Racing to the Bottom: NewEgg

[Spalls Hurgenson]

This story is only tangentially related to gaming - NewEgg is a online
retailer that sells computer hardware - but it's the sort of news
story I always find so intriguing: watching a once-reputable company
destroy itself online.

Decades ago, NewEgg used to be the new hotness when buying stuff for
your computer. It had competitive prices, a great selection of
products, a no-nonsense web-site, good customer service, and a hip
attitude. In a world where brick-n-mortar computer hardware retailers
were becoming ever more rare and Amazon was increasingly dominating
the market, NewEgg was a breath of fresh air and one of the better
places to shop for new gear.

Of course, it wasn't to last.

As the years passed, NewEgg increasingly found itself in messes of its
own making as it pissed away its good reputation. Most famously, it
started selling counterfeit Intel CPUs; some years later it was
reported that it wasn't collecting sales tax (and, rather than own up
to its own mistake, provided the IRS with its customer information so
the government could track down the people it failed to charge and
make them pay for its error). Its servers got hacked and credit card
information was stolen. News about the company was rarely good.

But worse than all that, NewEgg failed in its basic duties as a
retailer: its prices went up, its customer service was becoming
ruinously poor, and there were increasing reports of customers
receiving incorrect or broken items, or not receiving them at all. It
was still a marginally competitive storefront if all you cared about
was cost, but buying from them seemed increasingly risky. Some people
blamed this on their 2009 IPO, others on its 2016 acquisition by
Chinese company Liason Interactive. Personally, I think it's just that
NewEgg grew faster and larger than its bureaucracy could incorporate,
and without a proper framework small problems ballooned out of
control.

Still, for a lot of people the risk of buying at NewEgg was
counterbalanced by their prices, or that they weren't Amazon or any of
its no-name fly-by-night 'partners'; that was enough to sustain the
company. At least until last week when GamersNexus reported* on some
sketchy behavior by the company. The short of it is that they returned
an unopened motherboard they had ordered from NewEgg; the retailer
refused to refund GamersNexus' money, claiming they had damaged it,
and further investigation revealed that the motherboard had been
reported damaged to NewEgg by the OEM several months prior to having
been sold to GamersNexus. In other words, NewEgg had knowingly sold
broken merchandise and then, when called on it, refused to own up to
their fault.

This news broke a torrent of similar stories about NewEgg malfeasance
- including failure to honor their promise to pay into a charity
fund** - from other YouTubers and customers alike. NewEgg's responses
have been mealy-mouthed at best, and transparently dubious at worst.

As I said, NewEgg's been on a decline for years and I really can't say
if they've recently become worse than they were in, say, 2018 or 2012.
I'm sure a lot of these stories we're hearing about now date back
years and it is only the sudden influx that is making the company look
a lot worse than it really is. Nonetheless, these problems - payment
issues, customer service issues, product issues - have all existed for
years and NewEgg has done little to fix or improve itself over that
time. It is a reckoning is long deserved.

NewEgg is right now in extreme spin-mode, trying to get ahead of this
little disaster before it escalates out of control (it may be too late
for that though; they may just have to ride it out). It doesn't help
them that many of their communications on the issues seem to be coming
from customer service personnel rather than their marketing division,
so their promises seem weak and unfocused. I'm not sure, though, that
there is really anything they /can/ say that will make this outpouring
of anger go away. For a lot of people, NewEgg was already a somewhat
shady enterprise; these new revelations are just the straw that broke
the camel's back. They've lost the trust of their customers; the only
way to earn it back is not through words but deeds.

Personally, I have largely avoided NewEgg for a number of years. I
have never had a bad experience with the retailer (although neither
can I say I've really had a /good/ experience; it always seemed they
did the minimum expected by taking my money and sending me the product
I ordered) but I've heard enough stories that it has made me wary of
buying from them anymore. I have, over the past few years, often
/considered/ making a purchase from them - they do sometimes still
have competitive prices - but I've always backed off after thinking it
through. Now, I think even that temptation is gone. I don't seem to be
the only one feeling this way.

(I'll say this much for the company though: the store pages for their
products are usually incredibly detailed and accurate, to the point I
often visit them just to find out more about a product I know I'll buy
somewhere else (or if I just want to know the specs of older hardware
I already own). It would be a shame if the company folds for that
reason alone.)

