Recovery Summer 2014 Begins: Radio Shack to Close 1,100 Store; Staples to Close 225 Stores (independent, layoffs)
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What I wonder about is...since online purchasing is exploding, why are delivery jobs not exploding? A guy in a truck can only make so many stops a day. UPS, FedEx, USPS, etc ought to be hiring like crazy. At least some displaced retail workers ought to be able to drive a brown truck, right?
I know Amazon is working on delivery drones to fly the stuff to your house....but that's a ways off.
In the meantime, it's going to take a guy jumping out of a truck and running up to your door with your stuff!
Who says the delivery jobs aren't exploding?
All those deliverers and more may be hiring heavily in some areas of the country and not others. Delivery is much, much more than just the truck drivers; many more sorters, expediters, freight forwarders, order fulfillment agents, boxers, mechanics, and others are needed than just truck drivers. The cargo in one UPS truck usually requires over 100 other workers to make up the cargo that fills the truck.
My son, for example, worked as a delivery fleet mechanic for years. His only job was to make sure there were enough reliable delivery trucks at all times to meet their cargo demand. He always had a couple of trucks that were going to be out of service due to a blown transmission or engine, and part of his job was coordinating with another guy, whose only job was to make sure there were enough delivery trucks in his area to meet the demand. Both of them had their own record keepers, whose only job was to expedite all the bills that needed to be paid and to keep each vehicle's records complete and up to date.
That's at least 4 jobs, and my son wasn't the only fleet mechanic in town. His boss was another mechanic who serviced all the semi's and specialty vehicles, and his boss had his own associates.
How can progress be great when it will eventually eat into your profit margin based on lower sales because fewer people can afford your product/service? Remember, variable costs are tied to sales, but you still need to offset the fixed costs. This is accounting 101 here. If you do not have enough sales volume to pay off your costs and have extra, you likely wont be in business much longer. That's the issue I see. You want lower overhead but if you take it too far, you cause a stranglehold because it lowers aggregate demand because there aren't enough people working or in business for your product/service to make a sustainable net profit.
Brick & Mortar stores aren't going away completely, there will just be less competing chains and the remaining stores downsize to basically a skeleton operation. They have to compete with online retailers which have lower overhead and therefore can offer lower prices.
Whenever I buy something at an overpriced retail store I consider it to be a "convenience" charge in getting a product right away without waiting for shipment.
The last time I was at RadioShack I was low on cash and the manager just basically gave away the products to me. I still would rather shop there than at Walmart, where one has to wade through crowds of drugged up welfare recipients, empty shelves, and long lines at the registers/self checkout. And also that bad techno music they have recently been playing.
Radio Shack was going under long before this recession which like many business it just quickened. Happens even in best of times; tho just takes longer likely. China just had a Solar company default being the first ever. to default.
Boy, these two companies are in serious trouble unless they can prove they didn't close those stores and layoff those people due to obamacare.
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Remember, variable costs are tied to sales, but you still need to offset the fixed costs. This is accounting 101 here. If you do not have enough sales volume to pay off your costs and have extra, you likely wont be in business much longer. That's the issue I see. You want lower overhead but if you take it too far, you cause a stranglehold because it lowers aggregate demand because there aren't enough people working or in business for your product/service to make a sustainable net profit.
