...in the US and Europe.
So much for Mitt's darling. And it just happens to be a GLOBAL entity. Ha.
http://www.ibtimes.com/staples-inc-s...ervices-795593
Staples is shutting down stores...
...in the US and Europe.
So much for Mitt's darling. And it just happens to be a GLOBAL entity. Ha.
http://www.ibtimes.com/staples-inc-s...ervices-795593
Interesting! And possibly a case of Staples shooting itself in the foot, maybe a day late and a shipping dollar short in the near future. One of the things I wonder about constantly centers around fuel and shipping costs in the future, and how that may turn the tides on the brick-and-mortar vs. online stores competition phenomenon.The move is part of a general trend in retail to go head-to-head against already established online vendors, namely Amazon.com, Inc. (NASDAQ:AMZN). Despite the competitive edge the Seattle, Wash., online retailer enjoys because it doesn't charge sales tax, Amazon faces razor-thin margins and increasing competition in cyberspace from brick-and-mortar competitors that are reducing showroom square footage while expanding their online operations.
Shipping is an highly efficient industry, with costs that have been very competitive, but also taken for granted. FedEx, UPS, USPS and others will deliver right to your doorstep for a reasonable cost. In the future, however, the cost of individual deliveries will become staggering. The only way to mitigate that cost is to consolidate it. So, rather than individuals ordering single items and paying massive costs to have it shipped and special delivered to them individually, a brick and mortar store will be able to consolidate those costs by having a lot of items shipped to them en masse. Yeah, I know, that is how it works now, right? What is not seen or anticipated, however, is that the difference only seems negligible because costs of shipping are relatively inexpensive now -- some small fraction of cost of the product itself in most cases. However, that fractional part of the order is going to get larger. Much larger. As in, more than the order itself is worth in many cases.
We already have a case where you can buy some inexpensive item on ebay for $1.00, only to be hit with $2.95 for shipping. If it's a unique enough item, you might just pay the shipping and be done with it. Both the item and the shipping are cheap enough, so $4 for a Cracker Jack novelty, big deal. But if it's something available from, say, a local brick and mortar store for that same dollar, and you don't need or want to order a lot of them, you may not order it online. You can always wait for your next trip to the store and pick it up then. In the near future, as fuel and shipping charges increase, the number of lower cost items that people are willing to order online and have shipped individually to them may decrease dramatically.
Example: I can get 5 gallon buckets and lids very cheaply online now. Sales taxes are often a factor in any online buying decision. If I am in California, I will not buy from a vender with offices in California, because I'll just get soaked on taxes (which I don't believe anyone should be charged for for online purchases in the first place). Even then, I still don't buy those buckets online, because even with competitive retail costs, and no sales taxes, the products are bulky, and the savings are eaten away by shipping and handling charges. So it's a wash in that case. So even with local sales taxes factored in, I end up spending less by buying those items from a neighborhood Home Depot.
As fuel prices increase dramatically, as they most certainly will, a lot of otherwise low cost online goods will be priced completely out of the market, with local brick and mortar firms becoming even more competitive, and only because they can still combine shipping charges en masse for all their products, and pass those savings along competitively as needed.
Hence, the trend that I predict for the future will be an interesting cost-balancing act on the parts of consumers, part of which depends on taxes involved, but much of which depends on the costs of shipping and handling, fuel included. If you're in the market for something small, lightweight, low quantity and relatively inexpensive, you will get it from a brick and mortar. Likewise anything large and bulky and heavy (even if it is expensive), because that also adds to the cost of shipping.
But if I'm going to the brick and mortar store anyway, and they happen to have the more costly items on sale as well, which also have savings due to consolidated shipping, why would I buy anything but the most unique items from the online store?
Last edited by Steven Douglas; 10-08-2012 at 02:09 AM.
I always find it kinda sad to see these various stores close down, because I know it's going to get much, much worse as the economy weakens.
Mitt hasn't run Staples for quite a few years now, so it's pretty ingenious to tie a shift in strategy that didn't happen under his leadership to his leadership. But of course the media and the liberals will.
It always amazes me that they can stay open to begin with. I've never been to a crowded office supply store.
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I blog at Red State Eclectic, I totally tweet here, I sell stuff here, and also here. Liberty rocks!
The editorializing is my own. You can bet your a$$ ol' Mitt will take credit for Staples whenever he can, though, no matter HOW long he's been out of the picture, eh?Originally Posted by angelatc
Well, I don't know that he takes credit for the business as it stands today, because I haven't paid that much attention to him, really. But why shouldn't he take credit for the success that the company achieved while he was involved with it?
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I blog at Red State Eclectic, I totally tweet here, I sell stuff here, and also here. Liberty rocks!
He should. Go, Mitt!!!
@Steven,
I have the problem you describe with electronics parts. Unless I need to buy a fairly large quantity of capacitors, transistors, resistors, chips, etc... It almost always costs more for shipping than the parts. Last month, I need 2 capacitors, 100uf 16v, but bought 10 so that I could get the cost (~1.80) close to the shipping cost just to feel better about it. I'll probably use the other 8 caps sometime in the next few years. I tried to get them at the local Radioshacks but they have reduced inventory to only the most common parts because of online sales.
Last edited by ClydeCoulter; 10-08-2012 at 06:55 AM.
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If personal shipments are affected, you can be darn sure that bulk business shipments to your physical stores are going to increase as well—which will also raise prices on that end. The increased fuel prices are going to affect everyone... not just online sales.
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Why did you capitalize global? Is being a global entity bad? It seems like a good thing.
Staples worked out pretty well for Bain Capital and they deserve to tout it as a success. I don't get the hatred for all things Romney. Hate his ideas. Don't hate the good things about him.
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