We have all heard the news: The troubled economy is
taking its toll, and no one is immune to its effects... not even Big
Electronics. As of January 17, Circuit City is liquidating its assets
and closing its doors forever. And \"Out-of-Business\" usually means
great deals for the customers. But recent articles in PC World, MSNBC
and others highlight the fact that there are no deals at Circuit City.

Despite
the fact Circuit City has advertised that it is reducing prices on all
merchandise by 10%, this price markdown is taken off of the MSRP. This
is a marketing tactic that most often results in higher prices for items than before the liquidation started.

A
comparison between everyday pricing on eBay with the liquidation at
Circuit City reveals that the eBay prices are 34% lower than the
currently discounted Circuit City liquidation prices. The comparison
was done by walking into a Circuit City, writing down model numbers and
prices, and then using a research tool to compare prices between eBay
and Circuit City.

Methodology

As of January 2009,
the Average Sales Price (ASP) of 63 unique products was determined by
looking at over 2,500 eBay transactions. These products were priced
from $25 to $3,500 (MSRP) and ranged diversely from TVs to camcorders
to printers. The ASPs of the products were then used to calculate price
difference per category and overall.

Discrepancies

The
largest discrepancies appeared in categories related to computers and
networking. Wireless routers, printers, and mice were 37%, 50%, and 53%
cheaper on eBay than at Circuit City. Home theater receivers and
digital cameras showed the smallest differences, 22% and 13% cheaper,
respectively. Camcorders and TVs ended up in the middle of the pack at
33% and 28%. There did not appear to be any trends based on high vs.
low ticket items or brand.

Although these numbers are compelling,
they don\'t tell the entire story. The data from eBay doesn\'t
necessarily include shipping fees as separate line item. When buying
online, shipping costs often can be a deterrent to purchase and also
would narrow the margin between the total costs of a transaction on
eBay vs. that of Circuit City. In this case, some could argue that
sales tax in a given state may cancel out shipping fees, so why not go
buy the item in store?

In the recent months, eBay has encouraged
users to list items with free shipping and at fixed prices. This trend
has a tendency to inflate the final price, with Sellers compensating
for \"free\" shipping with a higher \"Buy It Now\" price. Given that a
consumer\'s local sales tax was not factored into the Circuit City
costs, the discrepancy in total cost of purchase is actually larger
than the research shows, and there isn\'t the hassle of waiting for an
auction to end.

Conclusion

Don\'t believe the hype
surrounding the Circuit City liquidation quite yet. Shopping on eBay or
other online marketplaces is currently your best option. However, this
will not always be the case. Bigger price cuts will have to be made to
continue to clear inventory. As this happens, the difference between
liquidation pricing and online pricing will continue to narrow,
eventually resulting in very competitive pricing. So keep your eyes
open, and you may just find that great deal at the Circuit City
liquidation.