Feeds

Letsbuyit no longer illegal in Germany?

More it sells, more it loses

  • alert
  • submit to reddit

New hybrid storage solutions

Troubled buyers clube Letsbuyit.com has embraced news of the repeal of two strict German laws regarding price discounting. The two laws - the Discount Law and Free Gifts Act, according to Letsbuyit - will be eliminated from the middle of next year to help build the country's e-commerce industry.

The laws were created in the 1930s to help protect consumers and consumer choice and banned discounts of more than three per cent (with some exceptions, like very cheap giveaways). However as European markets have grown and changed, the laws have become out of date and actually damaged consumer interests.

Of course, such a law is anathema to Letsbuyit, which relies on bulk-buying discounts to function. Despite this, the company claims it is still doing great business there - 50 per cent of sales apparently. From next year though, the company will be able to offer the same kind of discounts that it does elsewhere in Europe.

An interesting side show to all this also occurred about a month ago, when a German judge decided that Letsbuyit was "excessively alluring" because it had turned a "transaction into a game". An interesting insight into the German mentality. So even though the company may soon legally be able to run its business how it wishes - will Germans trust it? Will too large a discount scare off Hans?

Not that any of this matters much though. We have always maintained that Letsbuyit's business is flawed and we stand by that. German law change or no, the company is in serious financial straits, just recently making it clear that it needed a "strategic partner" to give it £50 million to get through to 2002 - when it reckons it will become profitable.

The company also slashed its workforce by 20 per cent in September, despite increased sales. Its gross profit margins leapt and its made revenue of £4.4 million. Unfortunately, it also had operating costs of £26 million. ®

Related Stories

Letsbuyit.com too sexy for stuffed shirt
Letsbuyit wants £48m to help it into the black
Letsbuyit boosts sales and slashes staff
Letsbuyit.com ducks out of float

The next step in data security

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Protecting users from Firesheep and other Sidejacking attacks with SSL
Discussing the vulnerabilities inherent in Wi-Fi networks, and how using TLS/SSL for your entire site will assure security.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.