Anyway, I love hearing about how companies flounder in the face of
honest customer outrage, especially when so deserved. I'd be happier
if NewEgg actually learned its lesson, turned itself around and became
the retailer we loved all those years ago, but seeing as that is
incredibly unlikely, I'll just have to make due with the entertainment
value of their extremely poor reactions to this self-made calamity.




-----------------------
* https://www.youtube.com/watch?v=2fnXsmXzphI
** https://www.youtube.com/watch?v=-c_rKnK-uAM

[JAB]

On 15/02/2022 22:14, Spalls Hurgenson wrote:

> Still, for a lot of people the risk of buying at NewEgg was
> counterbalanced by their prices, or that they weren't Amazon or any of
> its no-name fly-by-night 'partners'; that was enough to sustain the
> company. At least until last week when GamersNexus reported* on some
> sketchy behavior by the company. The short of it is that they returned
> an unopened motherboard they had ordered from NewEgg; the retailer
> refused to refund GamersNexus' money, claiming they had damaged it,
> and further investigation revealed that the motherboard had been
> reported damaged to NewEgg by the OEM several months prior to having
> been sold to GamersNexus. In other words, NewEgg had knowingly sold
> broken merchandise and then, when called on it, refused to own up to
> their fault.
>
> This news broke a torrent of similar stories about NewEgg malfeasance
> - including failure to honor their promise to pay into a charity
> fund** - from other YouTubers and customers alike. NewEgg's responses
> have been mealy-mouthed at best, and transparently dubious at worst.
>

I've heard of NewEgg but never used them and I'm not sure that they are
that big in the UK. That type of behaviour though, that's pretty much an
instant no buy from me. Customer service for me is an important aspect
of who gets my money and I'm willing to pay more if I know things will
be hassle free if something goes wrong.

Even if I'm charitable and assume they made a genuine mistake I would
still expect them to exchange the motherboard pretty much with no
questions asked.

[Mike S.]

On Tue, 15 Feb 2022 17:14:59 -0500, Spalls Hurgenson
<spallsh...@gmail.com> wrote:

>This story is only tangentially related to gaming - NewEgg is a online
>retailer that sells computer hardware - but it's the sort of news
>story I always find so intriguing: watching a once-reputable company
>destroy itself online.

Even for someone like me, who does not build their own computers,
NewEgg was incredibly useful for buying computer parts back in the
day. However, I have not been to their website in at least a decade.
In truth, I have not really even given them a second thought for many
years. I'd sooner go to Amazon or even MicroCenter before going to
NewEgg now.

[Dimensional Traveler]

I vaguely remember NewEgg existing but the nearest one to me is/was a
good hour's drive in heavy traffic away from me, so never considered
using them. There's a small computer shop near me that have built my
computers for I can't remember how long. I go there on there few
occasions I need to buy components, mainly external HDs.

--
I've done good in this world. Now I'm tired and just want to be a cranky
dirty old man.

[Spalls Hurgenson]

I was always wary of NewEgg, but not for any rational reason. See,
back in the day there used to be a software retailer called "Egghead
Software", and I had a lot of bad experiences with them. In 2001, they
went bankrupt and the company dissolved. Later that same year, a new
company called "NewEgg" appeared.

To be clear, "NewEgg" and "Egghead Software" have nothing to do with
each other; "NewEgg" was founded by completely different people.
Still, the coincidence always made me look askance at them despite
this knowledge. It was more of an emotional than intellectual
rejection; it didn't stop me from buying from them, but there was
always this residual distaste because of the similarity of names.

But it turns out that maybe my initial instincts about the company
were right.

Anyway, I look forward to reading the next act in this drama; I always
get a kick out of companies thinking their customers are idiots and it
blowing up in their faces. ;-)

[Werner P.]

I acutally found this story quite funny, they seem to have gotten what
they deserve. Too bad that this happened with one of the biggest youtube
PC portals in existence instead of an average joe customer.
Whether this was by order from upper management or someone screwed up
according to the comments, this seems not to be a single accident.

We had similar vendors but not the size of Newegg in the 90s more like
small mail order shops with small frontends, who wanted to sell as much
as possible but did not care about customer service at all and to the
worse pulled a "Newegg" on returns. Needless to say none of those
survived longer than a few years. The last were brought out of business
by Amazons excelling customer service, only one survied who has decent
customer service and sometimes good prices and local pickup locations.

