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http://www.macnn.com/articles/01/04/12/outpost.com.reports/

Outpost.com reports $10.1 million Q4 loss

updated 11:30 am EDT, Thu April 12, 2001

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Popular electronics reseller Outpost.com today reported a Q4 loss of $10.1 million, compared with a loss of $9.8 million in the year-ago quarter. The company stated it is considering a number of strategic options given the state of the economy. Outpost, which was best known for its free overnight shipping, recently axed that policy and now offers free 2-day shipping on orders of $500 or more.

by MacNN Staff

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04/12, 11:42am | report spam | close Reply | delete
I love outpost

I love buying from outpost. Hope they stay around. I miss the free overnite shipping.

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04/12, 11:43am | report spam | close Reply | delete
What really?

You mean you can't sell products under your cost and ship them for free and still make money? Life just isn't fair!

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04/12, 11:49am | report spam | close Reply | delete
Damn Economy

It's a shame. I too chose to buy my products from Outpost simply because the prices were attractive and weighted against the free overnight shipping was always the better deal over they're competitors charging tax and shipping.

Typical, nothing good lasts forever. Now hopefully I can say the same about unemployment!

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04/12, 12:20pm | report spam | close Reply | delete
Gotta balance costs

When everything had free shipping, and the prices were good, I would often try things on a lark. Now that it costs $13 for shipping, and the prices are generally the same as brick and mortar stores, it is less attractive.

This is the bane of the online retailer: they do not pay sales tax, so they have a 7.5% advantage over a brick and mortar store. This causes brick and mortar stores to claim unfair competition. When this is balanced against the $13 shipping, though, the balance becomes much fairer for the brick and mortar store. What the stores forget is that online stores often have better selection, better policies, and a better trained customer service department, and those are all things where a regular store should have an advantage.

I will go to Fry's today, most like. If they have a Mac title I want, I may buy it - I have in the past. On the other hand, I am not betting that they will, as they tend to have a lousy selection, inferior prices, and a sales staff who knows little to nothing about Macs.

Scott

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04/12, 12:48pm | report spam | close Reply | delete
Cyberian

I started buying from them way before others even started thining about selling on the internet. Back when they were Cyberian, Cyberian Outpost, etc.

The used to have the best prices anywhere, but you had to pay for shipping.

Then they raised their prices and I started to shop elsewhere.

Then came the free overnight shipping with prices raised even further - but still cheaper overall due to the shipping.

Then free overnight for $100 or more on an order (at which point I stopped purchasing through them).

Now it's $500 or more for free 2-3 day shipping with even higher prices.

Does anyone even buy from them anymore?? It's cheaper to take your time to drive to a local shop, pay the inflated price AND tax, and drive back!

It's sad to see a formerly great place like that get mismanaged right down the s******.

There is no excuse for a web retailer to s**** up like this. They sell to a global audience, have no brick & mortar store costs, low to no inventory costs, a wider variety of products vs. B & M stores, lower overall employee costs, etc - or at least they should have.

So where did you spend all the money guys? Could it be on the salaries and bonuses for the bazillionaire CEO's and other upper mgmt people?

There's only two reasons a .com should ever fail:

1) It was a STUPID idea in the first place, but got funding from equally STUPID venture capitalists.

2) It was mis-managed right into the ground.

Hey Outpost, which one were you??

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04/12, 01:13pm | report spam | close Reply | delete
Ingorant Consumers

You liked Outpost because they operated a business with a model that sold items and shipped them below their cost. Period. Now you have the nerve and ignorance to blast them for being mismanaged?

This is the way that all mail order is going...bankrupt. Why? Because they all decided that during the boomtimes of the internet craze they only priority was volume. Profits, my friends, are what keeps a business afloat.

Guess what...your greed at getting the lowest costs will lead you to even worse of a retail experience...now that the real stores are bankrupt, having been forced to play a losing game.

