Will the Last One to Leave eBay Please Turn Out the Lights?

I have bought a lot of stuff on eBay over the years. I even bought a Jeep on there and had it shipped from New Hampshire. The site used to be known as “America’s Garage Sale” but lately it has devolved into “just another shopping mall.” Heck, I’ve even bid on keyboards I thought were being sold by individuals only to find out they were from Newegg.com.

My New Years resolution was to finally clean out the “spare parts” which have accumulated in my office over the past 20 or so years in IT. My goal was to have at least one entire bookshelf (preferably two) completely empty by the end of March. Complicating this goal is the fact I have been working remotely 6 days per week on a contract so I only have a few hours on the weekend to take photos and list the items. I wasn’t trying to make money with this stuff. I put the initial bid at what I believed the postage would be and offered free shipping. If someone could use it that would save me a trip to the electronics recycling drop off.

As luck would have it, I now need to travel to my client site for a week. I had gotten notices in the past about things I was bidding on when the seller went on vacation, so I thought I would try it. After half an hour I finally had to endure a call to customer service. The only way you can notify bidders you are out of town is to open a store. That is why eBay has become just another shopping mall, eBay is forcing it in that direction.

I made a few phone calls to people I know. Nobody uses eBay anymore. Even though Craigslist has the public image of “the place where serial killers shop for prey” they have all moved there, and just for the shopping mall reason. Personally, I never used Craigslist because I viewed it as a place populated by people too cheap to pay for shipping, but now I understand.

Both eBay and Amazon are on the wrong side of a sea change occurring in the public mindset.

Ethics: Think globally, buy locally.

It has been in the works for a long time, but is finally snowballing. It started rather simply with some “buy American” Web sites. Then we had ABC News doing a “Made in America” series which was echoed in other shows to various degrees. The Republicans spurred it along by offering up Mitt Romney as their presidential candidate. (Someone I personally believe has directly or indirectly off-shored more American jobs than Obammacare ever could.) Even American Express has been on this band wagon for years with their Small Business Saturday initiative.

We should have all read the writing on the wall when the American Recovery and Reinvestment Act institutionalized this with a “Buy American” provision. Many didn’t. An MBA has to actually _have_ ethics to purchase things which are best for the country instead of their numbers for this quarter. Every person in America has not only heard about government entities being broke, they have been personally impacted by it. The blame spreads far and wide. Every person who buys on-line avoiding sales tax is “off-shoring” local retail jobs though they want to believe they are “just saving money.” Every Wall Street darling corporation has been burying profits in tax havens off-shore to avoid taxes. You have all heard about the “Double Irish” tax scam, but it seems that story about certain large corporations being allowed to create entities which have no country of origin keeps getting quieted. If you cannot do the math, “No Country of Origin” means there is no country able to tax their profits. 99-percenters, feel free to howl. When you are done howling though, find out who voted for those bills which became law and vote them out of office!

How many of you have noticed the 13 or so year agenda currently embarked on to change the mindset of America? The one which _will_ stop them from buying on-line just to avoid taxes and _will_ stop them from buying a cheap foreign knock-off at Wal-Mart. You heard all of the news reports, you just didn’t look down the road.

When I was a child on a family farm we knew where our beef came from because we raise most of it ourselves. Eggs came from “people up the road” unless the hens hadn’t laid, then they had to come from town but the little store in town bought them from a big chicken farm not that far away. In short, we either raised it, knew the person who raised it, or knew the farm it came from if it didn’t come in a can or jar. Someone told me the bulk of the food (dairy, meats, fruits and vegetables) produced in the Midwest were consumed within 60 miles of their place of growth. In my personal world it was true so I never questioned it. Whether true or not it was believable to many because that is the way they lived.

I point out the “barefoot in the snow” tail because this is now being institutionalized by state, local, and federal governments. The mindset is good for America and it will grow with each graduating class of school kids. This “fast buck at the expense of all” mindset which became prevalent in the 90s (think “Greed is Good”) has made a train wreck of the global economy, not just ours. It is slowly and surely being snuffed out starting with the school lunch program. Not only are school lunch programs begin directed to purchase locally grown food, some of those schools are actually passing along the knowledge about where food comes from. After years of knowing where the food you eat comes from, the leap back to “it came from somewhere” because difficult.

Before you dismiss this as a rant take a look around at the growing number of eateries serving customers who want free-range, organic and/or locally grown. People who live in Washington and Oregon have made BurgerVille  rather popular. Perhaps you don’t live in those states, but you probably don’t live too far from a Chipotle which has made a stand with the battle cry “food with integrity.” Even if you have lived under a rock this past decade you still had to buy groceries at some point and you _had_ to notice the ever increasing size of the organic/free-range section of your favorite store.

