I’m curious you’re continuing to make this point. I feel other posters did a good job explaining why absence of stock (even if it’s purchased /paid for) can have negative effect on the short-term and long-term health of a small retailer.
That wasn’t my point. I even said, twice, that my numbers were from lazy googling. Do you need me to re-post my point, or can I trust you will re-read what I wrote.
Again, if they thought they could do it and didn’t, I will less critical. But, if they (rubbermaid) thought/knew they couldn’t do it, and tried to do it anyway, then they and all others like that are fools, which is what my point was entirely.
So that’s a “no” then? Seriously, which is more logical: going to a store and not finding your one item, thinking “Sold out? Screw you guys. I’m never going to here again, I’m going to Wal-Mart because they have everything,” or “Why should I even stop at this store, when I have all this other shopping to do, I’m sure I can find my item at Wal-Mart along with everything else”? [or what JohnT said.]
I don’t think you understand their business model, and the final sentence of your quote here is way off-base. Let’s say Wal*Mart decided to move into a town where you have a bookstore. Your store is doing just fine, with reasonable prices and knowledgeable staff to help people with their book questions and special orders. There’s not much growth potential, though, because it’s a small town.
Wal*Mart moves in, and sets up a book section containing only the most popular current books, which they price at (or very close to) cost. They are the only supplier in town for games and electronics, so they price those higher to make up for the lost profit in books.
People buy all of the high-volume popular books at WalMart because they’re so cheap, and they come into your store for the special orders and hard-to-find stuff. You lose half your sales, your store goes under, and WalMart raises the price of books since there’s no longer any competition in town.
Wal*Mart can accomplish this because they can subsidize their new stores with revenues from the existing ones, and because they can price some items below cost for the specific purpose of killing local businesses.
How does that make your bookstore “deserve to be out of business”?
My daughter went into Wal*Mart to get a filter for her fish tank. She counted eight-four dead fish in the aquariums there. She complained to the manager, and checked back the next day. Only half of the tanks had had the dead fish cleaned out.
Me? Nothing. I won’t shop there. What are other people buying that might require assistance? A lot. Here are typical questions that I’d expect a retailer to be able to answer. Tell me if your typical Wal*Mart employee could answer them.
“My son wants a video game. Does that one with the sticky ball you roll around have a sequel?”
“What’s the latest book in the Discworld series?”
“Will this MP3 player work with my Macintosh?”
“Which of the car adapters will work for my Motorola cell phone?”
“Can I use this battery charger for my ATV?”
“Which is the second Matrix movie: Revolutions or Reloaded?”
K-Tel never controlled 30% of the marketplace. Businesses like WalMart and Blockbuster now control a large enough share of the market that they can tell artists what to do. And saying artists don’t have to do what they’re told is disingenous - you just claimed it was impossible for WalMart to make a decision that would reduce their income by 2%. How can an entertainment company justify losing 30%?
The bottom line is that capitalism doesn’t work when any player - producer, seller, or customer - becomes too big. You can be in favor of big companies like WalMart or you can be in favor of the free market - but if you claim you support both, you don’t understand the subject.
No, it’s entirely true. Artists don’t have to do anything that Wal-mart says; they can create gangsta rap if they want to or hard-core porn or whatever they like. They merely need to realize that the price of doing so is that Wal-mart won’t carry them.
I won’t bother to repeat the old joke, because I suspect you already know it, but the punch line is “We already know that - right now, we’re just dickering.” You can do anything you want, as long as you are ready to pay the price. If Wal-mart requires you to bowlderize your lyrics or lose the chance to sell thru Wal-mart, and you say Yes, then the price of your artistic integrity has just been set and communicated. The free market, which is nothing more than information about relative supply and demand, has worked exactly as advertised.
No, things like economy of scale and even cartels and other forms of monopoly are covered by capitalist economic theory. But I hardly think some spoiled singer’s pique at not being able to say “shit” enough to suit her and still sell in a family market hardly counts as a refutation of capitalism.
Regards,
Shodan
I don’t know. I wouldn’t ask those kinds of questions at any store. But I guess you do and have found out WalMart employee’s can’t answer them? Wow, they must lose a lot of business to other stores whose employees’ know that stuff. So many lost sales….
Wait, which store was the one you were worried about going out of business?
Again, I think we have different definitons of what the free amrket is. I think it includes producers and consumers each being able to make their own decision about what to produce or consume. And as you point out, any producer has to make a choice of what consumers he will aim his product for. Now if I’m a gangsta rapper and I decide to make a song called “I hate white people” then I am doing so with the realization that some customers will decide not to buy my album. Suppose I think that I’ll lose 50% of my sales by recording this song; I now have to decide how much my artistic integrity is worth to me. As you said, this is the free market.
