Wednesday, October 10, 2018

Amazon, Monopoly Power, and Brick-And-Mortar Failings

Mu wife really does not like to buy from Amazon (but still does it) because she is concerned about the loss of brick-and-mortar stores.  Part of why I do not let this bother me (much) is that there is a niche for brick-and-mortar stores: service and immediate pickup, especially of cheap items.  Best Buy will be installing an AM/FM/CD Bluetooth stereo for my wife's Jeep because they have installation, and when I went into the Boise store, there was a very sharp and knowledgeable salesperson, Stacy, to help me find what I needed.  The downside is that when I needed to reschedule the installation appointment, there was no way online to do it, and no people available at any phone number.  When you call the store number, you get store hours and a warning that Apple inventory goes so quickly that online counts are usually wrong.  No button to push for meatware.

But lots of brick-and-mortar stores are falling down on the one place where they could justify higher prices: the inventory of stuff that you need today.  I needed ONE M3x0.5 thumbscrew, preferably 12mm long or more.  Industrial Hardware in Garden City almost always has whatever odd fastener I need.  Not this.  I went to Home Depot, which not being a real hardware store, also disappointed me.  Ace Hardware in Eagle, which keeps an impressive collection of fasteners, had inch-size thumbscrews, but not a single metric thumbscrew of any size.  So I ordered a bag of 20 of 
M3x0.5 20 mm long thumbscrews.  Way more than I need, but $9.81.  (Smaller bags were black or small knurled heads.)  And I doubt that I could find even one if I called every hardware store in Boise.

Brick-and-mortar stores: Keep a variety of goods in inventory, even if they take a couple years to sell.  The inventory cost on 20 metric thumbscrews is tiny, and you can charge $4-$5 for one, just to satisfy the "need it today" guys.  And stay in business.

1 comment:

  1. last winter I had a problem and went to my mechanic. I followed him to the back room and he went to a shelf and opened a dust covered box and found what I needed. He said he had not used the stuff in that box for 10 years when he was also a parts seller.

    Care to guess what the opportunity cost of that box of parts was? Even the best stores are being pushed by Amazon, Home Depot, or the other large big box stores. Seen many non-specialty toy stores lately? ToysRUs pushed many out of business and the apparently Amazon did the pushing.

    Look at the (subplot)?) of the movie "You've Got Mail." Seen any Borders lately?