Why is the Nexus 5 (16gb) $500 at Koodo, and only $350 at the Google Play Store?

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Koodo: https://shop.koodomobile.com/koodo-ce...

Google Play: https://play.google.com/store/devices...

There's a pretty large price difference ($150) between Koodo and the Google Play Store for the same product, the Nexus 5 16gb. What's even crazier is that you can get the 32gb version for $399 on Google Play, which is still less than Koodo's $500 and has more space

Can anyone shed some light on this?.
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PrefFate

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Posted 2 years ago

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Bob Smith

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Google doesn't really aim to make much of a profit on the nexus phones, so sell it for dirt cheap because they want people to use android and google services, etc.

Carriers need to make money on phones and want you to go on contract, so make the off contract prices expensive. Though I'll admit $150 markup is expensive and more than the n4's markup was.
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Zaphod Beeblebrox

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There are no subsidies through Google for the phone. If you think about how the tab system works, You can get the N5 for $350 after the Tab Small is applied. Tab Medium, you can get it for $200 and Tab Large you get it with no upfront cost.
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Dennis, Mobile Master

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It's the market retail price in Canada unfortunately. Robelus also have it similarly priced

http://www.rogers.com/web/link/wirele...

http://www.bell.ca/Mobility/Products/...

http://www.telus.com/wireless/devices...
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Timo Tuokkola, Mobile Master

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Why is it a problem? If it's cheaper from google, buy it from google.
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Marcel in O-Town

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Koodo: $500 + Tax (on any amount not put on tab), instant gratification, great customer service (and 14 day return policy at store)

Google $ 350 +tax + $17 shipping, wait 3-4 weeks, who knows what their return policy is like (not saying it is bad, but at least with Koodo it is set in stone)

You need to figure out what the savings vs time are worth to you.
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Humberto Giambrone

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Anybody who is so impatient that they can't wait a few weeks for a phone (if they truly are not in need of one urgently) in order to save $150 needs to be smacked in the head very hard and probably doesn't have very good priorities.
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David, Mobile Master

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[...] needs to be smacked in the head very hard [...]

I'll admit I lol'ed far too much reading this, lol
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samsvoc

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Maybe they have more $ than ยข.
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Maxximus Minimus

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spend $150 for "instant gratification"? come on? seriously? The greater issue is that once again the Canadian consumer is getting screwed and especially by ALL the Canadian cell providers who are all in collusion regarding price.
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Timo Tuokkola, Mobile Master

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How exactly is the Canadian consumer being screwed when they have the option to purchase it directly from google for far less? If they choose to buy it from a more expensive source that's their decision.
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Ivan, Mobile Master

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The average Canadian consumer seems to have no idea that you can buy the phone directly from Google for $134 less (vs. outright from a carrier) or $166 more (vs. Tab M) but the phone is yours without a contract.
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Jonathan I, Mobile Master

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That's because Canadians are used to being marketed "free" or "cheap" phones and the idea of getting contracts or "a plan" instead of actually buying phones. The problem with this model is we don't understand the value of them until a girl drops her iPhone in the toilet or a guy drops his Galaxy S4 on the concrete and the screen gets smashed.

Then, their carrier doesn't want to cut them a deal on a new phone because it's not their problem - how dare they not help me with something they had nothing to do with - they freak out and write nasty things about them on the internet or use it as a topic of conversation with their friends.
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Chrome1234

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Google's return policy is just as good, if not better, than Koodo's.
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Ivan, Mobile Master

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I disagree. Even if they are more forgiving in regards to what can be returned, as long as I need to ship it out, it's not better for me.
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quasarito

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Google pretty much sells the N5 at cost.

The carriers can not compete with that because they also have additional carrying costs with selling the phone (warranty, support, inventory, etc...).
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Charles Gauthier

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No they don't. Google has all the same costs, plus the production risk, and warranty risk on phones sold to the carriers.
In fact you know that if Google is selling the phones for $350 / $399 then the carriers are paying less because they are buying in bulk. This is just a cash grab for when people are forced to buy unsubsidized. The Carriers are trying to take advantage of customers in need of a quick replacement, and they are trying to make the promotional price look good.
Who wants to sign a 2 year contract when you only get $250 off. But it looks better if you are getting "$400 off"
Remember that built into the plan price is $20 a month for hardware cost.
So a 2 year contract costs you $480. Unless you are getting at least a $500 discount you are being ripped off. (as usual from Canadian telcos)
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John Lee

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Nevertheless, just buy the device from Google.
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David, Mobile Master

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And the BYOD discount makes it a lil bit more appealing too!
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Mark Kokolsky

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While I don't know the exact numbers, I can pretty much guarantee that google is selling the Nexus 5 either at or below cost. But they are just trying to drive their marketshare and the new OS. They make their money in other ways.