But what we’re talking about is something different. It’s not my customers saying they won’t buy my album; it’s a single store selling they won’t sell it. And by saying that, they’ve eliminated 30% of my sales. And as you yourself wrote, a 30% disadvantage is far more than enough to decide who succeeds and who fails in business. This isn’t the free market; this is one entity deciding what people can buy and sell.
If WalMart makes a deal with Goodyear tires to carry their tires instead of Goodrichs, then the free market is no longer determining whether people buy Goodyear or Goodrich tires - WalMart made the decision and millions of customers have no effective choice except to buy the brand that WalMart selects for them. It doesn’t matter if Goodrich builds better tires or cheaper tires or more stylish tires - WalMart controls the market. As I have said before, if you think this is a free market, you don’t understand the term.
Cite on the stat that WMT sells 30% of all Music and video in the US? Considering they only make up less than 9% of total US retail sales and that less than 7% of all WMT store space is devoted to electronics in general… I don’t really see it.
So… Cite?
[quote]
If WalMart makes a deal with Goodyear tires to carry their tires instead of Goodrichs, then the free market is no longer determining whether people buy Goodyear or Goodrich tires - WalMart made the decision and millions of customers have no effective choice except to buy the brand that WalMart selects for them. It doesn’t matter if Goodrich builds better tires or cheaper tires or more stylish tires - WalMart controls the market. As I have said before, if you think this is a free market, you don’t understand the term.[/quote
BWAHAHAHAHAHAHA!!!
God, you’re argument boils down to “But people are stupid!!!”
Jesus, you ever thought they they might go to the Goodyear down the street? :rolleyes:
Except that there are still areas, as pointed out in the OP, that don’t have any choice except Wal-mart. So this then is not their stupidity; it’s their only choice (within reason).
I can agree to this definition. Prices (in a free market) reflect the aggregate of all those decisions - the point at which supply and demand meet.
There is no functional difference between Wal-mart and Death Row Records. Both are deciding whether or not to buy a product in order to resell it to consumers in a mass market. If Snoop Draggy Drawers wants to issue an album called “Yo, Turn Ya Hat Around and Stop Being Such An Assmunch About Tha Polices” or Pat Boone calls his latest song “I Want to Felch A Golden Retriever”, both need to consider if their record company will accept this for sale.
Wal-mart is making the same decision. Will such-and-such an album sell to their target market - a family-oriented mass market for Wal-mart, or people with golden teeth and other regrettable fashion choices for Death Row Records.
This is just nonsense. 30% is hardly a monopoly. What’s to stop Stephanie Sweetcakes from selling her latest ditty "I (Shit) Love (Shit) You, (Shit) Honeycakes (shitshitshit)" to whoever thinks they can make a buck reselling it? It is still a free market until Wal-mart or someone else tries to stop her from doing business with someone else.
Oh come on - how does Wal-mart stop me from buying my tires from the local auto shop, the way I already do?
No, the term remains what it always was - Wal-mart is free to decide what they will sell and what they won’t, and at what price, and everyone else is free to decide if they want to buy at that price or look elsewhere.
Wal-mart has a large market share, because they have an efficient business model and things like economy of scale. But they better keep reacting to the market, or they will go under. And they cannot force me to shop there, or stop me from going somewhere else.
Regards,
Shodan
First off, I am unfamiliar with any law that this type of action is violating. Although, it seems highly suspicious to me, legally. Secondly, from what I’ve read from the Time article, they do close stores, particularly the ones that are not profitable, just like any other business. Third, why are they even gunning for me? Simply because I exist or because I’m the only game in town.
But, that last point doesn’t really matter. From what I’ve seen, unless I have some magical economies of scale, my bookstore would fold without even so much as Wal-Mart specifically gunning for me, not much less batting an eyelid. Also, don’t they have national pricing? Even if it is true (setting different prices for different areas), their ability to do so far outweighs my ability to compete. Therefore, I should fold. If I can still eek out a living with my small-time bookstore, I will continue to operate it. If not Wal-Mart, any big chain, like Borders, Walden, Books-a-Million, or Barnes and Noble will come by and put me out of business. If my area is so remote (or poor or both) that those large chain specialty shops won’t move in, it’s because it’s not worth it (to them). Wal-Mart runs their business so that they can do business in these areas. The fact that they can do better business than my small time shop is because of economies of scale, better resources, and a better overall business plan. It’s better for the overall community because Wal-Mart can provide many more things that I can’t. Isn’t it more efficient to do all of your shopping at one place? IOW, why should I keep my bookstore when others can do it more efficiently than me? If I can’t adapt, I should fold. If I can adapt and there is no market for my new bookstore, than I should move to a better market, expand my market (hello internet), or fold. Oh, and any cite for their business plan that involves manipulation of prices, even though they have prices set on their internet page?
