avi
Skilled
What about Engineering, R&D costs?
Discussion on brick and mortar stores
- Thread starter Darth Vader
- Start date
I used plural words since you seem to also like. Its very well my opinion.
And your pricing logic. Its way off topic of this discussion. of course OEM's make the item in 1/10 or 1/100 I pay. That will be the BOM cost. Does it mean they sell it for that? What about marketing or R&D costs? What about distribution costs? What about salaries for people involved in that? Even If i take all those, online shops will and will continue to give better price than B&M.
See, such statements from you really makes me or anyone reading you wonder whether you get the point of this discussion or argument or debate.
Yup, I see the point that you are making. It seems people are bullying you. But how about seeing that everyone here gets the point the online shops means lower price. And B&M do have their shortcoming like higher price, not a good customer experience etc. Have you thought that online shops means, you can buy anything you want from anywhere you want.
No wonder B&M's are going out of business already if you are a representative of the attitude they carry. Customers don't need middlemen partying at customers cost.
Privilege, yeah right. Not at the expense of customers. Guess what, if there is a channel that does not need to have 10 parties offered per month to make sales happen, guess where OEM's will go. Costs will be cut and those parties that you go to will end. Till then enjoy your "privileges" while they last. They won't be around much longer when OEM's have a direct to customer route. OEM's see the writing on the wall and will cut out the middlemen sooner rather than later.
Some one who gets something for free is indeed a freeloader. Here's a definition for you https://www.google.com/search?q=define:+freeloader
By the way you accepted that you are a freeloader with your own statement.
Secondly the freeloader is the one that is shameless, not the other way around.
And finally as someone else pointed out, you are too emotionally involved with this whole issue to have a rational discussion. Chill for a bit man. Getting so hot and bothered on the Internet will result in you blowing an artery or two well ahead of your time.
srkmish
Disciple
regarding oem charging 10 times as much, a simple solution is buying the product 2 or 3 years after it has been released in new or used condition. our obsession with obtaining the latest and greatest works against this logic though. for example, the original atrix is now available at 5.5k. im sure its manufacturing costs would be around same and it can do everything a present day 50k kitkat phone can do and even more i.e. atrix has hdmi connectivity
Sobirvs
Skilled
haha. Freeloader is someone who comes uninvited. We don't go there uninvited. Please, go out of your room, instead being a keyboard warrior. Those parties are organised by OEM's, aren't you understanding or what? It's customers call to not buy OEM's products and not let them make money, but you guys do, well that have consequences.
Also, we aren't going out of business. LMFAO. You fool. Also, we don't own customers anything to be nice to them even if they are being assholes. Still we do. Anyways, it's a concept completely out of your understanding.
Lemme ask you something, what does your father do and what exactly right now do you do?
Don't worry abt me blowing up, I do cardio, gym, excersise everyday and sometimes Yoga
Just now came back from it, otherwise would have replied to you sooner.btw middle man will always be there. ALWAYS. Flipkart , amazon, snapdeal , B&M , dealers, wholesalers, retailers, exclusibe showrooms, area distributor, North/south/ distributor, and after that a company's india company/warehouse(for eg apple india, samsung india, google india) are all middleman's. Please think of it again before making comments.
Blackend
Disciple
It's quite funny this situation with the B&M's. A few years ago, big retail shops like Big Bazaar, Reliance Supermarts and others were facing the same issues as e-commerce does today. Big retail shops could afford to buy products in the thousands each and cut out the middlemen and buy straight from the product makers. Because of this, the smaller kirana stores and other general stores were up in arms when the bigger retail stores had pretty much everything on a discount.
The same thing is now happening with e-commerce only at a scale which is probably a thousand times bigger. Shopping over the internet is here to stay. This is a free market and a business model that works for the customer and the business is always going to thrive over some thug charging you 5 bucks extra because he keeps the drinks cold.
There is a growing trend of middlemen becoming useless. IIRC, E-commerce companies buy directly from the vendors rather than suppliers and hence reducing the cost even further. What a brand gets by having a chain of suppliers is a logistics chain that works well. If Flipkart establishes that chain for itself and sells the product quicker, why would any brand not want to do business with them?