Whereas carriers need to cover a lot of costs which usually mean higher prices. As Marcel said, your paying more with Koodo but you get award winning customer service, great rate plans, and you get your phone right then and there.
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Humberto Giambrone

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Despite what some people think, they aren't selling it below cost, they just aren't selling it for the kind of markup that carriers charge, especially since carriers need to give people a reason to sign contracts or use a tab system, so they artificially jack up the retail price to make their discounted price seem like a deal.

As mentioned above, buy it from Play, apply the BYOD and you are much better off.
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Mark Kokolsky

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The LG rep I talked to would probably disagree.
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Humberto Giambrone

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The newest iPhone costs less than $250 for the most expensive model. Of course there are other costs that must be factored, marketing is a big one. The Nexus 5 has no real significant marketing, and I very much doubt it costs more to manufacture than the Aluminum iPhone (the 5c costs significantly less since it has a plastic casing, this would be more in line with the Nexus 5).

I'd be shocked if the Nexus 5 cost anywhere near $250 to produce. Now, that doesn't mean LG will sell it to Google for that price, but they sell it at a price below what Google charges. Google's margin on the phone is thin, no doubt, but they don't sell at a loss. Carriers get charged more for the phone than Google does, so there is justification to their pricing it higher, but I think $150 higher is a bit unreasonable, although I get their pricing strategy completely.
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Ivan, Mobile Master

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I have no idea where this "selling at a loss" belief came from. The only reason cell phones are so expensive is because of carrier subsidies. If people stop getting their phones subsidized, prices will be driven down. Most people don't actually go out and buy a $700 phone. They pay $200 and get locked in to a contract.
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samsvoc

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Big +1
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Maxximus Minimus

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IFIXIT rips apart all sorts of devices and prices the components out and its is very, very clear that the manufacturers of cell phones are not losing money on their prices, including the Nexus 5
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Jordan Hopfner

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Hey Mark, don't forget to cradle the balls. This is the carriers ripping consumers off like they always have.
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Zaphod Beeblebrox

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Wow...that was a fantastic reason to keep this thread alive....
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Jordan Hopfner

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Thanks, I liked it.
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Jorden, Mobile Master

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It was the same with the Nexus 4 (carriers were higher than Google) so it wasn't much of a stretch to assume the same thing would happen here. IMO there's very little reason to get the Nexus from a carrier unless you can't afford to pay the outright price up front anyway.

What really gets me is when people go to the carriers to just buy the phone outright...
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Dennis, Mobile Master

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If you can't afford a phone outright then you can't afford to own a cellphone with a monthly plan in my mind
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Jonathan I, Mobile Master

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Not true. It's about cash flow.

Think about financing a car. I didn't have $22,000 to drop on a Dodge Dart but I walked in while they were offering no money down, and I walked out with a brand new car. Now I have bi-weekly payments to pay for this car. I can afford them. I can't afford it all in one shot. A lot of people have the same mentality with their phones because we've had it engrained into us for years now. Although it is slightly different than subsidizing a phone because you have to pay for your own gas and insurance from a different source, the "payment plan", so to speak, behaves in a similar manner.
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Nomikos Zografakis

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That car analogy is not accurate. If you finance a car, you pay full sticker price + interest if applicable. If you were to pay cash the price of the car can be negotiated down by at least 10-20%. The same goes with a phone. If you buy an unlocked phone, you have freedom to move from carrier to carrier and enjoy the best possible prices.
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mattjs

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Moving from carrier to carrier to source the best possible price does nothing in this country though. Their is parity across the networks. Look at the Big 3, all their prices and plans are essentially identical. Then, look at their respective discount brands (Virgin, Koodo, Fido), same thing. If one has a promotion, then the others follow. If one implements a BYOD discount, so do the others.
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Ivan, Mobile Master

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Not being locked in does grant you the freedom to leave without additional cost. Sometimes you'll get a better deal once you're canceling your line.
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mattjs

