tag:blogger.com,1999:blog-529575095156315075.post914802808469153128..comments2024-02-09T12:12:37.636-08:00Comments on best minimum wage job a middle aged guy ever had: A rare and pertinent thing...Duncan McGearyhttp://www.blogger.com/profile/02857388833850939721noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-529575095156315075.post-91684645114879086992011-04-12T21:11:56.294-07:002011-04-12T21:11:56.294-07:00While the big box store had a larger selection in ...While the big box store had a larger selection in their target area then did department stores or general retailers (though the term big box store has gotten a bit corrupted from its original meaning. It was originally referring to stores that were category specific such as Home Depot (compared with the hardware stores of the day), Circuit City or Best Buy compared with the local appliance store. Basically instead of a department in a department store they were a large store with a tight focus. Now the term is basically applied to any large store.<br /><br /> The key is that to be profitable you need to get a return per square foot and that means getting the inventory turns across the stores complete inventory. That requires X amount of cash to be flowing through. If the cash is not flowing through you either need to shrink the inventory and store size (along with capital investment and variable costs) or you have to adopt a slower turn model. The slower turn model does not work, unless you are willing to accept very poor returns on your overall capital investment.<br /><br /><br />Retail always changes. More then just about any other business it changes. The big box model was good for 20 years. Now the no box model is growing the fastest. <br /><br />THe business with the lowest margin, but highest inventory turns (I guess you could say the real original big box stores are chain grocery stores).RDChttps://www.blogger.com/profile/13033979029490801023noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-5410068747695760702011-04-12T14:55:16.062-07:002011-04-12T14:55:16.062-07:00What if the big boxes are the cultural artifacts.
...What if the big boxes are the cultural artifacts.<br /><br />When I first started at Pegasus, downtown was half empty and the big indoor malls, Mt. View and Bend River, reigned supreme. <br /><br />They've been torn down or changed from indoor, and downtown is going strong.<br /><br />What if the big box stores were a moment in history -- cheap goods from China, naive zoning laws, a lackadaisical labor ethic? What if they end up rotting on the edges of towns the way drive-in theaters did?<br /><br />As long as people want to sell something -- people will open up stores.<br /><br />The massive infrastructure of cheap labor and cheap goods and cheap energy -- which seems more certain in the long run?Duncan McGearyhttps://www.blogger.com/profile/02857388833850939721noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-74516808407954895952011-04-12T14:42:03.413-07:002011-04-12T14:42:03.413-07:00Yes, and part of what I'm saying is that when ...Yes, and part of what I'm saying is that when the "mass market" starts talking about smaller stores and other changes, they are talking about becoming closer to my model.<br /><br />Why did they become big boxes in the first place -- wasn't it the vast inventory they could carry under one roof?<br /><br />Wasn't the volume discounts?<br /><br />I keep saying, another word for smaller big box is "store."<br /><br />They can dress up the language all they want -- but if they get smaller then they have less inventory (filling a store with 'clutter' is something the smaller stores can and have been doing...interesting, is it not, that the big boxes want to try to copy that behavior?)Duncan McGearyhttps://www.blogger.com/profile/02857388833850939721noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-83619024543948147652011-04-12T13:02:00.773-07:002011-04-12T13:02:00.773-07:00Duncan,
You really cannot equate the lessons from...Duncan,<br /><br />You really cannot equate the lessons from you business model to a mass market store.<br /><br />Mass market is about inventory turns and product velocity. As long as they can do inventory turns (1 per month or better) they do well and are quite profitable. If their velocity slows down below that rate then they have severe problems.<br /><br />I would be surprised if you can much more then 1 turn a year with your business model.<br /><br />What works for yours would be a disaster for theirs and vice versa.RDChttps://www.blogger.com/profile/13033979029490801023noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-39684322345827989432011-04-12T12:03:58.982-07:002011-04-12T12:03:58.982-07:00What you're doing is right for your business. ...What you're doing is right for your business. It might not be right for others. Advice about business (or anything else) that takes a one-size-fits-all approach is almost always wrong.H. Bruce Millerhttps://www.blogger.com/profile/14613347512240617956noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-4687956359930808562011-04-12T09:59:41.202-07:002011-04-12T09:59:41.202-07:00Yeah, what I like about the article is that I was ...Yeah, what I like about the article is that I was being told over the last decade or so that doing what I was doing was wrong -- at the same time that my bottomline was telling me I was right.<br /><br />I have come to doubt much of the business advice I hear...Duncan McGearyhttps://www.blogger.com/profile/02857388833850939721noreply@blogger.comtag:blogger.com,1999:blog-529575095156315075.post-954199051327438842011-04-12T09:43:15.666-07:002011-04-12T09:43:15.666-07:00Dunc, I would say you have met the challenge of ac...Dunc, I would say you have met the challenge of achieving clutter.<br /><br />The cluttered look evidently works well for some kinds of merchandising, but some stores take the opposite approach, displaying each item in isolation, like a jewel. Sharper Image comes to mind as one example.H. Bruce Millerhttps://www.blogger.com/profile/14613347512240617956noreply@blogger.com