Like I’ve said, Shodan, there’s no point in my discussing this issue with some one who doesn’t understand the subject. And I think you’ve demonstrated you don’t.
A specific cite that they sell 30% of the music in this country? I can’t; I’m just using a figure that somebody else mentioned here.
But the point I’m making applies to every product, not just music. This article says that WalMart sells 15% of Proctor & Gamble products, 35% of the dog food, and 24% of the toothpaste in the United States. (Incidentally, it also says that WalMart’s biggest product line is music and video.) And this site says that WalMart sells 24% of the groceries in the country and has a 60% share of the Discount Department and General Merchandise market. This site says that at its present rate of growth, WalMart will control 35% of food sales and 25% of drug sales in the US by 2007. And in this article , a market analyst says, “The company is already an industry leader in apparel with 12 percent market share. But it generally aims for 30 percent share in any category it focuses on.”
So can I specifically cite a 30% figure for music and video? No. But I can cite other figures of 30% and above. And point out that WalMart music and video sales are higher than any of these other products. So my estimate would be that WalMart’s share of the music and video market is significantly higher than 30%.
Let’s put it in terms you guys are more comfortable with. Let’s pick on the government.
Imagine you’re the CEO of Timex Watches. And you make a number of sizable donations to some Congressmen. So they pass a law putting a special 25% sales tax on every brand of watch except Timex.
Now you haven’t done anything to prohibit people from buying Saikos or Rolexes. Anyone can still buy those watches, they just have to pay 25% extra above the sales price. So theoretically, the amount of Timexes sold will not change. But in the real world, does anyone believe that Timex will not find it’s selling more watches?
Now imagine that the Timex CEO makes his deal with WalMart instead of Congress. WalMart, which controls 25% of the watch sales in this country (figure made up for rhetorical purposes) decides it will only sell Timexes. Again, in theory, the amount of Timexes sold will not change. But in the real world again, Timex will sell more watches.
So if you’re the CEO of Timex and you’re looking to expand your company, you could go the Adam Smith route and invent better watches or develop more efficient production methods. Or you could hook up a sweet deal with Washington or Bentonville. And if you picked Washington or Bentonville as your answer, you’ve bypassed the free market.
Your Timex example is not particularly analogous to anything Wal-mart can do, unless you can show how they are able to force prices higher for their competitors as the government is able to do.
And you are confusing “understand” with “agree”. You offered a definition of the free market, with which I agreed. But that doesn’t mean that Wal-mart isn’t operating in a free market.
Regards,
Shodan
Costco says…
'nuff said.
At our store, we saw the Rubbermaid saleperson for about five seconds, then he would take the boss out to lunch. Then the next day, we would get an order of Rubbermaid, enough to fill two cargo containers in blue only, or in green only, depending on what color the Rubbermaid warehouse couldn’t normally unload. Then there would be a sale, “All rubbermaid 40 to 45% off”, which would continue until it was all gone. Of course, that for 5% over our cost.
Then one year, the District Manager sat in on the buying decision. He invited in the Dept manager. They bought half as much for a better lower cost. The next year, will never saw the Rubbermaid saleperson anymore. We got instead five containers of plastic goods that sold for 10 to 20% over cost from China. In a variety colors, I might add.
Sure. Established stores. But when they’re launching a new store, they can afford to run it at a loss until they’ve killed off the competition. In fact, that’s the business model.
No. Prices vary from store to store. And I don’t buy the argument that small stores “should” fold or “deserve” to fold. In the scenario I described, Wal*Mart is using profitability in one product line (electronics) to offset predatory pricing in another product line (books).
It’s “eke,” by the way. If you didn’t already realize it, I own a bookstore. I have no problem competing with Borders, B&N, or any of those others. They aren’t going out of their way to bankrupt indy bookstores. Wal*Mart is. I’ve seen what they’ve done to other small towns, and I haven’t seen anything yet that was actually good.
Whoa, dogie! It’s better for the economy to destroy jobs and replace them with fewer, lower-paying jobs while siphoning money out of the local economy and sending it off to Bentonville? It’s better to manipulate the market to remove choice from consumers?
Since you seem to like WalMart so much, go spend some time in one. Preferably in a new one in a small town. Pick items that other stores in the area carry, and compare the WalMart store’s prices with the Wal*Mart Web site. It’s just like Barnes & Noble. The prices on the Web site don’t match the prices in the stores.
:lol:
This makes no sense. That last paragraph, rephrased, states:
“So if you are the CEO of Timex and you are looking to expand your company, you can either produce watches or distribute them - you can’t do both. If you make them, you’re a free-marketeer. If you sell them, you’re a… whatever.”
I mean… what is Timex to do with those watches it’s creating? Avoid retail distribution outlets? If it makes a deal with Wal Mart (or Target or whomever), why does that necessarily prevent them from making watches?