For anyone who works in a sales industry, answer this question: If a service sells a huge number of your products bringing you lakhs maybe crores of revenue but makes your other sellers angry, would you cut out crores of revenue and put your job at risk by not meeting your sales targets? Brands know the value of e-commerce, it works successfully in much smaller countries than ours. We may not yet be a successful e-commerce country but in 10 years when the next set of 10-15 year olds start getting jobs and start spending, the market will explode.
The same thing is now happening with e-commerce only at a scale which is probably a thousand times bigger. Shopping over the internet is here to stay. This is a free market and a business model that works for the customer and the business is always going to thrive over some thug charging you 5 bucks extra because he keeps the drinks cold.
There is a growing trend of middlemen becoming useless. IIRC, E-commerce companies buy directly from the vendors rather than suppliers and hence reducing the cost even further. What a brand gets by having a chain of suppliers is a logistics chain that works well. If Flipkart establishes that chain for itself and sells the product quicker, why would any brand not want to do business with them?
For anyone who works in a sales industry, answer this question: If a service sells a huge number of your products bringing you lakhs maybe crores of revenue but makes your other sellers angry, would you cut out crores of revenue and put your job at risk by not meeting your sales targets? Brands know the value of e-commerce, it works successfully in much smaller countries than ours. We may not yet be a successful e-commerce country but in 10 years when the next set of 10-15 year olds start getting jobs and start spending, the market will explode.
I am of the opinion that arguing with him is useless.
Another point is that I was looking at Quora, and why is Thailand currency stronger than ours? The answer was simple, they were more export oriented. We can do this, maybe Make In India is going to push off?
Here, most of the people are sales/middlemen. I dunno the exact figure, and I dont care. But, I look at the APMC traders, where they fleece the farmer by paying less, and the customer by charging more, and I know what most people feel.
Another point is that I was looking at Quora, and why is Thailand currency stronger than ours? The answer was simple, they were more export oriented. We can do this, maybe Make In India is going to push off?
Here, most of the people are sales/middlemen. I dunno the exact figure, and I dont care. But, I look at the APMC traders, where they fleece the farmer by paying less, and the customer by charging more, and I know what most people feel.
AMG
Skilled
Don't worry abt me blowing up, I do cardio, gym, excersise everyday and sometimes Yoga
I've never even been this scare in all my life.
Look at all the stuff you got to do.
Hack into TE, gain admin rights, get my IP address, track down the ip address, and if i am using a proxy server, hack into that proxy server, then get my ip address, then actually hack into the ISP database, then get my read address, then hire some goons, and then bash me up.
How long would that take you?
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@ others
deepakvrao
Adept
Coming from you that's hilarious. You are the one who constantly hangs around this thread waiting for someone to so much as breathe on this thread before hitting the keyboard.
Why should customers penalize the OEM when it's the middlemen, most of whom hardly add any value in the chain and their entitlements that need to be reduced in the scheme of things to get better prices to the customer. Customers just get the OEM's products from the channel that works best for them which currently happens to be e-tail. All those parties you enjoy only add to the OEM's overhead and probably is one of the reasons B&M's have a higher support price from the OEMs. OEM's will migrate more and more to lower overhead sales channels that become the most popular among customers. If a B&M happens to have lower overheads to the OEM vis-a-vis e-tail guess where the OEM will go.
Then, why so hot under the collar? The way you react so emotionally to anyone on this thread who holds a view contrary to yours appears to indicate a deep-seated fear that daddy's business isn't doing all that well and the great e-tail monster, with a miniscule share of the market at present, is going to run away with your breakfast, lunch, dinner and what not.
Now that's a very mature way of engaging in a discussion. Bring up something completely irrelevant. What are you? A 5 year old? Grow up! I have no interest in playing your "my daddy can beat up your daddy games". Go find someone in the schoolyard/college etc.
Yes, you do come across as a perfect example of someone really calm, composed and rational. NOT. All that Yoga not doing you much good as regards the calm, composed and rational bit, yeah?Yoga
Customers just prefer less middlemen and/or middlemen that have less overheads to the OEM resulting in better prices to the customer, that's all, plain and simple. Currently this happens to be e-tail and customers are sending that message to OEM's loud and clear. This is a new distribution mechanism, adapt, compete or perish. No one owes a business anything, just as you claim you owe customers nothing.
