| You're considering buying a Vizio TV, perhaps a 42 or | | | | 4. They outsource all their labor, design and "other |
| a 32 inch, because they cost a lot less than other | | | | matters" (AmTRAN Tchnology Co., LTD, Hon Hai |
| brands you know. But are they any good? You've | | | | Precision Industry Co., LTD, TPV Technology LTD; the |
| read some reviews, a lot of people are delighted with | | | | first two are in Taiwan, the third is in Hong Kong). |
| their Vizio 32 or whatever size they have. (I keep | | | | 5. They sell through Costco and Sam's Club and, lately, |
| bringing up the 32 and 42 inch sizes because they | | | | Target. Costco and Sam's club want 10% to sell Vizio's |
| seem to be the most popular.) Still, how can Vizio | | | | TVs; electronic stores want 25% to sell TVs. There's |
| make good TVs and sell them at such low prices? | | | | 15% right there. This is probably the part that |
| I understand, you don't want to end up with a dud. I | | | | contributes the most to their low price. |
| wouldn't either. So here's a bit about Vizio, the | | | | 6. They keep their fixed expenses low. This one |
| company. | | | | overlaps points 3 and 4 above but you have to add |
| It was founded in 2002 by a guy named William Wang | | | | that they have fewer employees. According to Mr. |
| (born in Taiwan, moved to Hawaii, graduated University | | | | Wang "the legacy" TV makers have 10 times more |
| of Southern California). The company is based in Irvine, | | | | employees than Vizio has. |
| California. So it's an American company. Don't spend | | | | Now you know that the main reason they're so |
| time on this thought: like everyone else these days | | | | inexpensive is the sale set-up Vizio has. You also |
| they outsource the making of the TVs. | | | | know what the founder of the company thinks are the |
| In an interview with Nikkei Electronics Asia (February 1, | | | | other reasons. |
| 2010) and one with Forbes (12/24/09), he explained | | | | If it costs you 15% less than the competition to sell a |
| how Vizio can afford to sell TVs for so little not using | | | | TV, you can, indeed, sell it for less without using cheap |
| cheap parts. He had 3 points (but his points could be | | | | parts, shoddy labor. If, in addition, you outsource |
| further broken up). Here are his points, broken up by | | | | everything to places that do it for less and there you |
| me: | | | | pick companies that have lower overheads because |
| 1. They don't have "any legacy" (you'd be more familiar | | | | of how they are structured, you can lower the price a |
| with legacy costs in relation to Ford and the other | | | | few more percentage points. |
| American car makers) outsource all labor. In other | | | | The founder, by the way, acknowledges that some of |
| words, they've got a very low overhead (compared to | | | | his competitors have the advantage when it comes to |
| other TV makers). | | | | patents (by which I take him to mean they are better |
| 2. Their execution is better (faster). | | | | technologically), but he's working on that too. |
| 3. Their business model is superior ("21st century | | | | To conclude, you can buy your Vizio 32 TV with |
| business model" he called it). They concentrate on one | | | | confidence. Some TV makers make better TVs but |
| thing, have no redundancies, and work with companies | | | | you are not buying a dud when you're buying a Vizio. |
| that have the same business model. | | | | |