The Reason Why Vizio TVs Are So Cheap

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Vizio (now owned by Walmart) sells some of the cheapest TVs on the market that you might mistake for a Chinese brand. However, Vizio is an American company, and was founded in the U.S. back in October 2002 in Fountain Valley, California. From its founding, the company's main strategy has been offering lower-priced TVs.

That's why, a couple of years later, the company was nicknamed the king of cheap TVs, and for many years, Vizio was the brand that delivered better bang for the buck than its competitors. While it no longer leads the value for money category, some of the best cheap TVs experts recommend today come from Vizio. Regardless of the price segment the company targets, its TVs are typically competitive, especially when it comes to price.

But that begs the question: Why are Vizio TVs so cheap? How does it manage to sell its TVs at such low prices in comparison to big-name brands like Samsung, LG, and Sony, even in the entry-level category? Well, that boils down to the company's manufacturing, distribution, and data collection practices.

One of the company's core strategies that helps it sell its TVs for much less is outsourcing manufacturing. According to a 2012 Fortune article, Vizio managed to be disruptive in its early days by defying the traditional way of designing and manufacturing TVs in-house. Instead, the company handles the design in California and then outsources the production to multiple manufacturers. Per Vizio's 2022 annual report, the company has partnered with various manufacturers, including BOE, Foxconn, Innolux, KIE, Tonly, TPV, and Zylux, that source components on behalf of the company and also handle production. Those manufacturers then package the products for retail and send them to Vizio's logistics hub.

"We utilize our business planning team to obtain competitive pricing on certain components, and we leverage our manufacturers' volume purchases for best pricing on common parts," the company notes in the report. Additionally, it heavily leans on a vendor-managed inventory strategy that helps "reduce costs across the supply chain and improve inventory flexibility," which, ultimately, helps Vizio keep its prices low. The report also reveals that Vizio has mainly focused on large-scale distribution channels such as big retailers, taking advantage of economies of scale, thus keeping its fixed costs low while growing revenue.

All of these strategies that optimize production and distribution help it sell its TVs for less while still managing to make a profit. Another reason why Vizio TVs are cheap is that it has built a profitable advertising business around its products, dubbed Platform+. Through Platform+, the company makes money in two ways: Selling ad space in its SmartCast OS and through "data licensing, branded buttons on remote controls, and content distribution". The 2022 report reveals the company made $477.9 million from Platform+, and revenue grew 31% in the following year.

While it sells some of the cheapest TVs you can find, the brand's products are typically good for the price. RTings says Vizio TVs usually include gaming-focused features like FreeSync, even in the budget models, and are solid picks for watching content when it's dark. The Vizio M6 series TV, for example, includes variable refresh rate, low input lag, and a dedicated gaming menu. Vizio's 2024 4K TV received praise from Wired for some of its features, such as Dolby Vision, 120 fps gaming at 1080p, and casting capabilities thanks to AirPlay 2 and Chromecast.

However, it's not all sunshine and rainbows for Vizio TVs. While they might pack excellent features for the price, there's a catch. First, the company's SmartCast OS is bloated and buggy, and it doesn't update its smart TV platform often. The interface is also filled with ads, and you can't install additional apps. As for installing apps, the company does provide a bunch of mainstream entertainment apps by default, so you might not need to install more.

Vizio TVs also lack the premium finish that you'll find on some brands. As a result, the longevity of your cheap Vizio TV could be a concern. However, those cheap TVs can last up to five years, which should give you enough time to upgrade to something better.