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I agree, but that's typically a Rogers/Bell/Telus/Fido retentions thing. I haven't heard of Koodo ever offering any significant reoccurring monthly discounts or retention plans to customers who want to leave for another provider...
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Ivan, Mobile Master

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Still, it does give consumers more leverage, even if it isn't across the board.
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Jonathan I, Mobile Master

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Well Nomikos, that may be true, but it's still *similar* to financing a car in the sense that there are monthly payments to pay for the phone vs. buying it outright.
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Maxximus Minimus

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why is it a problem someone has the audacity to ask? Because you don't expect to get robbed from your cell provider if they truly appreciate your business. Actually all carriers are ripping off the consumer as they are all charging $500 for the 16gig version. I highly suggest people order from the Google store and save money. current wait times are 3 weeks - a small price to pay if you are in a position to wait but well worth sending a message to Koodo and the other Canadian retailers that ripping off the Canadian consumer is simply not acceptable.
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Timo Tuokkola, Mobile Master

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You realize that Koodo doesn't actually care whether you buy the phone from them or whether you buy it from google directly? Their main concern is whether you use it on their network.
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David, Mobile Master

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I don't entirely agree Timo. If Koodo really didn't care whether or not people got phones through them, they'd stop selling phones and become a SIM-only carrier. There has to be something in it for Koodo (profit margin maybe?) to make them continue to sell phones.

I agree they can sell it at any price they want though. Consumers then only need to make an educated choice on where they get it from.
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Timo Tuokkola, Mobile Master

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Koodo carries phones for the same reason walmart sells food and superstore sells lawn furniture: because a lot of people prefer to do all their shopping in one place.
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Maxximus Minimus

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Koodo and their shareholders care. every single dollar of profit means a greater dividend return for shareholders. Don't kid yourself they don't care.
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Timo Tuokkola, Mobile Master

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Profits made on cellphone sales are minimal at best and non-existent at worst. Cellphone companies heavily subsidize phone purchases. They also have to worry about carying costs, warranty administration costs, etc., none of which they have to worry about if you bring over a phone from someone else. By all means buy the phone directly from google, but if you think that koodo will be upset about you doing so you are sorely mistaken.
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David, Mobile Master

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Timo, realistically, if Koodo carries the Nexus5 with the single goal of accomodating one-stop shoppers, why would they voluntarily make themselves look bad by selling it at a $150 premium? We know other carriers do the same, but I don't believe every carrier only sells phones to accomodate customers now, do they?

If such is the case, then by all means let us all root for a complete overhaul of the wireless landscape in Canada with all SIM-only carriers (note that I'd actually welcome such a move!)

I get your points Timo, I really do. But we all know the current N5 price from the carriers is dictated by:

"Let's wait and see how much the dudes in red and the dudes in blue sell it for"
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Timo Tuokkola, Mobile Master

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When all customers cease buying phones from carriers, carriers will no longer carry phones. Feel free to start the revolution by buying your phone elsewhere. Make it sweeter for yourself by pretending that you're harming the provider by doing so. It won't be true, but, you know, whatever helps you sleep at night.
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David, Mobile Master

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My own personal motives won't change a thing, we both know that Timo. Also, I wasn't attacking you or anything, so I'm sorry if I came as if I was (I guessed that's how I came through by the attitude I'm receiving).

My point was that carriers can't be selling phones out of the kindness of their hearts only, their shareholders wouldn't allow it as it's a well-known fact how much publicly traded companies like their profits. If a company does something, anything, there is financial motivation behind it. In some cases too, prices are inflated so subsidies appear more generous, we've all seen it.

For the same reason I buy my TV set and get digital TV services at different places, it would be awesome if the wireless world worked the same. But it doesn't. Such are things.

It never was a question of sleeping well or not at night Timo. It's only about finding out the real motive behind the price of "x" object/service. It happens with everything in life, wireless is no exception, so of course people will question such things.

Now that we've agreed to disagree, enjoy your evening Timo :P hehe
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Dennis, Mobile Master

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As a shareholder of Telus and Bell, I hope they are making good money off these phones. However I will be buying my N5 from Google.