This is a mindset which starts with your food and continues to the rest of your life. People who eat like this start taking notice of where their clothes are made. They ask where their car is made. (The automotive magazines have been making this information available for years now.) Eventually it comes back around to the quality of local schools, fire, police, etc. Eventually it those stats people have heard about the percentage of a dollar spent locally staying in their community, like the ones from American Independent Business Alliance come home to roost.

So, as soon as these final auctions end, I will be closing my eBay account, and my PayPal account. I will finally have to figure out how to create an account on craigslist because that is now is “America’s Garage Sale” and it’s “local.

Barnes and Noble DVD by Mail Rental Service

It appears I chose well when the date November 13, 2013 became a pivotal date in “John Smith – Last Known Survivor of the Microsoft Wars” as that also seems to be the date Block Buster stopped shipping DVDs by mail. This is leaving a lot of people in a mad scramble since DVDs by mail was a very convenient thing. No late fees and unlimited plans allowed you to watch a good number of movies each month if you had the time.
Flat monthly billing also had the side benefit of expanding the number of viewers willing to watch documentaries. I’m old enough to remember the days of paying $7 to rent a VHS tape. When I had to pay per movie there was no way I was going to pay to watch a documentary unless it was at least as famous as “Roger and Me”.

Whatever Dish hopes to achieve by shutting down the DVD by mail and retail locations isn’t going to happen. Speaking as someone who tried Dish in the past, it feuken blows. Having talked with people who currently subscribe to it, the service hasn’t gotten any better.

We have DirecTV out on the farm. We never rent movies through it. Why? I have to pay for each one I watch and I’m simply not going to do that. Now that STARZ is focusing more on its own series production than new movies the days are numbered for us subscribing to even that plan. Honestly, I watch roughly two movies per month on STARZ which I haven’t seen before.

If there wasn’t someone in the house who likes the Western channel, we wouldn’t have it. If I could teach that person how to operate the DVD player (don’t ask) the STARZ package would have long since been gone. I have been cruising the video clearance bins at both Big Lots and KMart whenever I’m in those stores. I have picked up a large pile of western, John Wayne, and Clint Eastwood movies for less than $7, most for $3. Some of the things are multi-DVD packs containing 5-12 movies. Many of these titles are the same ones the Western channel runs.

All of this leads to an interesting thought. What if Barnes & Noble gets into the DVD by mail business with in-store exchanges like BlockBuster had? Barnes & Noble has been doing many things trying to drive more traffic into their stores including the addition of toys, movies, music and many other products. How about a simple and low square footage solution? How about a DVD by mail service with in-store exchanges combined with a special section of the store, tiny, about two book racks in size, where they keep only new releases for rental? It would take a bit of doing to set up the rental system, but they don’t have to re-invent the wheel. Barnes & Noble already has large retail locations so the cost of initial setup could be viewed as an advertising campaign. Could it really cost more to setup than the holiday commercials they are currently running?

There is a big pile of BlockBuster customers now twisting in the breeze. Many won’t go back to Netflix because they’ve been there and bailed, myself included. If Barnes & Noble were to offer this service they would tap a market which has been unavailable to them. That would be a customer base which neither reads books nor goes into a book store.

Seriously, you’ve all bought a DVD at some point. How did you buy it? Did you go into a book store to get it or did you pick it up from a clearance bin? Even if you did buy it from Barnes & Noble you probably bought it via the Web site without ever going into the store. You would go into a book store if it was to exchange a rental. While you are there you might buy a coffee or something else which catches your eye on the way in or at the check out counter.

I do hope Barnes and Noble takes a serious look at this business. It would allow them to compete in a market segment Amazon simply can’t get into. True, Amazon can rent streaming video. They might even be willing to setup a DVD by mail service, but they can’t do in-store exchanges. So, when it is a rainy Sunday with nothing on television and you’ve watched your last movie, what are you going to do? I’m going to do an in-store exchange even if I have to drive 20 miles to the nearest Barnes and Noble to do it. I might even take all 3 of my 3-at-a-time subscription plan because if it is a nasty weekend I’ve just watched them all. Who knows what I’ll buy while I’m there. I read books, but I tend to buy them from the Web site only after I’ve heard quite a bit about them.

This idea should make money for Barnes & Noble, but even if it doesn’t directly make money, it increases store traffic.  So if it breaks even on cost it can increase per store revenue with the impulse buys and maybe increase the “regular” customer base.

