Why Are Vizio TV So Cheap? Full Guide
Ultra-wide TVs with incredibly thin frames, amazing picture quality, and integrated streaming services are now more affordable than ever before thanks to businesses like Vizio. Unbelievable as it may seem, a 50″ 4K HDR Smart TV is actually available for less than $500. But how is that possible? I’ll go over some of the explanations for Why Are Vizio TVs So Cheap in this article.
1. Third-world nations are where Vizio TVs are produced.
The fact that Vizio TV production is outsourced to developing nations with lower labor costs is a major factor in the low price of these televisions.
TVs from Vizio are made in Vietnam, China, and Mexico. More specifically, Vizio manufactures its products in those nations in accordance with contracts with original design manufacturers (ODM).
An ODM (original design manufacturer) is a business that builds a product in accordance with the original specifications provided by another business.
ODMs enable businesses like Vizio to launch a product without completely designing the hardware or investing in expensive production facilities.
While the company that developed the specification, like Vizio, typically retains ownership of the design, the ODM provides the manufacturing capacity.
These suppliers provide Vizio with a variety of TV parts, such as LCD and OLED panels, polarizers, circuit boards, chipsets, etc.
Vizio outsources its production, so it is not required to concentrate on it. Vizio only needs to market and sell its products.
Due to the supply chain efficiency of third-world nations, first-world electronic companies like Vizio are able to maintain low costs and high margins.
2. Vizio is presently undergoing a phase of expansion
The majority of low-cost brands, such as Vizio, TCL, and Hisense, are regarded as emerging. These so-called newcomers must initially increase their customer base in comparison to more established brands.
To “win over” customers, they must accept lower margins rather than maximizing profits. The likelihood of becoming a well-known brand decreases if they don’t do this.
Bill Baxter, chief technology officer at Vizio, asserts in a podcast interview that “this is a cutthroat business” and “it’s a 6% margin industry.”
The better course of action is to avoid selling TVs for profit. Today’s smart TV manufacturers want to sell TVs for enough money to cover their costs, then make money once the TV has been purchased.
This leads me to my following point.
3. Vizio profits after you purchase the TV.
As I’ve previously stated, companies like Vizio cannot afford to charge high prices for their televisions.
Vizio can only sell their TVs at a price that is high enough to cover their costs in order to compete with other brands. Fortunately, Vizio doesn’t have to turn a profit on every TV they sell.
Post-purchase monetization is one way.
Vizio is able to monetize its TVs through data collection, advertising, and direct-to-consumer entertainment, allowing it to sell them to consumers at or close to cost.
Vizio has the ability to gather your viewing information and sell it to outside parties. Once more, Vizio is able to generate revenue from advertisers who display advertisements on your Vizio TV.
Don’t forget about direct-to-consumer entertainment as well.
You can stream all of your favorite TV shows, movies, songs, and other content on Vizio Smart TVs. The SmartCast operating system, which makes use of Apple AirPlay and Chromecast, made all of this possible.
You can access a variety of streaming services through the platform, including Apple TV+, Disney+, Hulu, Netflix, and Prime Video. With the purchase of a Vizio TV, each one of them is included.
Vizio makes more money from these streaming apps the more TV you watch.
The majority of modern televisions, including Vizio TV, are “smart” TVs with built-in internet connections, advertisements, and streaming services. They are so inexpensive due to this.
4. Positioning the market
Vizio’s positioning in the market contributes to the low cost of its televisions as well.
Vizio targets the mid-range market, which enables them to differentiate themselves based on price rather than features, as opposed to taking on premium brands like Sony and LG.
Don’t get me wrong; Vizio still provides premium brands with features and quality at a lower price point. Their M-Series, for instance, has all the features you require for gaming.
The middle class still makes up half of the population in the United States, according to the most recent data from 2021, which was released by CNBC.
Vizio made a wise choice in its market positioning, in my opinion. They can provide consumers who don’t want to spend a fortune with affordable, high-quality TVs by concentrating on the mid-range market.
5. Vizio lacks some of the more advanced features.
Because they cut out unnecessary features and lower the quality of their accessories, Vizio is able to sell its TVs for less money. For instance, you’ll receive less potent processes and cheaper remotes.
In my life, I’ve used a few Vizio TVs. The quality of the remote control varies from more expensive brands like Samsung and Sony, which is something I’ve noticed.
The user interface’s (UI) responsiveness is also less fluid. I do occasionally experience lag when using the Vizio SmartCast interface.
The majority of these, though, would be resolved following a firmware update.
I believe Vizio is attempting to make televisions available to everyone. Even though they may not have all the bells and whistles, they offer dependable TVs at a reasonable price.
6. A lot of opposition
Companies lower the cost of their goods and services in an effort to gain market share or snatch customers away from rivals. A price war is what is happening here.
Although Vizio TVs are renowned for being inexpensive, the company faces stiff competition. Other low-cost television manufacturers include Hisense, RCA, and Insignia.
They are all rivals to Vizio televisions.
You prefer to see price wars in highly competitive industries. A competitor may be tempted to reduce prices in order to increase market share.
Because they both compete in the same market, for instance, if another company like Insignia lowers the price of its TVs, Vizio will have to do the same.