Going down this route usually is a clear route to business extinction it
just takes the big ones a few years longer then a small shop but the end
result is the same.

[Mike S.]

On Wed, 16 Feb 2022 11:05:02 -0500, Spalls Hurgenson
<spallsh...@gmail.com> wrote:

>I was always wary of NewEgg, but not for any rational reason. See,
>back in the day there used to be a software retailer called "Egghead
>Software",

I remember Egghead software. They only had one store near my family
when I was a kid. I only ever bought one game there and I think it was
Hero's Quest.

[Ant]

We lost a lot of stores like Fry's Electronics. Not many good ones now.
Also, I still prefer local physical stores. :(

--
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Note: A fixed width font (Courier, Monospace, etc.) is required to see this signature correctly.
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/ /\ /\ \ Please nuke ANT if replying by e-mail.
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[Ant]

I could easily walk to one in my former nest area. I used to go there a
lot for my Apple //c and PCs. I still have Fire Hawk (Thexder 2) game
that my parents somehow kept from those days. Ha! I remember buying
Stacker (software only), Windows 3.1 upgrade, Kraft KC3 joystick, Wings
of Fury, original Command & Conquer (my friends fell in love with that
game in college), Championship Lode Runner, edutainments (blame my
parents :P), etc. Also, playing on their demo computers!

I miss all these local stores. Oh, Computer City, CompUSA, Fry's
Electronics, etc. :(

[PW]

I remember when they had retail stores here in the US. "Egg" I think
it was. I think it was the same company.

I used to buy all my PC parts and peripherils from them and spend the
extra couple dollars for a "rush" order.

Now they are advertising vacuums and junk like that.

-pw

[Mike S.]

On Wed, 16 Feb 2022 20:51:16 -0600, a...@zimage.comANT (Ant) wrote:

>I miss all these local stores. Oh, Computer City, CompUSA, Fry's
>Electronics, etc. :(

I had both a Computer City and a CompUSA near me. I never had a Fry's
near me. I think MicroCenter is the equivalent though. Computer City
and CompUSA are long gone but MicroCenter is still here.

My gaming store of choice back in the day was EB Games, which was
called Electronics Boutique back then. I was in that store so much I
got to know the manager by name. He liked the same kind of games I did
so we would talk about the latest games. I remember him giving me tips
once to help get me get through Ultima 7.

I also remember him being very enthusiastic about games in general,
which, me just being a young teen at the time, I thought was really
cool that this old guy enjoyed the hobby as much as I did.

[Anssi Saari]

Spalls Hurgenson <spallsh...@gmail.com> writes:

> This story is only tangentially related to gaming - NewEgg is a online
> retailer that sells computer hardware - but it's the sort of news
> story I always find so intriguing: watching a once-reputable company
> destroy itself online.

I had no idea. I've known of NewEgg for a long time but, obviously,
being in Europe it'd be pointless to buy from them and pay for expensive
shipping and taxes and duties. Still, they often come up in a DDG search
for some part or another and I've actually used their part selector on
occasion. Although these days I usually use German Geizhals for that,
they go rather above and beyond with their detail level.

[Ant]

Mike S. <Mik...@nowhere.com> wrote:
> On Wed, 16 Feb 2022 20:51:16 -0600, a...@zimage.comANT (Ant) wrote:

> >I miss all these local stores. Oh, Computer City, CompUSA, Fry's
> >Electronics, etc. :(

> I had both a Computer City and a CompUSA near me. I never had a Fry's
> near me. I think MicroCenter is the equivalent though. Computer City
> and CompUSA are long gone but MicroCenter is still here.

> My gaming store of choice back in the day was EB Games, which was
> called Electronics Boutique back then. I was in that store so much I
> got to know the manager by name. He liked the same kind of games I did
> so we would talk about the latest games. I remember him giving me tips
> once to help get me get through Ultima 7.

Oh yes, EB and Software, Etc.

> I also remember him being very enthusiastic about games in general,
> which, me just being a young teen at the time, I thought was really
> cool that this old guy enjoyed the hobby as much as I did.

