2007 Resolutions: Selling TVs is going to get tougher

The NPD Group puts out some great general market data on consumer electronics sales.  It is good recommended reading to know what people are buying.

If you haven't been following the biggest sellers this holiday season, it was about TVs.  Two of the top 5 selling items were TVs (LCD TVs at the top of the list, and Plasma TVs coming in third).   

However, just because a lot of TVs were sold, it doesn't mean that any of the big retailers made money selling them.  As Best Buy's CEO said:  "We will match or beat any pricing in the marketplace"  and they did.  They out-discounted Walmart - which does take some doing.

So, how are people going to make money selling TVs?  Best Buy believes that it will be through services - such as installation and transportation.  There's a really interesting interview that their CEO gave to Reuters, that is mostly about TVs.

So - our view is that making money selling TVs as a stand-alone business is going to be hard in 2007.   Prices are falling tremendously, and everyone's selling them (last time I walked into Home Depot, they were selling TVs!).   And the retailers have decided that they are going to make no money selling the product, they are just going to make money on the backend selling services.

This is going to be hard for the small seller to compete.  They don't have access to the services revenue.  We don't see this as a great opportunity in 2007 for the small seller - even though the market is exploding.