It would more often make sense for a consumer electronics manufacturer, not a retailer, to buy a startup. The manufacturer can sell in a variety of channels, whereas the retailer can sell only in their channel (most of the time). The manufacturer has lower margins (because the retailer will take their cut), but I'm willing to bet that they more than make up for it on volume.
So it seems like a CE manufacturer will always outbid a Best Buy for a startup.
I think this is why you don't see Best Buy or other retailers buying CE startups. The only ones available to them would be the ones that CE manufacturers aren't buying and you'd have to ask yourself why they wouldn't buy them.
Comments
It would more often make sense for a consumer electronics manufacturer, not a retailer, to buy a startup. The manufacturer can sell in a variety of channels, whereas the retailer can sell only in their channel (most of the time). The manufacturer has lower margins (because the retailer will take their cut), but I'm willing to bet that they more than make up for it on volume.
So it seems like a CE manufacturer will always outbid a Best Buy for a startup.
I think this is why you don't see Best Buy or other retailers buying CE startups. The only ones available to them would be the ones that CE manufacturers aren't buying and you'd have to ask yourself why they wouldn't buy them.