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04/12, 01:27pm | report spam | close Reply | delete
Re: Cyberian

There is no excuse for a web retailer to s**** up like this. They sell to a global audience, have no brick & mortar store costs, low to no inventory costs, a wider variety of products vs. B & M stores, lower overall employee costs, etc - or at least they should have.

Its this kind of stupid thinking that started the great ".com" frenzy several years ago. "We won't have a true store, so we can sell cheaper and make tons of cash!". Please...

On-line stores still need inventory. (If they don't have inventory, then your etailer is just a middle-man, and nobody would buy from them if they could buy direct. ) Which means they need warehousing and storage and personnel and everything else, like a "real" store. The only thing they don't have is a front door and an expensive location. But that's offset by shipping costs, 24-hour customer support, web development/support team, etc. And customer support has to be high quality too, because, for some reason, people will stand by and take crappy service from a Best Buy or CompUSA, but if it takes an hour to talk to your on-line store, you yell and scream.

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04/12, 01:29pm | report spam | close Reply | delete
Reality Sucks

I'll have to admit it: I've "abused" Outpost's erstwhile largesse (sorry to have spelt these rite) and ordered a $5 USB cable at 9 p.m. only to have a uniformed man come to my door with it at 9 the very next morning. I knew this just couldn't last, but I just had to keep acquiring stuff this way. It was just too easy. Now I find myself in deep melancholy, unable to awake and start my day without a little hand-delivered techno-chatske or two. And my beloved economy suffers too! Outpost, where are ye, my luv?

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04/12, 01:56pm | report spam | close Reply | delete
get real

Like the man said, just because Outpost is on-line doesn't mean it doesn't have costs. How do you think they were able to ship overnight and provide such great service? Because they maintain INVENTORY! And lots of it - how many brick-and-mortar retailers do you know have 20 different types of Firewire cables in stock? Even Amazon, the paragon of on-line retailers, ended up building its own warehouses in order to provide good service and selection. Yet they're still expected to sell at a significant discount.

Same thing happened to buy.com - they use to have the best prices because they thought they could survive by selling goods below cost and make up the difference with advertising, etc. Fat chance. I usually only buy from them now when they offer free shipping.

I too will miss being able to order items at a discounted, tax-free price from Outpost in the evening and having them delivered to my door, halfway across the country, the next morning, for free. Someday we will tell our grandchildren about it.

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04/12, 02:05pm | report spam | close Reply | delete
Love' em

Well I still love outpost!
They still have good deals and the people are wonderful to talk to.

Hang in there Outpost!

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04/12, 02:40pm | report spam | close Reply | delete
still with them

I used to make lots of small $30-$100 purchases from them all the time. I don't anymore, but I still check with them. $9 2nd day shipping is still about the same many companies charge for ground shipping. And for a little more, I still get my stuff the next day, and I can order pretty late at night.

But I do miss the free shipping and that is what made them stand out from the rest of the retailers out there. They no longer have this.

But they do have 24/7 phone customer service. And that is worth its weight in gold. Buy.com only lets you email them and they take 12 hours to respond. I have stopped buying from buy.com since they started this "enhancement" as they call it.

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04/12, 03:12pm | report spam | close Reply | delete
Do Like Amtrak

If the Feds can fund a perennial loser like Amtrak, why not a marvelous operation like Outpost? Just askin'...

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04/12, 04:27pm | report spam | close Reply | delete
Outpost

They clearly never sold much below cost; they just operated on a tighter margin than a Computerware (for instance). For a while, increased margins and free shipping put them at the top of the industry.... but then OPEC decided to lower production. As far as I can tell, Outpost's overall prices (cost + shipping) are still among the lowest on the Web for anyone with their selection, but it's hard to dig yourself out of that deep a hole when the economy is in neutral.

