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Forum Moderators: buckworks
joined:June 2, 2008
So many stores have spent their competitors out of existence without realizing they've only set themselves up for failure.
In many cases though, the money simply won't be there and won't be spent either way. Whats left will be the "value" (dollar wise) bottom feeders ;)
I don't think it is going to as bad for ecommerce as it will be for B&M. I think as gasoline prices continue to spike, people are going to be spending more time trying to buy what they need online rather than driving to buy it.
Amazon and Blue Nile have done very well. But note that Red Envelope has gone out of business. Only one or two of the 20 stocks are down since January.
The good performance of my portfolio doesn't mean web sales are strong. Mostly it means the market was really rough on all retail stocks in January.
The way i see it these huge top 500 e-commerce sites get away with providing less and simply try and sell more. Cut costs till the costs cant be cut and hope the debt markets are cheap enough to allow you to sustain a 90 day cash flow that keeps you in the black with payroll.
joined:Oct 25, 2005
But note that Red Envelope has gone out of business
Perhaps, but their stock is at 0.01, that means if you invested in a million shares you would still have $10,000.
There's obviously no way to prove it, but we believe strongly that our growth rate is lower because of the economic uncertainty than it would be if we were in boom times.
Customers get more savvy and shop for absolute lowest deal. If you can compete in that niche and sustain growth more power to you.
People don't necessarily "go to the internet" just because gas prices are high. With expensive gas comes expensive utilities, expensive maintenance, expensive food, increased cost of living. So while i pay more for a tank of gas the less obvious stuff is now my average grocery bill is 4-500.00 month to eat healthy for a family of 4, utilities are jacking rates, house maintenance is getting more and more because prices of materials a HD and Lowes are increasing so on and so forth.
We sell items that revolve around a do-at-home type of hobby, so I was starting to think that maybe the gas thing would actually help sales. After investing in materials for the upswing in sales that appeared to be happening, we now in the last few weeks plummeted in sales. So not real happy right now.
Us too. Typical early Summer doldrums right now though so not too worried. High gas cost is a plus for ecommerce overall I think, a selling point - at least until shipping costs get hit. Right now I can ship a customer nearly any product that we sell for less than what it would cost them to drive somewhere and buy it. Fear of a collapsing dollar is something else altogether. Too soon to say for us. The average American has no net worth, so a tanking economy could collapse non-essential product markets.
We really push the limits on the Flat Rate Envelopes as well. I don't know if there is a maximum thickness on them technically, but we certainly abuse the system. Have sent thousands and not a single problem, so if there is a thickness standard it is not enforced. If it fits in an FRE it only costs $4.75 to west coast instead of the $9.30 that it would cost on larger items. Pack a 96L box, stuff it an FRE, one strip of Priority tape across the top and off it goes.
I can't believe that it's technically legit, but never a question. Ditto for internationals. Pack the order in a 96L, stuff it in an FRE, and shipping is next to free.
Still, we were forced to raise the postage rates, by a mere 95 cents, and are now the same as everybody else in our niche. We do a June special; our competitors came back a week ago with double off that of our special. We're getting killed. All in the last week.
This "supermarket mentality," as I think of it, may hurt them in the long run, as you suggest, or it may just force us all in this niche to take slimmer profit margins. I just hope it doesn't force us out of business.