Hehe. Was he old like us now? ;)
--
Rams' celebration wasn't even in LA Coliseum on slammy humpy day. Early summer is gone, and winter came back with hails, lightnings, etc. yesterday. Dang old bodies. :(

[Mike S.]

On Thu, 17 Feb 2022 14:40:21 -0600, a...@zimage.comANT (Ant) wrote:

>Hehe. Was he old like us now? ;)

Heh. :)

Yes. Time flies.

[JAB]

I may have been a bit late to the PC party but I can't really remember
many stores which had actual PC components or even half decent PC's. We
did have a chain (can't remember the name) which was an electronic
hobbyist store but that went bust about five years ago.

Actually buying components/peripherals, for individual items I just use
Amazon (and feel dirty every time I do) but when it's system upgrade
time I shop around. I'm not sure what the law (well in the case it's
technically a code of conduct that banks sign-up to) is where you are
but in the UK you can have more confidence in going with a company you
don't really know as if things go horribly wrong it's fairly simple to
just make what's called a chargeback. The bank gives you your money back
and then it's up to them to deal with the matter.

[Werner P.]

Am 18.02.22 um 12:25 schrieb JAB:

> I may have been a bit late to the PC party but I can't really remember
> many stores which had actual PC components or even half decent PC's. We
> did have a chain (can't remember the name) which was an electronic

Central Europe may have been different in this regard, we always had
small to medium sized stores here selling pc parts over the counter,
still have. Although the last store now is more like a chain with a main
mail order business and local pickup counters.
The rest has gone mail order only.

[Werner P.]

Am 17.02.22 um 21:13 schrieb Anssi Saari:

> Although these days I usually use German Geizhals for that,
> they go rather above and beyond with their detail level.

I second that geizhals as an absolutely excellent source for materials
and price comparison.

[Ross Ridge]

Mike S. <Mik...@nowhere.com> wrote:
> I also remember him being very enthusiastic about games in general,
> which, me just being a young teen at the time, I thought was really
> cool that this old guy enjoyed the hobby as much as I did.

Ant <a...@zimage.comANT> wrote:
> Hehe. Was he old like us now? ;)

A teenager who played Ultima 7 when it first came out would have to be
at least 43 years old today, which is a fair bit older than any game
store manager I've seen.

--
l/ // Ross Ridge -- The Great HTMU
[oo][oo] rri...@csclub.uwaterloo.ca
-()-/()/ http://www.csclub.uwaterloo.ca:11068/
db //

[Ant]

Ross Ridge <rri...@csclub.uwaterloo.ca> wrote:
> Mike S. <Mik...@nowhere.com> wrote:
> > I also remember him being very enthusiastic about games in general,
> > which, me just being a young teen at the time, I thought was really
> > cool that this old guy enjoyed the hobby as much as I did.

> Ant <a...@zimage.comANT> wrote:
> > Hehe. Was he old like us now? ;)

> A teenager who played Ultima 7 when it first came out would have to be
> at least 43 years old today, which is a fair bit older than any game
> store manager I've seen.

Hmm, like me!
--
Slammy Friday & Caturday during daytimes! Too much sleep, sickness, poops, pees, pains, spams, issues, videos, etc. :(

[JAB]

It's possible that part of it is because of my own biases. So because I
was already used to buying things online it meant I didn't go looking
for looking for stores and by this point they really weren't something
you'd expect to see on the high street so it's not likely that I was
just going to come across them.

Nowadays the only time I'm going to look around for a local shop is if I
need something there and then as otherwise it's just a click away and
will arrive in a few days tops.

[Mike S.]

On Sun, 20 Feb 2022 02:38:48 -0000 (UTC), rri...@csclub.uwaterloo.ca
(Ross Ridge) wrote:

>A teenager who played Ultima 7 when it first came out would have to be
>at least 43 years old today, which is a fair bit older than any game
>store manager I've seen.

That is close to my actual age and my memory of the guy is of someone
who was in his mid 40s at least. Probably older. His name was Val. And
he was completely bald. That is all I remember about him.

[JAB]

The video appear on my YT stream so I though I'd give it a watch. Having
seen a few more of the details about what happened I find it really hard
to now be charitable and put it down to incompetence and not malice. It
just looks like that was a deliberate policy so for me the question
would be was that company wide or not.