Since I'm the only one with a credit card in a project of 40 - 50 people, I buy A Lot of Stuff on the Web. Driving to a brick-and-mortar isn't even in the cards. I only hope Outpost and their competitors find a model that allows them to survive and even thrive while offering reasonable prices.

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04/12, 04:57pm | report spam | close Reply | delete
RE: Cyberian

I think some of you were missing his/her point.

They said "low to no inventory."
- Of course they have inventory, but they ship directly from their warehouse, unlike brick and mortar stores that not only have multiple warehouses, but have to maintain local inventory as well!

They also said "lower overall employee costs"
- This one is obvious. B and M stores have everything that Outpost does (warehouse staff, shipping costs [to get the goods to their storefront], support teams, developers, IS Dept's, etc) AND B and M's need tons of staff for their storefronts. Not to mention all the costs associated with all that extra stuff. They also have to pay lease costs for space, insurance for the same, utilities, and so on.

- As far as customer support - a well managed company does everything it can to solve the customers problems BEFORE the customer has to talk to a live support person. Customer Support is a COST CENTER. Outpost's on-line customer support sucked (but was improving).

Also - what the heck were they doing providing any other customer support other than, "here's your tracking number" (for the numnuts that couldn't pull it up on the web) and "here's your RMA #" ???

- Someone else mentioned greed. That's the first time I ever heard someone use the term that way. That a smart shopper is somehow greedy??

- As far as the free shipping goes: If they were losing money on that deal, isn't it obvious that it was a piss poor management decision?? and and even worse one to continue to offer it until they post a US$10M loss?

If Outpost was managed properly, their cost savings should have allowed them to continue to offer lower prices on their products and reasonable shipping costs to all of their customers.

Also, I would tend to agree with the thinking about the reasons so many .com's went bust. Not everything translates to the web. Venture capitalists didn't know this and tossed money everywhere in case of a major hit (problem #1). The well managed .com's with good business plans and tightly controlled expenditures are currently kicking butt, the mis-managed ones are having their stuff auctioned off (problem #2). There are probably other reasons some .com's fail, but I'd bet the vast majority of them can be traced back to these two items.

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04/12, 05:41pm | report spam | close Reply | delete
Why is everyone bagging

on Outpost now? Is it because they're finally becoming realistic about their finances and have started charging for shipping? Get over it. $13 overnight is still a good deal better than most outfits, and those that charge less don't have the customer service that Outpost does.

I needed a new monitor quickly this week; a model that no local store carries. I challenge you to find another outfit that will ship you a 50lb box for $13 overnight. From an outfit that you can trust if something goes wrong.

Different e-tailers distribute their costs differently. Some build it into the item price, while others build it into the shipping price.

To those of you secretly wishing that Outpost goes down because they've somehow 'wronged' you by trying not to lose money on your order -- what alternatives do you have? Let's hear them. Cost, service, etc. everything taken into account?

Any alternatives you can name will probably fall down in one way or the other -- big "name brand" stores will probably cost more, and the cheaper ones are probably suffering in the same situation that Outpost is in now. Buy.com, Onvia, Egghead...no one is immune. Of this bunch, I'd rather keep Outpost.

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04/12, 06:08pm | report spam | close Reply | delete
Not everyone is "bagging

why make an observation like this unless you're incapable of actually observing? Very few of the comments here were disparaging of Outpost. Just about everybody (incl. this writer) hopes they're around as long as, say, Amazon.com. It's a tough biz, but some of these outfits will actually survive and prosper. I hope Outpost is among them.

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04/12, 06:29pm | report spam | close Reply | delete
Re: Cyberian

Also, I would tend to agree with the thinking about the reasons so many .com's went bust. Not everything translates to the web. Venture capitalists didn't know this and tossed money everywhere in case of a major hit (problem #1).
This part was due to a few hits early, then everyone started talking like the Internet was "THE" thing. Anything internet related, people (not just venture capitalists after a company goes IPO) just tossed money in.

