Wednesday, January 06, 2010

Retail Silliness

After our triumphant return from our Costa Rica vacation, it's time to edit all those pictures and HD video I took using my tiny new Flip MinoHD Camcorder. Unfortunately, our new computer did not come with editing software, and I am looking for something a bit more sophisticated than the free software you can find everywhere on the web. I have been using Adobe Photoshop (for pictures) and Adobe Premiere for video for years, so I decided to try the new versions of the software before going for a purchase.

I downloaded the trial versions of both software pieces from Adobe, played around with them for a couple of days last weekend, made sure that the video editing and DVD burning worked the way I needed them too, and decided that all was well. It was time to make a purchase.

Since I already had the trial versions of both software pieces on my computer, what could be simpler than unlocking them, i.e. turning the software from the time limited trial version to the full thing using a software key. A quick hop onto the Adobe website gave me the answer I was looking for. A bundle of Photoshop and Premier would cost me $119 after a $30 mail-in rebate. Sounds fair enough, right? Just to be sure, I went online to check the price for the same bundle on Amazon. Guess what?An Adobe Photoshop & Premiere Elements 8 bundle on Amazon cost me only $89 after the same mail-in rebate...

Strange, no? Adobe has already got me to download their software. The cost to them of letting me unlock the software is essentially zero. Every cent I pay would go directly to them, since I was proposing to buy online and directly from Adobe. When I buy the same bundle on Amazon, Adobe is getting a lower price for their software - since Amazon also has to profit from the transaction. On top of this, shipping is included in the Amazon price, where no shipping charges exist for Adobe. Insane, no? Rather than take a higher profit margin, Adobe is forcing me to buy from Amazon. Forget this nonsense about cutting out the middle-man. In this case the middle-man (i.e. Amazon), appears to be the good guy...

To make things even more appetizing from my perspective, I made my purchase on Amazon through my Squidoo page - meaning that I will get an additional couple of percentage points in cash back on my purchases. Actually, this Squidoo business is probably worth a separate post.

What could explain Adobe's seemingly illogical pricing strategy? I am not ruling out simple stupidity, but I am guessing that channel conflict is the issue. The manufacturer - i.e. Adobe - does not want to undercut its distribution channel - i.e. Amazon, for fear of losing it's "shelf space" with a large retailer. Just goes to show you, in retail you can't take common sense pricing for granted. Don't assume that just because you are buying from the manufacturer you are paying the best possible price.

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3 comments:

Jessie said...

wow... that is some serious retail silliness... i probably wouldn't have kept looking after going straight to the manufacturer. I will going forward, not assume that it's the cheapest.

Ren said...

I've seen that pricing issue when trying to buy software direct from the developer for years. The real question I've had is why the developer even bothers to sell the software -- they should just point you to various distributors.

Shadox said...

Ren - That's a good point. I am not clear on why this would happen. Maybe they want to offer their products to folks who cannot get it from their distribution channel because of, for example, where they are located in the world.

I really don't know.