While shopping for your electronics and computer parts, you may encounter Newegg.com. The website seems to list electronic products selling at a competitive price. However, since you have never heard of the company, you are unsure if they are trustworthy. So, is Newegg legit?
In general, Newegg is a legitimate platform to purchase from. The company is a registered entity and has won multiple consumer awards, such as from Forbes. However, Newegg has issues keeping its third-party sellers’ behaviors in check. This means you still need to be careful while shopping to protect yourself.
This article discusses Newegg, how it works, and if it is legitimate. We also look into potential problems you may encounter when buying from it and if Newegg products are cheaper than Amazon’s.
What Is Newegg?
Newegg.com is an online store that sells things like consumer electronics and computer hardware. It is based in the City of Industry, California. Newegg was founded by Fred Chang in 2001 and has been publicly traded on NASDAQ since 2021. It made over $2.38 billion in 2021.
Newegg.com was founded in 2001 by Fred Chang, an immigrant from Taiwan. The name was given to signify a new hope, a new beginning after the internet industry’s general collapse at the beginning of the century.
It took Newegg several years to grow, reaching almost a billion dollars in sales in 2004. Newegg was honored as one of the top 10 online retailers by the Internet Retailer Magazine. The company attempted an IPO in 2009 but, due to issues, decided to withdraw from the process in 2011.
Newegg has embarked on many specialized services and programs to work with manufacturers, retailers, and customers to improve the purchase experience. Some include:
- Partnering with Indiegogo to support product founders. Newegg helps give go-to-market strategies, marketing, and fulfillment support to support growth.
- Newegg Now. Newegg now is a weekly Livestream featuring tech commentary and reviews and sharing time-sensitive offers to those that tune in.
- Newegg PC Builder. This service allows customers to configure and source individual parts to build their PC.
- JustGPU.com. This website provides insights and research into graphic cards for customers interested in diving into the details.
- Third-Party Logistics (3PL). This service allows third-party sellers to sell through Newegg.
Newegg has been embroiled in several controversies, involving accidentally selling fake CPUs, customers’ credit card information leaks, and refund issues. These controversies were, however, resolved with good faith from Newegg.
Newegg also is known as a company that fights patent trolls, an opportunistic practice where people try to enforce patent rights far over the value of the patent. The company won a case in 2013 against Soverain Software which sued Newegg over infringement of its shopping cart patent. Newegg also won against TQP software in 2015 over public-key cryptography patents.
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How Does Newegg Work?
You buy shoes from Newegg just like you would from any other common internet retailer. You visit their website, open an account, and then look through what they offer. Newegg sells mostly electronic and computer parts.
Then you add items to your cart and make your payment through checkout. If you prefer, you can also break down the payment into plans. Newegg uses Zip for this service,
Instead of billing the whole bill in one go, you get the bills charged in four installments every two weeks. Once payment is received, Newegg will process, pack and ship the products out.
Newegg ships its items worldwide from its major warehouses and distribution centers across the US. These are:
- Memphis, Tennessee
- City of Industry, California
- Atlanta, Georgia
- Ontario, California
- Edison, New Jersey
Most of the time, Newegg ships their packages air with tracked shipping. Shipping costs are added-on and are not included in the price of your purchases. This means you should be able to follow your package as it travels from Newegg’s warehouses to you.
You should get your package within a few days if everything goes well. Newegg normally uses FedEx, UPS, and OnTrac courier services right now to ship your orders to you.
Is Newegg Legit?
Newegg is a legitimate website. It is a registered entity in the United States, and its stocks trade publicly at Nasdaq. The company has a viable way to make money and has also been reporting profits. The company also has a strong customer protection policy to protect customers during purchases.
Newegg is a registered entity within the United States. It is registered as Newegg Commerce Inc. This means Newegg is an entity that operates legally, with scrutiny from regulatory bodies to ensure transparent business practices and good conduct. Newegg also likely pays taxes to the government in which it operates, generating revenue and income for local services and the economy.
Publicly Listed Company
Newegg is also publicly listed, trading in NASDAQ with the counter NEGG. This means the company is a publicly owned asset, and you can view its financial statements openly. This further legitimizes Newegg, making it more transparent.