The well managed .com's with good business plans and tightly controlled expenditures are currently kicking butt, the mis-managed ones are having their stuff auctioned off (problem #2).
Sorry, but I have to disagree with you here. 99% of the .com's are/were mismanaged. Reason: The people who started them were techie types, not managers. In general, the .com stores that are surviving (and perhaps even making money) happen to be mostly B&M stores with an online presence. They know what they're doing. Yahoo is one of the few .coms that actually ever made money (remember, regardless of stock price, most of these companies always had losing quarters). Amazon, one of the earliest etailers, the one the others aspired, is losing cash big time (and has been for many years) and may go under before the end of the year.

The main problem is, you can't mix "Venture Capatilists" and "Good Management" together. The money guys want returns on investment. So they want a company to grow big, and quickly, then go IPO or get bought out, at a high price. But to do this, you need to extend yourself too much, overspend to buy out rivals or to do large expansion. And through all this, try to gain customers and overall revenue through promotions and advertisements. That's why you'd hear some .com announce record revenues, and, oh yeah, they lost $200 million in the process. There's only so many losing quarters a company can go through before the money guys go "Um, we need to see profit, and now". That was why .com when .dead.

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04/12, 07:00pm | report spam | close Reply | delete
why...?

Why do so many of the "warm fuzzy" posts here sound like they came from a secretary or receptionist working at Outpost?........hmmmmmmm.....

To buyers out there: shop around and get the best deal...Photoshop is Photoshop (or what ever you are buying) no matter where you buy it..

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04/12, 07:21pm | report spam | close Reply | delete
Get what you pay for

Service is worth something, as is having a reliable reseller who will back the product. So if you like the company, accept the fact that they need to make money, too, and pay what it costs. Truth is, a good vendor that charges a few extra bucks more than a no-service, no frills cheapie or graymarket operation is worth it. And then there are those companies (Other World comes to mind) that provide great products at great prices, with service to boot.

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04/12, 11:12pm | report spam | close Reply | delete
get the best deal....

I agree about getting the best deal... but that includes my time. I can find and order most things from Outpost in 5 minutes instead of spending 1 hour comparing prices from all over the internet. That time is worth money, and if I can bill 15 minutes of it, I will more than make up the few dollars some other company is underselling Outpost.

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04/13, 01:45am | report spam | close Reply | delete
so,

you did the $5 USB cable thing 2? And frys wanted $16 for it...

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04/16, 10:29am | report spam | close Reply | delete
Still Love Outpost

C'mon, can't we give them points for service? I love their service, packaging and website. Not too great for Mac users, but I still look for specials there, and respect them for being so curteous in such a dog-eat-dog marketplace.

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Outpost.com reports $10.1 million Q4 loss

updated 11:30 am EDT, Thu April 12, 2001

I love outpost

What really?

Damn Economy

Gotta balance costs

Cyberian

Ingorant Consumers

Re: Cyberian

Reality Sucks

get real

Love' em

still with them

Do Like Amtrak

Outpost

RE: Cyberian

Why is everyone bagging

Not everyone is "bagging

Re: Cyberian

why...?

Get what you pay for

get the best deal....

so,

Still Love Outpost

Login Here

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Outpost.com reports $10.1 million Q4 loss

updated 11:30 am EDT, Thu April 12, 2001

Related Articles

Recent Articles

I love outpost

What really?

Damn Economy

Gotta balance costs

Cyberian

Ingorant Consumers

Re: Cyberian

Reality Sucks

get real

Love' em

still with them

Do Like Amtrak

Outpost

RE: Cyberian

Why is everyone bagging

Not everyone is "bagging

Re: Cyberian

why...?

Get what you pay for

get the best deal....

so,

Still Love Outpost

Login Here

Register for our weekly email newsletter:

Connect tools:

Subscribe

to our RSS

Follow us

on Twitter

Most Read

10 Most Discussed

MacNN Marketplace