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Newegg Expects Better Holiday Sales Than 2011

Audio, ultrabooks, tablets among best sellers

November 19, 2012 By Jeff O'Heir
Get the Flash Player to see this rotator., the $2.7 billion e-tailer of consumer electronics and computer-related, products is usually a pretty good indicator of how holiday sales are shaping up. So far, things are looking pretty good.

"We're enthusiastic; we're tracking above last year," said Merle McIntosh, senior vice president of product management at Newegg North America, adding that Newegg wasn't too sure how holiday sales would fare, given the uncertain political environment, sudden price drops, competition, etc. "We are pleasantly surprised."

McIntosh couldn't give specifics, but he said Newegg's 2012 revenue will increase over last year in a range that the company "would find very acceptable."

Newegg can make holiday predictions so early because it begins the season sales cycle early, turning the whole month of November into Black November. The company celebrates the big sales day on what it calls Black Wednesday (the day before Thanksgiving) starting at 1 p.m., and carries t the special promotions through the weekend, past Cyber Monday and into Encore Tuesday. But why stop there. Newegg will sponsor special deals, mainly on computer-related components and peripherals, in December during its 12 Days of Techmas promotion.

The company is also continuing its Iron Egg guarantee, which is an additional 60-day extension on almost all products, and has expanded the promotion to cover hundreds of more lines than last year. All Iron Egg guaranteed products ship for free and many of them also carry a lowest-price guarantee.

Despite Newegg's strong focus on computer components and peripherals, CE sales spike during the fourth quarter. McIntosh expects especially strong Newegg sales of ultrabooks, audio speakers and headphones. McIntosh doesn't expect huge sales of soundbars on during the holidays but he does see them as a "very strong growth category" throughout the New Year. Gaming products, including physical media, prove good traffic drivers "but we don't get rich off gaming," McIntosh said. Consumers won't see too many holiday deals on DSLRs, mainly due to tough MAP policies.

Newegg did stock up on new Windows 8-based product. Initial demand for the products has been tepid, but ultrabooks have sold fairly well since October, McIntosh said. He does expect Windows 8-related sales to pick up during the first quarter and increase in the second. "I think it will really take on big volume, but not that high in the fourth quarter," he said. "The good news is (Windows 8 product) sales are growing steadily, but not growing rapidly."

McIntosh, like the rest of the CE industry, is bullish on holiday tablet sales. is not authorized to sell iPads, but it will throw its marketing muscle behind tablets from Samsung, Asus and Acer, as well as a handful of sub-$100 brands. So far there has not been much price movement from the top-tier brands, McIntosh said, although Newegg will back them up with plenty of promotions.

This year, Newegg has stocked its three warehouses in New Jersey, California and Tennessee, with about a quarter of a billion dollars in inventory for Q4 holiday sales, which typically accounts for about 30 percent of the company's annual revenue. That inventory doesn't account for what Newegg will source through its distribution partners. During this holiday season (from October through mid-January), the company has hired about 250 additional employees, primarily in its logistics and customer service centers.

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