Viable And Legitimate Revenue Source
Scams often rely on an unsustainable method of generating revenue, relying on a Ponzi-like revenue system. In a Ponzi system, companies use money from new customers to pay for older customers. These entities eventually collapse, leaving the masterminds rich and the victims out of their money.
Since Newegg is a listed company, you can easily review its financial statements. Newegg makes its money in multiple ways. In general, its revenue comes from sales of products and additional services they offer to its third-party merchants. This means Newegg is a sustainable, profitable business that should do well over time.
Good Customer Protection Policy
Newegg has implemented policies that protect their customers well, although there may be grievances from time to time. This is expected since Newegg processes so many orders in a single day, sometimes up to 40,000. However, in general, customers’ issues are well attended to, and Newegg approaches issues with good faith and tries to resolve them.
What Are the Problems With Newegg?
Newegg’s problems include poor Trustpilot reviews, keeping its third-party sellers in line, and counterfeit products. The key here is to understand that Newegg does resolve customer grievances in good faith, meaning Newegg is a responsible business that cares about its customers.
Being a large eCommerce platform, Newegg has problems from time to time. If you look at the general feedback and reviews from their customers, Newegg seems to be facing some of these issues:
Poor Trustpilot Reviews
One of the best ways to review a company’s service is to look at the review left behind by their customers in Trustpilot. A high score shows a great experience, while a lower score shows a poor experience.
When it comes to Newegg, the scores are dismally low, at 1.6 out of the maximum of five. Most complaints range from unavailable inventory, sudden cancellations, and counterfeit products.
Nevertheless, before you give up on Newegg, think about this fact. The 1,950 reviews collected may represent only a minuscule portion of the total orders Newegg has processed since its inception. In fact, Newegg processes over 40,000 orders a day, indicating that a large majority of customers may be pleased with the products and services from Newegg.
Most negative comments seem to come from Newegg’s third-party sellers. Newegg has a system where third-party sellers can leverage its platform and sell products. This allows Newegg to drastically increase the offerings on its website.
However, third-party sellers can be troublesome to Newegg, as they may not adhere to policies well. This resulted in a large number of poor customer feedback. The negative feedback includes sudden cancellations, products not fitting descriptions, and counterfeit products.
One of the customers’ biggest concerns when purchasing products is counterfeits. Unfortunately, Newegg faces this issue from time to time. Some customers reported that they purchased fake or counterfeit products. However, these comments also indicated that Newegg replaced these products with genuine ones later. Third-party sellers may be to blame for this.
Knowing these issues does not mean you do not buy from Newegg. However, the key is to be more careful and to ensure you do not get into purchases that may leave you with lemons.
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Is Newegg Cheaper Than Amazon?
Newegg may have cheaper items than Amazon, but overall, they may be the same. This is because although some items may be cheaper on Newegg, they may not have the scale of Amazon. This means Amazon may be able to offer cheaper shipping. You can apply the reverse on Amazon as well.
As a start, one thing to note is that although Newegg and Amazon are both e-Commerce companies, they operate with a different focus and at a different scale.
Newegg focuses on computer parts and electronics, while Amazon retails basically everything. Therefore, scale-wise, Amazon is much bigger than Newegg.
You can compare the annual revenue to see how vastly different they are in scale. Newegg made about $2.38 billion in revenue in 2021, while Amazon made over $469 billion in the same financial year.
Logically speaking, Amazon should be able to offer products at a much cheaper rate. Still, if you spend time digging, you may find Newegg products that are cheaper than what Amazon may offer.
However, eventually, both companies may just cancel each other out. This is because although you can purchase something at a lower price at Newegg, you may not be able to secure a better shipping rate compared to Amazon.
If you reverse the situation, Amazon may be slightly more expensive. Still, since their shipping rate is so competitive, your savings may eventually even up the price you save on Newegg. Amazon can offer a much better shipping rate since it processes many orders daily.
Therefore, it may not make too much sense to compare the two. In fact, even if you spend hours after hours comparing prices between the two, the savings may not be worth your time.