FYI, Bell pays a decent dividend compared to Telus and Rogers
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Timo Tuokkola, Mobile Master

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Yes, customers will likely stay with a company longer if it costs them money to cancel (tab). But the tab means that they MUST stay longer for koodo to recoup their expenses, whereas if the phone is purchased elsewhere and brought to koodo there is no initial outlay and they begin to profit immediately. My post was directed primarily at those who continue to shout that they are punishing koodo for charging more for the phone by buying it from google. It makes no difference to koodo where you buy the phone. As long as you use it on their service they will profit.
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Ivan, Mobile Master

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I never got the impression that anyone was buying the N5 directly from Koodo as a punitive measure against Koodo.
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Myke

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Carriers make their money off the monthly services, not selling the phones. It's why carriers up mark and then offer contracts for a reduced price on the retail purchase.
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Charles Gauthier

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now they are trying to double dip.
inflate the prices, make a big profit on the phone, then incorporate a big charge into the plan to cover the cost of the big markup, on top of the worlds highest cell rates.
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Myke

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Welcome to capitalism.
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Ivan, Mobile Master

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Maxximus, it's not a problem to ask. Don't let anyone make you think otherwise. :)
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Philippe Nault

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I've read all the comments, and I still don't get it...

I was under the impression that carriers didn't make extra money on the phone, since they need people to have phones in order to use their services. So they offer contracts to make the phone affordable, and guarantee themselves an income from usage instead. It is fair to assume that 10 to 20% of your monthly plan is to cover for your tab/contract. It also explain how they can offer 10% off your monthly plan if you bring your own phone.

So for them to mark up the price, have it reduced with the tab, back to retail price that Google advertises, shows that they are making a profit on the phone. Since in that scenario, you end up paying the 350$ for the phone, you pay your tab monthly for at least 2 years, and you don't get the 10% off.

With the biggest tab, you get the phone for free, but you pay 10$ a month, plus 15% for 2 years or until you pay off the 500$. If you have a bill for 50$ a month, you should end up paying the phone at around 420$ when you reached the 2 years. at 60$ a month, 456$. The mark up is less obvious, but still present.

The only way for this to make sens, is if Google or Koodo sells the phone at a higher price, in a way charging for early access, since Google, Koodo, and everyone knew Google store would get back order quickly. Koodo then sells the phone at the higher price, providing you with instant access to the phone.

Am I missing something?
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Myke

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It's not meant to make sense to the average consumer. Any company that is in the market of selling products will ALWAYS mark up the cost of the item for profit.
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Ivan, Mobile Master

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Last year, most carriers released the N4 at ~$500, despite launching much later than through Google Play. Koodo's price was a lot lower at that time, but remember, this was launched much later than the N5. I expect Koodo's price to be reduced within a few months.

In any case, I'm not upset considering I can buy the N5 straight from Google.
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Rocky Balboa

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Like any shopper for any product. You don't like the pricing at 1 place and you find it cheaper elsewhere you can purchase it elsewhere. What the previous posts are about is no different the going to an electronic shop and reaming them out for having a different price then where you seen it elsewhere. All I gotta say is in conclusion don't like the price buy it from google. Don't agree with the $500 retail price then unfortinately that's the nature of the beast and facts are facts.
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Michael Smith

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I just received mine from the play store and went to a Koodo store to get a new micro sim card. I also asked for the monthly 10% off which they gave me outright, The thing is that when you apply for the 10% off, your balance is frozen... which is totally understandable.

The only downside from ordering from Google Play is the expensive shipping fees. I suggest that you buy all your accessories within the same purchase in order to save shipping fees... ie it costs almost 15$ to ship the Nexus 5 bumper case !
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Ahmad, Mobile Master

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It would be pretty ridiculous (but awesome! :P) if you got the 10% discount on your plan and still somehow collected a 10% tab. For cases, if you're looking for a cheaper option then eBay is the way to go. Huge selection, cheap prices.
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Ariel

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did anybody who bought the nexus 5 from the playstore have to pay import charges when it shipped to Canada?
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Ariel

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did anybody who bought the nexus 5 from the playstore have to pay import charges when it shipped to Canada?
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drphillips

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No import charges
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Ariel

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thanks :) mine is supposed to be delivered this week so excited.
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Ariel

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So I just got my nexus 5 delivered today from the play store. Im a little bit confused as it didn't come with a sim card and the one I have currently is way too big. Anyone know what to do?
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samsvoc

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You'll need to buy a micro Sim card from Koodo, $10.
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Ariel

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Thanks
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John Lee

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Unless you are going to be on Prepaid service, then it'll be $20.
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behnam karimi

