A Look Inside Newegg

An anonymous reader writes "AnandTech has an interesting look inside Newegg's 180,000 square foot facility. Effectively, they followed the path of an order after it was soon placed online. AnandTech was able to get a tour of their facilities before, but this is the first time they allowed them to publish any photos."

Re:New Egg not one of my faves

[Cunk]

NewEgg doesn't offer net terms to businesses. This is probably the main reason they don't appear on most company's approved vendor lists.

NewEgg with Old York inside

[layer3switch]

Still no USPS shippment. I still haven't figured out why NewEgg isn't offerring USPS shippment as an option. Surely they say, "Free Shipping" as some kind of marketing term, but we all know that's not entirely true. In my experience with USPS, especially Priority Mail and light weight shippment below 5 lbs, it's been cheaper, reliable, and no hassle; beating out on FedEx and UPS.

Or maybe it's just me having bad experience with UPS and FedEx delivery.

Re:international

[Daxster]

Aye, they can't even ship it continental either, ie..Canada.
Fuck 'em indeed.

they dont got nuthin' on.....

[Anonymous Coward]

DigiKey.
Check out the Thief River Falls plant sometime. Whoa.

Re:New Egg not one of my faves

[Belseth]

Well ironically I just had a bad experience with Newegg. I placed an order a week ago but never got a confirmation. Some companies do not send confirmation e-mails so I didn't think anything of it. A week passed with no sign of the order. I checked their website but there was no order listed. I wound up calling them to only find they had no record of my order. I badly needed the equipment so I'm going to have to pick it up locally. I'm getting ready to build out a number of higher end systems soon but after they lost the very first order I placed I plan to go elsewhere. I'm not sure if this is so much an indictment of Newegg but internet sales in general. In the last six months over 50% of my internet orders have had problems. I've had others lost and I had a large order get duplicated. I used to love ordering on-line but now I'm hesitant to do it. I'm had multiple equipment companies put me on back order then refuse to cancel the order. Once they have your info you're at their mercy. You can save money but the risk and the hassles make it dangerous and I'm not sure I save anything in the long run. Most of the websites have issues. If you are going to depend on the internet make sure your databases work. It may have been a $400 order they lost this time but over the next month alone I had planned to spend quite a few grand with them. Loosing a week to a lost order is potentially disasterous. If I have to pay 10% more but I can pick it up same day I have to say it makes more sense in my situation. The savings are nice but it's just too much risk.

Re:New Egg not one of my faves

[dtdns]

I used to work for Wal-Mart a number of years ago. Their system is called SMART (IIRC, that is Systematic Merchandising and Applied Retail Technology). Their process is known as "perpetual inventory" and for good reason. The computers know how much inventory is in the store at any given time (like any good POS), as well as how many will fit on the shelf, how many come in a case, etc. When it sees that the "on hand" count is getting to the point where the shelf cannot be kept full from overstock, it orders more. It also knows the inventory levels at the warehouse, and how long the delivery will take, so it can make some predictions that result in stock arriving just as the shelf is no longer full. The system also takes into account sales that are coming up and adjusts the order amounts accordingly. Department manager and some floor associates have the ability to manually adjust the on-hand inventory counts, so you can trick it into sending you more of an item if you want to do a department special. It does a lot more than that, and on paper it should result in an almost fully stocked store and and pretty empty back stock room every morning after the previous night's trucks have been worked out to the floor.

In practice, however (at least at the store I worked at), the on-hand counts were always off due to managers screwing up, shrinkage, warehouse mishaps, etc. The result was that some items were almost always out of stock, and others were piled to the ceiling in the back room because the system kept ordering more when we obviously didn't need any more. To complicate matters, you have holidays and seasonal items to account for, and some departments are somewhat independant of the rest of the store (shoes and jewelry come to mind).

And that's just at the store level. I can't imagine what kind of magic lurks at the distribution centers.

Re:Newegg is awesome

[ryanov]

No, you don't -- $3 of your taxes are donated to the campaign fund. You don't pay an extra $3. Try it with Tax software and you will find that this is correct.

Alas

[Diablo1399]

If only Newegg would open up to international shipping. . .

Newegg quietly triples shipping charges

[EmagGeek]

Having frequently purchased things from Newegg.com and been relatively satisfied with being close enough to one of their warehouses to get overnight ground shipping on the cheap, I was recently horrified to discover that they have quietly changed the way they offer shipping in order to pad their own pockets. In case you haven't noticed, Newegg.com no longer offers UPS Ground as a shipping option. They have instead created a new service called "UPS 3-day Guaranteed," which, if you read the terms [newegg.com], basically says that you have to pay for UPS 3-Day Select, but will still get ground shipping if you are close enough to receive your order in 3 days or less. For people like me, that equates to a tripling of shipping charges and nothing else. Newegg.com could not be reached for comment as of the writing of this story. Am I the only one who is outraged?

