The Alleys of Akihabara
by Shannon Jacobs
A gravelly voice says, "This is the city. Akihabara, Tokyo. I work here.... I wear a uniform and a badge. It was Sunday, September 21st. I was working the International Section on the 4th floor...." (With most sincere apologies to Joe Friday and the LAPD.)
Well, actually my voice isn't so gravelly, but the rest of it is just the facts, ma'am. The badge says Sofmap, where I've been working since August. Kind of an accident, but actually a rather pleasant change from the Gold-Rush-mentality of the Internet-focused companies where I've been working for the last few years (and where I may well have bumped into you, if'n the name sounds familiar). There was at least one ad that I stumbled across somewhere... I'd pretty seriously thought about trying my hand at sales a couple of times in the past, and here was my big chance...
I bet what you really want to know is the deep down lowdown on what Akihabara is and how it works, and how to save money, too.
But I bet what you really want to know is the deep down lowdown on what Akihabara is and how it works, and how to save money, too. Well, this little article is an interim report on what little I've learned in my first couple of months on the inside. Also time for the little disclaimer-this article definitely contains an opinion or two, and though I'm trying to give you the straightest scoop I can, I sure haven't found the reference manual yet.
First, a word about the range of merchandise, and "poor" is the word. Surprised? So was I, but in most parts of Akihabara's Electric Town there are only two models-newer and newest. Yes, there are places in Akihabara where you can find some of the older stuff, but that's NOT why it's Akihabara. It's a bit hard to describe the dynamic that's at work here, but Akihabara is really the Mecca of the Early Adopters. Though Akihabara does sell a disproportionate share, it isn't the mass market of the average computers. The makers are channeling a big chunk of their newest offerings though Akihabara because that's the fastest way for them to figure out what's hot and what's not.
There are many older computers and unsorted things available in Akihabara, but most of them are just trying to benefit from the atmosphere. The crowd is there, and they are hungry to buy, and you can sell almost anything in an atmosphere like that, and someone is sure to try. All manner of strange and scarce electronic items can find a niche somewhere in Akihabara, but the spotlights are on the stars-the newer and newest.
So how does Akihabara sustain it's reputation for good prices? I confess that I don't really know. I'm a pretty agressive shopper, and I'm good at distinguishing between what I want and what I need, and in my many years in Tokyo I rarely bought anything large in Akihabara. I confess that I normally found what I needed elsewhere for less money, but even I checked the Electric Town prices. The reputation pretty clearly has to do with those early adopters I already mentioned-they want those new models and the makers are eager to test the waters, and the result is that in Akihabara those newer and newest models are priced unusually close to the older, more proven models that you'll see at your neighborhood appliance store. And of course reputation also has to do with what people are saying, and I've noticed that "early adopters" seem to be an especially chatty bunch. Another one of the things I've noticed as a salesman is that one friend's recommendation is normally stronger than 10 specs. Chatter matters.
How are the prices set? That's a funny one. I can understand part of it-the spying. At the end of each month our store is regularly visited by fellows with blank spreadsheets. On the left side is a list of model numbers, and across the top are the names of stores, and they go up and down the aisles filling in as many of the blanks as they can. Easy to tell them from real customers who are just being careful shoppers-real customers don't know the model numbers yet, and their spreadsheets usually include some space for key specs. I think one of the reason so many prices are not clearly posted in Akihabara is to inconvenience the spies, though of course the good spies have their little ways of finding out. The other spies just ask.
Anyway, all this spying leads to the second price, the spy convention price. The first price was the manufacturer's suggested list price, of course, but that was just some kind of fantasy that marketing suggested before the engineer started on the first design. Spy prices are pretty widely known and usually clearly posted. I think Sofmap tries unusually hard to be a price leader, but I'd need to do some spying of my own to be sure. I think the best way to find the real price leaders in Akihabara would be to do a census on the spies-the store with the most visits by spies is probably the cheapest one.
Though I'm not really at liberty to say, I was pretty shocked to learn how low the spy prices are relative to cost.
Though I'm not really at liberty to say, I was pretty shocked to learn how low the spy prices are relative to cost. Margins on large hardware are quite low in Akihabara. Unfortunately, most of this seems to be offset by the premiums that have to be paid for the newest components. For example, in a few months when the machine moves to "mainstream" status, the same CPU will almost surely be significantly less expensive. Excuse me while I wave my rubber chicken in the direction of Intel. (The margin on software is probably twice as high, but there's a nasty spoilage problem there...) If you want more sordid details, you'll probably need to catch me when I've been drinking to excess-pretty rare these days.
Now we get to the third price, the "Ask a staff member" price. In Sofmap, they usually don't even bother with that explanation, but just draw a line through the posted (spy) price. There seem to be several reasons for these prices. I used to wonder if it was just to give the customers a reason to strike up a conversation with a salesman... These third-level prices often seem to reflect special promotional deals with the makers. At Sofmap sometimes they are linked to special small lots, often of slightly older machines and the kind of stuff that other big stores route to their outlet stores. Sometimes these prices are also linked to high-volume merchandise, but in those cases the third-level price will pretty quickly become a posted second-level (spy) price.
Price number four? Probably the "set prices," where extra stuff is added in to make a special set with a special price. However, apart from printer sets, those sets are most often attempts to offset basic problems with the maker's configuration. While they are sometimes quite attractive, they are fundamentally remedial, so you need to be careful there-maybe there are other problems, too.
Is that all? I'm afraid not. Maybe Sofmap has an unusually complicated pricing structure, but there are still a couple more wrinkles in there before we even get to the fluctuating inventory problems and latest special promotions... My personal goal is simple-help the customer get the best computer and software for their real needs for the lowest price. But much easier said than done.
If'n you want to ask other questions or maybe even offer suggestions for what I should write next time, the best way to reach me is via email:
firstname.lastname@example.org is my main one.
Or you might even catch me at Sofmap. Chicago, 4th floor, Wednesdays and weekends for now.
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