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Misc Topics

  • Counter Culture
  • Hacker Spaces
  • Confirmation Bias
  • REC trading and valuation
  • Super Memory

Retail Weirdness

The retail spaces in the US are getting more elaborate as the merchandise they sell is getting shabbier. The economics of the retail business is driving this trend. Investment in the retail space is part of the capital budget that is financed at ever lower interest rates. That investment is amortized over long periods of time and is not a major factor in the profit & loss of the business. Merchandise sales, however, is evaluated on a per transaction basis. Each transaction must show a profit to boost the bottom line to drive company financial results and stock valuation. Retailers must drive down costs or increase prices to maximize the profit from each transaction. As long as a retailer can show it is making a profit from ongoing operations (sales) it will be viewed favorably by wall st.; even it is losing money after overhead costs are factored in. The sales transactions are the engine that drives the company as long as that engine is running well it can be scaled up, sold, or milked as the management sees fit.

Since price increases are difficult in the present recessionary climate, cost reduction is the main target of transaction optimization. Increasingly, products are being made in China or elsewhere. The shelves of my shiny new local drug stores are filled with row after row of a mind blowing variety of little consumption units. There are several hundred different hair care products. Hundreds of choices of candy and snack products, vitamins and pain relievers in stunning quantities. It is hard to evaluate the quality of all these different products. Many of them, I suspect, are the same things in different packages, especially the personal care products (see Poorly Made in China for a description of Chinese made personal care products where shampoo, bubble bath, and body wash are all the exact same formulation). Increasinngly, it seems, the quality doesn't even matter. It is the act of choosing and aquiring a new product that is th evalue added. The actrual product is consumed or thrown out in a very short period of time. If the quality was poor then there are still hundreds of other choices to be bought and tgried. It is getting more like the consumer society portayed in George Lucas' THX 1138. People buy cunsumption units that they talke home and shred jiust for the pleasure of buyint them.

Make a marin hacker space logo out of resistors/parts (like coffee beans a large ARC) and photograph

researchtopics.1395851864.txt.gz · Last modified: 2014/03/26 16:37 by
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