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Sears has another chance to avoid closing down

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Re: Sears has another chance to avoid closing down

#361

Post by lebanon_tn »

filmgirlcw wrote: post #283
acdha wrote: post #227

Earlier quoted context omitted.

There was a significant gap between Amazon launch and having two-day shipping — it took years of behind the scenes development before orders started arriving notably faster than other retails. Sears' numbers include regular postal delivery in both directions so switching to online ordering would have cut them in half with no other changes (and don't forget the efficiency wins from orders arriving as validated electro…

The pricing benefit really cannot be understated. Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), where there were similar markdowns. And of course, you could get any book you wanted from Amazon. And then Amazon very quickly moved into media like CDs and DVDs. I used to ord…

I'm not well versed on the subject but I recently learned that Amazon's share of a book's purchase price is HUGE at around 40% (21.60 on a $54 book)

I suppose the lesson is that there is a lot of value in being a distributor as I also know someone who is a part owner of a brewery and he says the same thing.

Source: http://fabiensanglard.net/gebbdoom/

Re: Sears has another chance to avoid closing down

#362

Post by JKCalhoun »

wombatpm wrote: post #5

Sears had everything. Global supply chain, check. Top notch distribution operation, check. System and infrastructure to take orders and handling billing, check. Name recognition and established customer base, check. They threw it all away, ending catalog operations in 1993 a year before Amazon.com opened in 1994. They owned part of Prodigy in 1984! Yet somehow thought it was a better move to expand into bigger box re…

Not disagreeing with you, but where is Wal-Mart, a big box store that kicked Sears ass, in your calculus?

Re: Sears has another chance to avoid closing down

#363

Post by wvenable »

reaperducer wrote: post #357
wvenable wrote: post #158

Earlier quoted context omitted.

No, this was true when Sears was viable retailer. They owned very valuable properties in malls. But the process of destroying the retail portion of the company to extract value from the real estate actually devalued the property. Sears was the anchor that made a lot of that property valuable in the first place.

Stores don't own locations in malls. The mall owners lease that space to stores.

Sears owns a huge amount of the property -- remember they've been at this for over 100 years.

Re: Sears has another chance to avoid closing down

#364

Post by greedo »

jessaustin wrote: post #276
Vivtek wrote: post #239

Earlier quoted context omitted.

They literally had the best tools in the world - my dad swore by Craftsman, told me never to bother buying any other brand. Then they threw it away on a demonstration of Randian philosophy.

Even while our dads were swearing by Craftsman, better tools existed. You're right that Craftsman was good enough for most people's needs. Craftsman is still an OK brand for hand tools (not power tools). It was just easier to get Craftsman, because they sold it at a store that wasn't too far away. Back in the day you could only get Snap-On etc. if you were affiliated with e.g. a mechanic's shop that was on a Snap-On…

Sear's return policy for Craftsman pro tools was exceptional; lifetime warranty. If it broke, bring it in to exchange for a replacement.

Re: Sears has another chance to avoid closing down

#365

Post by [deleted] »

Skunkleton wrote: post #318
billfruit wrote: post #102

Earlier quoted context omitted.

Isn't warranty provided by the manufacturer and not the retailer, and hence better to buy big ticket items online (likely cheaper since there is no local retailers markup). Even for clothes, yes offline stores do give us the ability to ability to try, but online offers more choices, colours, fabrics, sizes and brands than any one physical clothes store could possibly offer, so I do think online has an edge.

> Isn't warranty provided by the manufacturer and not the retailer The cost is usually covered by the manufacturer, but the local retailer is usually a point of service.

[deleted]

Re: Sears has another chance to avoid closing down

#366

Post by baddox »

cestith wrote: post #330
baddox wrote: post #130

Earlier quoted context omitted.

Wouldn’t an unused membership be worse (for Costco) than a used membership? Perhaps barring some rare edge cases like customers who would only buy loss leaders, or stores that are congested with shoppers.

Costco actually sells most products at or near cost. Most of their profit is in memberships. https://www.fool.com/investing/2017/05/05/how-costco-wholesa...

Interesting point, I wouldn't have guess that. Although, it sounds like they would still rather their members buy products, based on this sentence:

> If you examine the company's sales, it brought in $56.59 billion in net sales with a merchandise cost of $50.21 billion and sales expenses of $5.92 billion.

I don't think that sales expenses would vary much depending on how many members were buying products.

Re: Sears has another chance to avoid closing down

#367

Post by [deleted] »

xnyan wrote: post #200
excalibur wrote: post #89

Earlier quoted context omitted.

Pretty much in agreement here, although I do find it more convenient to buy appliances through the big box store's website than to go in person and spend an hour guiding an associate through the options in their arcane inventory system.

Also you get to avoid most of the 99% profit-for-them "warranty" hard sell. I try not to hold it against the salesperson as I've done that kind of job and I know they don't have a choice but it's still incredibly annoying.

[deleted]

Re: Sears has another chance to avoid closing down

#368

Post by eesmith »

burfog wrote: post #286
eesmith wrote: post #15

Earlier quoted context omitted.

Of course some businesses should close. That's not an interesting question. In the modern age, after Sears was destroy by vulture capitalism ( https://prospect.org/article/it-was-vulture-capitalism-kille... ), its place is in the grave. I think the interesting questions are: - Amazon is the modern mail-order company. Why didn't Sears (re)discover that niche? - Does this (finally) drive a stake through the heart of th…

Bankruptcy court can determine that transactions before the bankruptcy filing were done to evade the payment priority defined by bankruptcy law. The court can do a clawback to get those assets.

The link I gave says that the practice I described "is the norm", meaning that yes, a court can do that, while the argument is that the court should (almost) always do that.

Re: Sears has another chance to avoid closing down

#369

Post by acdha »

jlarocco wrote: post #355
filmgirlcw wrote: post #283

Earlier quoted context omitted.

The pricing benefit really cannot be understated. Amazon was 40% less than list for books -- which was a massive amount, even if you lived in Barnes & Noble markets (and B&N wasn't as pervasive in 1996/1997 as your average mall bookstore was), where there were similar markdowns. And of course, you could get any book you wanted from Amazon. And then Amazon very quickly moved into media like CDs and DVDs. I used to ord…

I don't remember that big of a price advantage, but they definitely had a HUGE selection advantage compared to the book stores in my city. To a certain extent the price didn't matter much because it was the only way to buy a lot of books.

If memory serves it usually wasn’t that dramatic but there were significant outliers where it was 50+% cheaper and I don’t think I ever saw it go significantly the other way so there was a strong inertial tendency to just buy it on Amazon rather than put time into shopping around.

One other neat thing was international availability — Amazon.co.uk had Terry Pratchett books months ahead of the US release, so I could read them at the same time when people on Usenet were.

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