Is 2013 the Year the Apple Rotted?

Speaking as someone who grew their career through the golden age of IT, when a company by the name of Digital Equipment Corporation was setting the world on its ear, I feel I have a unique perspective on this. I watched the rise of Apple, the fall of Apple, and the re-emergence of Apple. In truth, Apple didn’t do well unless it made piece with Steve Jobs. Sometimes it didn’t do well even when it had made piece with him.

One thing has become painfully obvious over the past few months. Steve Jobs appears to have been the only one putting new product ideas into the pipeline and he seems to have stopped when he got his liver transplant. Can’t really blame him, a liver transplant is something to be taken seriously.

The second thing which is obvious to anyone who ever watched “Pirates of Silicon Valley” or read anything about Mr. Jobs is that his personality could not tolerate anyone who thought they could be as creative as him. This leads to Apples current predicament, nothing in the pipeline and very little polish left for the existing apple products.

Of course, if you listened very quietly, you knew Apple has been in trouble for a while. The first red flag was when Apple stopped shipping OS updates for its computers. When a company is trying to milk its OS for revenue it is in trouble. If you don’t believe that read up on the final days of Wang…When they changed their licensing policy so an OS license didn’t transfer with an old machine. They decimated the used Wang market over night and ensured no new Wang computers would sell because the computer companies spent half a million on suddenly wasn’t worth $500 trade in.

I’m not playing the Apple stock right now, but if I was I would be shorting like a banchee. Even if Steve Jobs himself had anointed the new product guru and managed to transfer all of his knowledge and memories into that guru’s brain, the earliest a significantly new product could get out the door is a year from now. If you are talking about something as trend setting as the iPad or iPhone was, then you are talking five years.

Seriously, what is left in the world of geek toys? The Apple television hasn’t amounted to much. I have to ask if the smart phone market is even a market one wants to play in right now. The Samsung Galaxy is kicking bootie all over town and the price of entry into that market is astronomical. I’m not talking about the engineering costs as much as the marketing costs. If you don’t happen to be come an overnight You-Tube sensation you need a marketing budget big enough to run a presidential election.

This might be a time for Apple to re-trench, but I don’t know just how far back they would have to draw the line. They are being attacked on all sides.

http://www.businessweek.com/technology/content/mar2009/tc2009034_069800.htm

Right now it seems only their loyalist customers can be counted on, but, in reality that is a tiny chunk of their business anymore. Apple was trendy. When the fashion magazines declare the trend has moved, so will a massive chunk of their business. Some would say it already has.

http://online.wsj.com/article/SB10001424127887323596204578240440691304344.html

 

How Newegg Lost My Business

It is no secret that I buy from on-line vendors which pay sales tax in my state. It’s the only American thing to do. If you buy from Amazon to avoid paying sales tax, then the parasites of the world welcome you to their limited place in the evolutionary food chain.

 While we are at it, if you buy from Amazon, you also lose the right to complain about your children’s schools being shit, bridges neither painted nor repaired, the lack of both police and firemen or the lack of quality in them since you don’t get the best talent for the lowest wages, your problematic sewer and water systems, those hundred plus year old gas mains running directly under your house which could blow at any second, and a myriad of other things you feel are the responsibility of your state and local governments to maintain. You are the reason those things don’t get maintained. An on-line vendor took both jobs and sales tax from your state so the revenue stream your state has to work with dried up, all thanks to you.

 I used to buy most of my computer stuff from either Newegg.com or Microcenter because they both contribute sales tax to my state. Lately, I’ve noticed Newegg splitting my orders into multiple invoices so they can charge me individual shipping on my items. When one tacks an $8 keyboard onto an order with other items just to have another cheap spare lying around they do it because they want to take advantage of combined shipping. Getting charged $6+ dollars in shipping for an $8 keyboard that was tacked onto a larger order makes the keyboard NOT a deal. One is definitely money ahead to purchase a $12 (and presumably better) keyboard locally.

 No, I’m not writing this to get Newegg to change its policies. I’m writing this to let them know why my business will now be divided between Microcenter and Office Max.

How Long Before There are No Large Publishers?

This is a question which has been coming up more and more lately. Back in March I made quite a few posts on that author site I hang out on stating the business model could not survive. I have even had a previous blog entry about it last year some time I think.

Here is a prediction for you though:

Inside of three years there will either be no large publishing houses, or their financial condition will be worse than Borders was two years ago.

The future printed market is not wide scale distribution through traditional, but “available exclusively at xxx” like Craftsman used to be available only at SEARS.

