Originally posted by: chazzzer
Originally posted by: Fallengod
From what one of the OCZ reps said, he believes DDR2 prices to be a pretty much rock bottom. They should be stabilizing. Id doubt that youll find them dropping much more. I mean, this stuff for $85AR, I couldnt grasp it going down much more. Without a rebate is hard to say. I think its the preferences of certain companies and how they drop prices.
As someone that used to work in the computer software & hardware distribution business, I can tell you that there are two key reasons for doing rebates: 1) The manufacturer can write off rebates as an advertising/marketing expense; or 2) The reseller has a good quantity of product that they paid a too much money for recently and would have to sell at a loss now, and they want a credit/refund.
Rebate type #1 is the type where the manufacturer offers a rebate regardless of who the seller is (as long as they're an authorized reseller), like Seagate giving a $30 rebate on their 500GB drives during the month of May. Sure, they're counting on a good percentage of people not remembering to send in for the rebates, but the ones that do can written off as an expense.
Rebate type #2 is far more common. This is the $30 rebate on Seagate 500GB drives purchased between 5/1/07 and 5/7/07, only from Newegg.com. The manufacturer is in a bind, because the reseller is stuck holding over-valued product. It may or may not be the reseller's fault -- they could have bought too much inventory, or the price could have dropped right after they bought a reasonable amount -- either way, they feel like they've been screwed and want compensation. No manufacturer ever wants to refund money, accept a return, give credit on an outstanding invoice or give away free product to allow the reseller to cost-average to be able to meet the competition's price. Instead they'll often choose to offer a reseller-specific rebate to allow that reseller to get rid of their overstock. As always, the manufacturer is hoping that a good percentage of buyers won't remember to send in for the rebate...if everyone did, they might as well have just gone with one of the other alternatives. A lot of the time you can spot these because the rebate amounts are very high compared to the value of the product (like this one) or because the reseller never restocks during the rebate period once they've run out of the product. (Frys.com does the latter a lot, but they'll keep accepting backorders. If you don't pay attention and cancel your order in time, they'll go ahead and ship it after the rebate has expired. This makes them a large profit, and makes you the one that gets screwed in the deal.)
Another rebate advantage to a manufacturer is the ability to spread the loss over time, hence the 8-12 week wait for the rebate check. A lot of people think that they're trying to make bank interest off of your money, but how much interest can you really make these days? It's all about averaging out the loss, or moving it from Q1 to Q2 or whatever.
Okay, end of the boring information about rebates; I just thought some might find it interesting to know why they exist.