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Strategies & Market Trends : Rande Is . . . HOME -- Ignore unavailable to you. Want to Upgrade?

To: Rande Is who wrote (13754)	10/20/1999 2:47:00 PM
From: Jon Stept	Read Replies (2) \| Respond to of 57584

Rande, Etailing vs Retailing discussion... Rande, you make some really good points that require further discussion. I would imagine that any business owner these days knows now after the Compaq distribution events last year that e-commerce could effect their supply chain. The supplier/distribution rules for business relationships have changed. The Compaq news last year was a wake up call for all distributors. If the manufactuer cannot survive in their business because of the direct order/catalog competition, can you blame them for moving to that model? Would any business not do the same thing? If they can't make money, they can't make money and that is pretty much the primary rule. If IBM changes it's model now and wants to change back, I don't think the distributor will close their doors, especially if they can make money selling IBM product. Why would any distributor close their door to making money because of a dissolved business relationship? That does not sound like very good business sense to burn ones bridges. Just charge them to open the bridge again. The distributor may change, not have to rely on only IBM. It does not make sense. If their is money to be made distributing a product, IBM or any other, there will be distributors there to do it. No? Also, the distributor can change their business model to reduce the price for the supplier, no? Why is the manufacturer to blame... doesn't the distributor deserve some of the responsibility for not providing a profitable environment for the manufacturer? Or for relying totally on one manufacturer? Why are you only blaming the manufacturer? I would think the distributor knew perfectly well what was going on. Don't you think it is covered in their distribution agreement? You also bring up a general comparison of etailing vs retailing, and my take on your opinion is that brick and mortar shoppers will lose essential parts of that experience when they go online. I agree, they will lose that. You are not mentioning that this is a trend that has been occuring for the past 100 years, not just now. There are so many things that the consumer will lose becuase of the drive to cost reduction and we have seen it already with gas stations- nobody fills your gas tank anymore or checks your oil or fills your tires. Brokers- we are moving to a self-serve world for real-estate, electronics, cars, clothes, groceries. Who gets their meat at a butcher anymore? A baker? A tailor? A milkman? The fruitstand? A newspaperboy? A FullerBrush Salesman? An Encyclopedia Britnaica Salesman? The Insurance Agent? The Doctor? (big, BIG, bummer here) or the Hardware store person. Where are they all?... wrapped up in some faceless corporation due to profit motives that have left the consumer to do it on their own. And you can still get any of these (I think... have not seen any milkmen/women lately... maybe somebody does this... hmmm... interesting idea...), but most don't because there are cheaper and adequate alternatives, or they can't afford it.... and this is the market place, the consumer that has spoken...no? And I guess that brings up another point. If IBM is giving up something that so many people will miss, isn't that an opportunity for another business? If Etailing is merely fashion and will expire or greatly reduce, then won't other companies change their model back? Are there examples where this has happened before? If there are, I don't see it. The drive is to lower prices, cheaper made goods and the steamroller of technology. If not wouldn't the maret for e-tailing dry up and consumers brick and mortar for their purchases? These are forces of the nature economics. Years ago, a family would not dream of putting their old washing machine out on the curb for the trashman... now, because of techhology, this stuff is disposable. It is a continuation of what caused the small stores that made goods individually to be put out of business by mass manufacturing that turned into the faceless corporation. I mean, isn't this just progress? Progress, with some benefits and some cost? Is it really any different? Just my opinon. Jon :)