As an aside, who spends that much on a MB, that's about the same as my
last system upgrade cost!

[Werner P.]

Am 24.02.22 um 10:10 schrieb JAB:

>
> As an aside, who spends that much on a MB, that's about the same as my
> last system upgrade cost!

Those huge techsites like Gaming Nexus and Linus Techtips are basically
family owned businesses with a handful of employees in the background
doing a ton of extra work, they run basically their own small tv studio.
So yes they can easily spend that cash on a mobo, heck if you have seen
some of the server builds Linus for instance has done in the past, they
spend often way more on things.

[JAB]

Sorry, should have made that a bit clearer. It was more about people in
general. I can see why there's a market for more expensive MB's but I'd
question for how many people they'd be a practical difference between
say a £200 MB (not that I'd pay that much for one) and a £500 one.

It reminds me slightly of when I used to be into HiFi and you just had
to wonder why people bought some of the more expensive items. Like alot
of products once you get past a certain point there's a rapid fall off
of what paying more money actually gives you IMO.

[Werner P.]

Am 25.02.22 um 10:06 schrieb JAB:

>>
>
> Sorry, should have made that a bit clearer. It was more about people in
> general. I can see why there's a market for more expensive MB's but I'd
> question for how many people they'd be a practical difference between
> say a £200 MB (not that I'd pay that much for one) and a £500 one.

the 500 ones are basically for companies, or people with too much money.
Never paid that much for a mobo, I try always to stay in the mid region,
given that the low end sector for my taste has too many problematic
parts (been there once never again in the last years)

[Anssi Saari]

JAB <no...@co.uk> writes:

> Sorry, should have made that a bit clearer. It was more about people
> in general. I can see why there's a market for more expensive MB's but
> I'd question for how many people they'd be a practical difference
> between say a £200 MB (not that I'd pay that much for one) and a £500
> one.

I have to agree. I actually have little idea what you get if you plunk
down 500 pounds (or even euros or dollars) for a motherboard? Enough RGB
leds for a small forest of Christmas trees? 17.6 SATA connectors? Space
for five GPUs? I really have no idea. For my desktop upgrade, I wanted
a couple of things the most basic models don't have but that still kept
the price tag below 200 (euros, here).

I do remember one motherboard, I think Socket A from Asus, using a SiS
chipset. As I recall, SiS managed to stuff both northbridge and
southbridge on a single chip and hence a cheap chipset and motherboard,
something like 35 euros. Would be nice if motherboards had actually
become cheaper than that...

[Werner P.]

Am 25.02.22 um 15:37 schrieb Anssi Saari:

> I have to agree. I actually have little idea what you get if you plunk
> down 500 pounds (or even euros or dollars) for a motherboard? Enough RGB
> leds for a small forest of Christmas trees? 17.6 SATA connectors? Space
> for five GPUs? I really have no idea. For my desktop upgrade, I wanted
> a couple of things the most basic models don't have but that still kept
> the price tag below 200 (euros, here).

Depends some motherboards in this category are just rip offs, others
might get you better VRMS integrated WIFI more SATA connections more USB
connections and/or all of that above.
But many in that area are just from the I have gaming on top so I charge
200 more category.

[JAB]

As someone who makes model kits you do see the same. So take a regular
product that can be used for modelling, slap a brand name of it and hike
up the price as it's now for modelling.

[Werner P.]

Am 25.02.22 um 20:26 schrieb JAB:

>
> As someone who makes model kits you do see the same. So take a regular
> product that can be used for modelling, slap a brand name of it and hike
> up the price as it's now for modelling.

well fashion started this in the 80s, didn´t it...

[Dimensional Traveler]

Those Romans always were innovators.

--
I've done good in this world. Now I'm tired and just want to be a cranky
dirty old man.

[JAB]

On 26/02/2022 15:57, Dimensional Traveler wrote:
> On 2/25/2022 10:46 PM, Werner P. wrote:
>> Am 25.02.22 um 20:26 schrieb JAB:
>>>
>>> As someone who makes model kits you do see the same. So take a
>>> regular product that can be used for modelling, slap a brand name of
>>> it and hike up the price as it's now for modelling.
>> well fashion started this in the 80s, didn´t it...
>>
> Those Romans always were innovators.
>

It took me a bit but I finally got the joke!