Article CLEARLY a Promotion

[sweetnjguy29]

This article is clearly a promotion for newegg.com -- I mean, they even promote a freakin contest over at new egg for a Athlon 64 4600+ ! http://promotions.newegg.com/NEPro/AnandTech//inde x.html [newegg.com]

Here's how it (doesn't) work

[ScentCone]

I've worn a lot of hats over the years, including as an end user with a large university (the guy who needs stuff) and later as a guy working at a vendor who sells stuff. Here's the scoop.

As an end user, you've usually got four purchasing options:
1) Petty cash. For very tiny things. Pointless to this discussion, and still involves lots of careful receipt-handling rules.
2) School-issued credit cards. Only people way up the food chain get to use these. Purchasing agents in the school's procurement office get to use them, and sometimes people who work in travel offices, or that coordinate events, etc., do, or deans and whatnot. Generally there are very tight rules about how these can be used, and that's usually never for things like a shiny new computer monitor or the like.
3) Small, "casual" Purchase Orders. Usually these are limited to a few hundred dollars or so. The end user has to request the use of them, but then gets handed something more or less like a blank ticket that has a spending limit on it. Many vendors won't take these because they're not already assigned, by the school's procurement office, to the vendor... which means the there may be bumps in the road getting it actually paid.
4) Serious POs. These are the ones that come out of the procurement office after the purchasing agent has shopped around to make sure the end user is making a rational request, after some bids (either over the phone, or more formally on paper) have been reviewed, and so on. If you're wondering why these take so long, it's because when a state school (which is really the state government) decides to buy something, there are a jillion rules at play. Has the vendor been filing state taxes correctly? Has the vendor been keeping up with state regulations on hiring quotas, manadatory cardboard recycling, health insurance regs, etc? Yes: purchasing agents spending bigger-ticket amounts of tax money have to check ALL of that crap. And you can only imagine what happens if some of the funds involved happen in to include some federal support for the school's program(s). Suddenly the vendor has to pass all sorts of federal tests, as well. All of that has to be established before the PO is cut to the vendor. And if there's some comparison shopping to be done (this is usually required by law), the purchasing agent may have to actually advertise that the school's about to spend $50,000 on some capital item, and allow a certain amount of time to pass so that all potential vendors can respond with a proposal.

Now: suppose you're a vendor. Think of the time you've got to invest in presenting a friendly face to that process. Then, imagine that the school's policy is to review all shipments before even beginning to start the process of paying the bill to the vendor... but the purchasing agent can't certify that the shipment even GOT to the school, with the right stuff in the box, in good shape, until the end user (and/or his supervisor, dean, etc) signs off on the circulating paperwork. Never mind if the product has some OSHA issues, or HAZMAT considerations to slow all of that down. Finally, the end user's receipt paperwork gets back to the purchasing agent, who then sends the paperwork to the school's accounting people, who have to match it up with the filed invoice from the vendor, and then they schedule a payment for some number of days in the future... thus giving them time to check whether the vendor is or is not on some shit-list about some other transaction having gone well or poorly, thus holding up the payment.

You get the idea. The life cycle on these things is horrific, and vendors have to really want to do that business, and be willing to float the money, usually for months, before getting paid. If even ONE aspect of the end user's paperwork isn't just right, the vendor often does NOT get paid. Now, combine all of that with an industry like selling motherboards at very low margins... and remember that the company (like Newegg) has to honor (or even beat) their advertised

Re:Q: NewEgg == EggHead?

[Anonymous Coward]

Amazon bought egghead.

Newegg is not related.

Re:Return policy

[DarkBlackFox]

Restocking fees are a regular practice in most technology companies, and the reasoning is simple. Once a product goes out the door, there is no reasonable way to tell what happens to it. It's not known whether the customer knows how to properly care for or install a product, or if there is any damage to a product being returned. Thus, anything being returned is subject to proper testing, costing the company time, and if it's a retail package that's been opened, it can no longer be sold at full retail price (hence open-box/recertified discount items). There's no reason a company should have to incurr a loss because some customer ordered the wrong part, or didn't know how to install it, so it's only fair the customer pays his share of expense.

Internet companies like newegg are especailly vulnerable to this, as online orders are relatively anonymous, in that there's no way to verify the technical ability or knowhow of any given customer. I work for a brick and morter shop, and it's usually pretty easy to pick out the customers who know what they're doing, and those acting on advice from a friend or co-worker, with no real insight of what they need done. But online, anything flies.

Most of the time, if it's a retail/shrinkwrapped item, and it's returned without breaking any seals or plastic wrap, you can convince the company to waive the fee, because no testing or repackaging needs to be done.

Re:Return policy

[BoorayJenkins]

You misunderstood. I've been buying from them since '02, the USB cable incident was 3 weeks ago. It was mearly an example of the type of service I've received over the years, and in response to the "they charge restocking fees and return shipping".

I once thought I'd save a few dollars buying from the lowest on PriceWatch a few years ago. Bought an ABit motherboard, only to get it all running with 3 days work of config and software install, only to realize my bad overclocking board reported an idle, non-overclocked CPU temp of 175F. When I called to have them cross-ship me a replacement, I went through 3 people who couldn't speak english. Literally. The most I understood was "no cross-ship, only you return and we ship another, you pay costs.". Never again, only NewEgg.

BTW, it was 2 long USB Cables, not one.