I did some research and found that when book buyers at Target choose a title for their on-line book club (I didn’t even know they had a book club of any kind) it is generally a minimum 100,000 copies sold, but usually closer to 250,000 copies. We are, of course, currently talking about books available to the general book buying community. Currently they are using some broker/distributor which I have never heard of, but I cannot believe that company is getting into the middle of book buying transactions for free. If Target wants to really wade into the $10 hard cover market it is going to have to start making deals directly with Indie authors and small publishers. The other Big Box stores are all moving into the book market and many have joined the $10 hard cover battle.

While it is quite true that nobody could possibly hate Amazon.com more than I do, here is an interesting article.

http://online.wsj.com/article/SB10001424052748704912004575253132121412028.html?KEYWORDS=vanity+press+goes+digital

Please note the portion which says Amazon will be printing this book. It didn’t say Simon & Shuster (sp?), Random House, or any other large publisher. Amazon is going to print the book and compete directly with publishers who are selling books via their site. Quite frankly, this is the new model…well close to it.

  1. Books will be initially released in PDF or eBook form via authors directly (hopefully with heaps and gobs of professional editing first, because right now a lot of raw sewage gets released by CreateSpace and the other enabling firms which don’t mandate any professional editing.)

  2. A paid reader for one of the big box chains will read and like one of the titles.

  3. After checking with the author and verifying no other deals are on the table they will kick the title up to the buyer.

  4. The buyer will skim or just take at face value the paid reader’s recommendation, then make an offer to the author of “available exclusively at XXX”. No investment will be required by the author, they will simply pay them roughly $2.00/copy and contract out the printing themselves. Deal good for one year with right of extension.

  5. Author will tell friends and jump with joy when they see a small add in the weekly sales flyer for their local store.

  6. Some 30-90 days later, checks will start arriving and author will be quite happy.

The new model won’t have 20 layers of middle people all taking a cut. There won’t be pulped print runs (unless there is a major printing error) as we’ve all seen these stores run “end of season clearance” sales, which is what they will do with the few titles they buy and don’t put on the book club list.

New authors will end up with something they never get from a major publishing house. Marketing! These big box stores know how to work their customer base and they won’t select a title which doesn’t feed directly into their market. The companies buying movie options will have something they don’t often get…real numbers and direct feedback from Joe and Jane consumer who paid for and read the book. (Most of those big box book clubs have on-line forums for people to comment on the books.) In short, we won’t have to live through another “Sahara” movie or court drama.

http://www.omm.com/newsroom/News.aspx?news=767

Major grocery and supermarket chains have also started wading into the book business, and even the $10 hard cover battle.

http://new.publishersweekly.com/pw/print/20090427/17159-books-stay-part-of-the-grocery-store-mix-.html

Meijer has taken books in their store from a small rack on a back wall to a section of the store which stocks roughly 100,000 units according to some sources.

Think about it. What is pretty much the only thing fueling the growth of POD right now? Scams telling Indie authors they can make big money paying an exorbitant per unit printing cost if they “publish” with this service, only printing books as needed…after they pay for NNN copies up front. While there are legitimate business reasons to move long tail titles into POD, printing first run books which are not low volume textbooks or graphics intense is simply inexcusable. Toner puts out a much lower quality product at a much higher cost than ink. You need to have a print run of around 1,000 copies to get the benefits of ink, but for a big box store that is going to print 100,000 – 250,000 copies initially (or only 5,000 copies if the title is to be a regular shelf title) this is not a problem. (Actually, some of the direct to plate printers can only print about 50,000 copies with a single set of plates, so the bigger runs would be scheduled as separate runs of 50,000 each.)

Amazon has already fired the first volley. They have announced that THEY, not one of the publishers supplying them with books, will be the printer for that woman’s book. This won’t be an isolated case with them. It is one of the reasons they make it so free and easy for Indie authors to get books onto the Kindle. They want the Kindle to be the screen for those titles they choose to print. Now other retailers will have to buy books FROM Amazon if they want the title. If it sold 36,000 eBooks, it will most likely sell enough print copies to warrant shelf space. Some current industry numbers put eBooks at 5% of unit sales for a title: 0.05x = 36,000 x = 36,000 / 0.05 x = 720,000 if the industry analysts are correct.

Yes, there will be some die hard book buyers who will say nothing compares to the experience of reading a book with a $12 Latte before buying it from a book store. They are a minority. Everybody has to eat and go to the bathroom. This means everybody shops at either a supermarket or a big box store with a grocery section every week. If you don’t consider yourself a book buyer, how often do you actually go into a book store? Only during the Christmas shopping season? I thought so.