The wires are buzzing with news that CompUSA, one of the few brick-and-mortar computer retailers left, will be no more. Its assets will be sold off following the holiday rush piecemeal by an asset-management firm.
It was inevitable, and a little sad, but times change.
Back in late 1997, I decided I needed a second job. I walked into Louisville’s only Computer City store, filled out an application, and within short order was working the floor as a commissioned computer sales associate. That was back in the days when computers still cost more than $1,000 and margins were high, so a salesperson could actually make a commission and the store could actually turn a profit.
I was (to my mind) surprisingly successful in sales, and was able to make almost half my teaching salary working part-time at Computer City. (That’s a sad comment on teaching salaries, by the way.) It was hard work, but fun in many ways.
At the time, Computer City was a subsidiary of Tandy Corp., which also owned Radio Shack. It was not making Tandy all that much money. So when CompUSA, formerly known as SoftWarehouse, offered to buy the entire Computer City chain in 1999, Tandy did not put up much of a fight.
It was a bold move, and a risky one. Tandy had literally hundreds of stores nationwide, so CompUSA was taking on a huge investment in personnel and property. Buildings cost money to operate; personnel need to be paid. All of those expenses cut into a company’s profit margin.
CompUSA reduced our commissions to practically nothing, and I moved on to another retailer in April 1999 where rewards were somewhat more generous. I quit retail when I moved to South Africa for a teaching exchange and never went back. The future of computer sales clearly did not include commissioned sales people.
Since that time, computer prices have dropped far below $1,000. You can buy them at Wal-Mart or from online retailers or directly from the manufacturer’s own outlets. When I visit CompUSA or Circuit City now, there are no sales associates prowling the computer aisles, at least not in the numbers I remember from 1997-99. They cost the company too much money. Sales clerks field any questions, and I doubt their commisssions amount to much.
[That is, unless they sell the dreaded extended service contracts. Those things are real money makers for the retailers; they cost next to nothing and are pretty much all profit. Thus, sales folks are rewarded handsomely for pushing the service plans.]
Computers have become a commodity like TV sets, and for the most part are more reliable and less fussy than they were just 10 years ago. There’s really no room for a chain of stores that sell only computers and computer stuff, especially with the advent of online shopping.
CompUSA was a dinosaur that fell victim to the evolution of retailing. I’m sorry it has to leave, since I have friends who worked there, but its demise was inevitable.