Anyway, I've said my piece and am done with this thread. Over and out.
Again. These statements just make people take you less and less serious.
First off there will always be a middleman between. Anything and Anywhere. But to take out the low-hanging irrelevant non-contributing fruits is the objective. 95% of the local B&M shops are that only.
Other than give order to the local distributor who gives order to state distributor who gives order to national or one of the major distributor, they do nothing. Now if we are able to give order to one main entity
who takes care of importing directly from the OEM (Flipkart, Amazon etc does that) how much in-necessary overhead can be removed? They don't stock showrooms, pay rent nothing. Yet they get national visibility.
Anyone can order from them using their laptop, tablet, phone from anywhere.
The ones highlighted are all middlemen who are going to be obsolete. There is no place for them in the new business model. Like it or not.
Sobirvs
Skilled
Okay, lemme make you understand man by a very very simple example. PS4 = 39,990 MRP (b&m store) when launched. XBOX One = 39,990 and 45,990 with kinect (This was exclusive to amazon which didn't include any "useless" middleman ).
Get my point?
As I said before, OEM's are evil, believe it or not.
One more thing - no one a irrelevant. Thing is no distributor in the world has this much of cash to handle operations all around the world, and no one has this much of power to handle a whole lot of city/state. That's where other stores comes in , investing their money and man power. Think abt that.[DOUBLEPOST=1415119645][/DOUBLEPOST]
I am getting hot and emotional? LOL. From 2 days it's like having discussions with kids here. It's the heat I am getting from you guys, it's not the other way around and I am still keeping my cool.
btw, not a single valid point of your post. Our discussion is over. Come back when you can answer my questions aswell, before questioning me again and again.
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Sobirvs
Skilled
Edit: Don't be that guy. *Very serious*, previous post was way serious. Don't.
Editv2: looks like I am done aswell.
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A typical B&M store tries to make anywhere from 20% to 300% margin and every middleman before them is trying to do the same. Nobody expects them to sell for their purchase price and people do know that they have a physical store to maintain and associated costs, but is it unrealistic to expect them to settle for a fair margin? They don't. They try their best to take advantage of the customer by creating monopolistic situations. And yeah, monopoly does not have to mean that you have to be the only seller selling the item. If you have two B&M stores selling an item and one is near your house and another is 30km away. You may be forced to buy from the store near your house even if they are selling for 20% higher price. Most business people hate competition and it is often easy for B&M stores to kill theirs competition.
Just to give an example, the cafeteria in our office building (not linked with our company) have 4 different caterers, As per their own descriptions, they supposedly sell South Indian, North Indian, Chinese and Western. Each of them sell a different style of food, but the only things they compete for how shitty the food is and only thing they do fairly equally is fleecing their customers. They fix the prices among themselves such that everybody is making a huge premium. If an item is too popular, they either remove it from the menu or increase the cost drastically so that others also get business. They don't let anybody else give them competition either inside the building or when they can help it, outside the building as well. This is also possible only because they are B&M operators.
But guess what, Online stores are no different. They are also businesses and they also act the same way when they have monopoly.
So what is the difference? Online stores cannot act like B&M stores because they usually almost always have competition to deal with and their business depends on their reputation. Whether the item you need is in your own city or in other city 200Km way or 2000km away or in a completely different country, a customer has the opportunity to evaluate the best deal and buy from any of them with the same amount of effort and the item would be delivered to their door step. That levels the playing field and breeds competition and competition is always good for the customer.
I don't care whether the online stores use predatory pricing strategies, but what they doing is offering value to the customer and competition to each other and to the B&M stores (which have been leeching of customers for a long time).
They cannot consort together to fleece the customer and even if a few of them try to group together, it won't last long because of the nature of their platform.
As long as there are a dozen different stores trying to give me options, as a customer, I don't really need to care how they are offering me the best price. Flipkart is running on 1300 crore loss because they were selling items at negative or zero margins. Is it really a customers problem if the B&M stores cannot keep up (leave alone make the insane margins they made earlier)?. Let them burn to the ground along with all the middlemen if that is what is going to happen. It doesn't also matter whether the online store is run by Indian's, Chinese or Americans or anybody else.