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hi ..
why canada is no longer on google play for buying nexus 5?
im trying to buy one bout the only country is there is usa ...
anyone know why ?

plz help me ..
:-((((((
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quasarito

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The Nexus 5 is available on Google Play. I just checked.
The 16GB version will take 2-3 weeks to ship.
The 32GB version will ship in 1-2 days.
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behnam karimi

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its funny why canada is not listed when i want to buy ... there is just usa .. !!!!
whats happening to my ip ???
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Ivan, Mobile Master

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If you're running any kind of service to give you access to US streaming sites (Netflix, Hulu, Pandora, etc.), you need to disable it in order to make the purchase.
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Behzad Karimi

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how much in 32gb nexus 5 with black bumper case with tax in canada right now ?
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Dennis, Mobile Master

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Koodo does not sell the 32GB version. They have the 16GB version for $400

Google Play sells the 32 GB version for $399.

Tax will be dependant on which province you are in
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Nawoa

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If you buy from Google you'll pay tax and shipping, it raises the price much closer to Koodo's. If you buy from Koodo you'll have the benefit of much easier returns in the event you get a defective one. As someone who's dealt with Google's "support team" on a few occasions, that's worth the markup.

Google charges $399 for the 32GB. With taxes and shipping the price comes up to something like $460 or $470, so you're paying $30 for the benefit of an instant return if yours doesn't work and having it immediately instead of waiting a week for it to arrive.

I don't know if Koodo has the 16 or the 32, I'm assuming the 32... if it's just the 16 then yeah it's a pretty terrible deal compared to buying straight from Google.
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samsvoc

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16GB only
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Jordan Hopfner

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Koodo has the 16 GB for $500, same with Telus. I just ordered the N5 from Google and it comes out to around $440 with shipping for the 32 GB model. I ended up getting twice the storage and the Nexus wireless charger still cheaper than going through Koodo/Telus for just the 16 GB model. Ripoff? Yup.
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Jonathan I, Mobile Master

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If someone's okay with the 16GB model and can't afford $350 + shipping and taxes then Koodo's Medium Tab is a good option.
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Ivan, Mobile Master

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I don't know. I can't justify it on the medium tab either. But this is why I shop around. If I wanted some sort of a subsidy, I'd get the Moto G on Tab S, unlock it for $5, sell it for $150 and use the $145 toward the N5. Or I'd just be happy with the Moto G if the money way tight. Nobody really "needs" a better phone. We just happen to want it.
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Timo Tuokkola, Mobile Master

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Koodo has never once pretended that it is better to buy the phone from them. This entire thread is full of pointless complaining by people who do not understand basic economics. A free market means you are free to purchase the phone from anywhere you choose. If people only buy the phone from the seller with the lowest price, other sources will start reducing their prices to compete. If people insist on buying the phone at a higher price they really don't have a leg to stand on when complaining about the cost, since it is the price they have chosen to pay. Whether you win a race by 5 seconds or 5 minutes you still win the race.
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Jordan Hopfner

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The fact is that some people don't know any better, that the phone is being marked up so much to make it look like you're getting a much better deal by signing a contract. It's the old bait and switch, and some consumers don't know they're getting bent over backwards. But thank you for that pointless explanation.
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Myke

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If it was pointless, why did you bother to reply? Clearly there was some merit in Timo's response to warrant you taking the time to put in a reply.
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Timo Tuokkola, Mobile Master

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Bait-and-switch is a form of fraud used in retail sales but also employed in other contexts. First, customers are "baited" by merchants' advertising products or services at a low price, but when customers visit the store, they discover that the advertised goods are not available, or the customers are pressured by sales people to consider similar, but higher priced items ("switching").
In this instance, koodo is advertising the nexus 5 at price 'x', and selling the nexus 5 at price 'x'. Please explain how the term 'bait and switch' applies.
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David, Mobile Master

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"The fact is that some people don't know any better [...]"

And THIS is the problem! Any individual with common sense will research before committing to a purchase. Those who can't be bothered always pay more: cars, housing, services, you-name-it. You buy at a price you deem reasonable or you don't. I could ask $1K for N5's if I sold them and if I wanted to. And if some dude comes in and buys one, who's at fault? Think about it... There is nothing wrong with Koodo's N5 pricing, nor is there anything wrong to ordering from the Play Store. Koodo has the choice to price it how they see fit, and we have the choice to buy it from some other place. When everyone has a choice, there's no problem.

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