the warranty is used or expires. This is very prevalent on items that have a short lifecycle such as computers or media players etc. A product that get constant changes in its features each year is not worth spending the money for extended warranty on.
Most products break right after the manufacturers warranty expires
Yes there are a lot of disposable products that just generally become obsolete in less than a year anyway. These are the products that you should never buy extended warranty on unless it is a OCE – Over the Counter Exchange warranty. The point of repairing these products is pointless and a waste of your time. Products in this category are things like , Mp3 Players, Cell Phones, DVD Players, Computer Accessories, Any personal hygiene products etc .
More on this myth, many although this myth maybe true for some products but not major products. Things like televisions, stereos, speakers, furniture etc if you stick to a quality product are generally build very well and last a good number of years. The only time I would recommend to purchase the extended warranty on these products is if you cant foresee yourself affording to replace or repair the item during the term of the warranty. In this case I always recommend to buy the longest term you can afford.
If you truly believe in the purchase of an extended warranty then by all means you are purchasing yourself peace of mind kind of like life insurance. If you don’t see the value in it then DON’T let the sales person change your mind on this. You have all the control here and it is your choice, I have a drawer full of expired extended warranty on products that never needed repair. I also have had some products that had wonderful OCE warranties that kept going defective and I got replacements with the updated features. So here is my recommendations and lists based on my experience. This is not the bible so if you take the advice on not buying a warranty on a product because I said not to and the product is a lemon don’t blame me remember this paragraph it is YOUR CHOICE I am just giving you my opinion.
DO NOT BUY ON
Computers if you replace them frequently
MP3 Players (unless it is an OCE warranty)
Cell Phones (unless its OCE then purchase Warranty for the length of your contract only)
DO BUY ON
Any product that you are financing longer than the term of the warranty
Automobiles that are not leased – yes I am recommending extended warranties on automobiles if you are financing for long term or plan on keeping the vehicle for a long period of time.
Anything that offers an OCE warranty on it
Computers If you don’t plan on upgrading regularly
Well that’s it for now. Please leave a comment if you have questions or want more information.
Ok we all want a deal when we are shopping , remember what I said earlier though a deal is only a deal when you get a quality product at a fair price. This is the easiest part of the sales process, you want to get a salesperson in your pocket? It is as simple as saying this statement, “ I am buying today but if I can find the right product for my needs.” Yes it’s that simple you can have almost any sales person eating out of the palm of your hand by holding the proverbial carrot in front of them. If you want the best price on a product use the internet before you go shopping in the store and narrow down the search to 1-3 items. This is what the sales person is going to do during the initial sales process. Check the online stores and policies before you go to the retailer of choice to make your purchase. The online stores work on a much lower profit margin due to lowered overhead and gives you an idea of what you should be paying for your product. When you enter the retail store you are now armed with ammunition to get the best price. Most stores offer a price match policy and you should take advantage of this. If you want to maintain credibility with your sales rep under no circumstances should you mention what you saw this on E-Bay for. This is a total joke and you lose all the power in the conversation when you say this. E-Bay is an online auction not a retail store you never really know what you are going to get even from credible stores on E-Bay and the price you see may not have reached the reserve price.
When it comes to negotiating for the final price of your purchase you have all the ammo and its time to unleash this ammunition on the sales person. Don’t get caught up in the game of running back and forth to the manager for the best price. This futile process just frustrates everyone involved and does not really lead to a mutually agreeable sale. Once the price of the product is settled based on your research it is time to talk about the add on bits. On most sales in electronics there are cables and accessories that are required to make using this product a positive experience. The sales person should have informed you of these before the end of the sale if they haven’t then they did not do their job right. You have options and choices in these accessories. The sales person will always try and get you in to the BEST of the cables and accessories but in reality you don’t need the best but don’t grab the cheapest stuff. Get the cables etc. that are in the middle road to ensure a quality experience with your product. The top end stuff is not necessary unless you have to have the best.
These products are where the company make the most profit on generally from 50%GM to 80%GM plus on these items so make sure not to get ripped off. Look for the package deal and have the products itemized so you see what you are paying for each item. There are often packages that include the cables and accessories and give a total discount equal to the difference between what you found that you could buy the core product for on its own and the price the retailer sells it for. This is not a deal!
Well that should be enough on price for now. If you are interested in more information or have a question please feel free to leave a comment and I will reply with an answer.
Anyone that has read my resume will know that I spend many years in retail sales. Many of those years was in training new sales people and as a Sales Manager for a big box retail store. What I am going to tell you now is some secrets in the retail industry that are used to train the sales people how to play the psychological game of selling with you the consumer when you come in to the store. I trained and developed some top sales people in the company and managed top performing sales departments in two different stores. Here are some of the tools that I trained my team to use.
General Sales Process
The entire sales process from beginning to end is a game if you don’t agree with this try it out sometime. There is a winner and a loser in this game. The winner is the one who gets what they are working for in the end, the sales person get his/her sale or the customer leaves without purchasing the product that was trying to be forced on them. Sometimes the customer is going into the store to get something specific the game begins when the salesperson gets involved and tries to add the up sell products or extended warranties.
The best defense against these tactics and the up sell is not to get into a debate with the sales person or to demand a discount but simply ask tough questions designed to stump the knowledge of the sales person. Only the best of the best will be able to answer them all and if they can’t they will find out the answer for you right away. A sales person that in confident enough to say I don’t know but I will find out for you is someone that is worth dealing with and is generally going to be honest with you about your concerns.
Avoid like the plague that sales person who preys on the human need to get a “deal”. As I trained my sales people with a simple statement “A deal is only a deal when you get a quality product at a fair price”. Getting some no name 90day warranty brand for $200 less than the quality product is not a deal it’s a waste of money. You’ve seen them they litter the boxing day flyers and weekly sale flyers trying to get you into the stores to talk to a smooth sales person that will up sell you into something else. Its not bait and switch but really who wants the crappiest product just because it is cheap.
If you want to keep the sales people away tell them that you are not buying anything today you are just shopping around for some gift ideas and generally all but the eager newbies will go away and leave you alone.
That’s enough for an introduction more specifics in price and negotiating tactics etc will be coming soon…If you are interested in more information or have a specific question please feel free to leave a comment and I will reply with an answer.