Shorter Summary:
1. Every business whether online or offline is by its very nature targets to get the max money out of their customers. They are after all not doing it for charity.
2. B&M stores have the opportunity to create situations naturally or artificially where they have complete monopoly, remove choices for the customer thereby allowing them to fleece the customer while the online model almost always have better chances of ensuring competition by the very nature of the platform.
3. A customer doesn't really need to care how he is getting his best price. As long as there is competetion and he has options to choose, its fine for him. The reason B&M stores are losing out is simply because the customer is being offered better options by others. It is not a customers problem if the B&M stores have more operating costs or the other reasons they love to cite.
Just to give an example, the cafeteria in our office building (not linked with our company) have 4 different caterers, As per their own descriptions, they supposedly sell South Indian, North Indian, Chinese and Western. Each of them sell a different style of food, but the only things they compete for how shitty the food is and only thing they do fairly equally is fleecing their customers. They fix the prices among themselves such that everybody is making a huge premium. If an item is too popular, they either remove it from the menu or increase the cost drastically so that others also get business. They don't let anybody else give them competition either inside the building or when they can help it, outside the building as well. This is also possible only because they are B&M operators.
But guess what, Online stores are no different. They are also businesses and they also act the same way when they have monopoly.
So what is the difference? Online stores cannot act like B&M stores because they usually almost always have competition to deal with and their business depends on their reputation. Whether the item you need is in your own city or in other city 200Km way or 2000km away or in a completely different country, a customer has the opportunity to evaluate the best deal and buy from any of them with the same amount of effort and the item would be delivered to their door step. That levels the playing field and breeds competition and competition is always good for the customer.
I don't care whether the online stores use predatory pricing strategies, but what they doing is offering value to the customer and competition to each other and to the B&M stores (which have been leeching of customers for a long time).
They cannot consort together to fleece the customer and even if a few of them try to group together, it won't last long because of the nature of their platform.
As long as there are a dozen different stores trying to give me options, as a customer, I don't really need to care how they are offering me the best price. Flipkart is running on 1300 crore loss because they were selling items at negative or zero margins. Is it really a customers problem if the B&M stores cannot keep up (leave alone make the insane margins they made earlier)?. Let them burn to the ground along with all the middlemen if that is what is going to happen. It doesn't also matter whether the online store is run by Indian's, Chinese or Americans or anybody else.
Shorter Summary:
1. Every business whether online or offline is by its very nature targets to get the max money out of their customers. They are after all not doing it for charity.
2. B&M stores have the opportunity to create situations naturally or artificially where they have complete monopoly, remove choices for the customer thereby allowing them to fleece the customer while the online model almost always have better chances of ensuring competition by the very nature of the platform.
3. A customer doesn't really need to care how he is getting his best price. As long as there is competetion and he has options to choose, its fine for him. The reason B&M stores are losing out is simply because the customer is being offered better options by others. It is not a customers problem if the B&M stores have more operating costs or the other reasons they love to cite.
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Who said online stores are not monopoly? They are not here to take profits? Why are you just fixated on one point or certain items? And why is it that the B&M stores not able to pull in such exclusives if they can sell at MRP? They are essential cogs as per you. Still you cannot match they service. They won again. I can go on and on and on.
Online stores do give discounts on many other things, faster service, better customer care, better selection. Amazon already proved in the biggest economy in the world, USA, that they have the cash and man power to handle end to end service. There are many EU websites which you havent even heard or will hear that does this. So does Adorama, newegg, buydig and many many others.
B&M as a concept will come to an end in next 10 or 15 years in India. Just like in US they need to re image themselves as sellers. Cut the non-necessary overhead and reduce the price.
I personally know the top PC dealer in Kerala or South India already is turning into online store distributorship. According to certain people I know around 30~40% of his sales are through that only. To be fair, he is one of the major distributor in India and not new to collusion to progress. And yea, his yearly turn over is in crores. One of the few PC dealers in South India who is able to pull that kinda numbers. His store is known for its arrogance, you want to buy a PC?? You buy what they offer. But got to admit, the man has vision. But certain people still hold on to the Idea that B&M are here to stay.