In short, franchise laws protect manufacturers from opening stores that would compete and take business from the existing dealerships. As covered above, dealerships are collectively very large, and since they happen, collect the sales tax from the consumer, they become one of the largest tax payers in a given state. This has given them tremendous influence over Congress, and with the power of dozens of dealer associations across the country any manufacturer attempts to start a sales operation has been shut down.
Barnes & Noble is in trouble. You hear that, in worried tones, when you talk to people in the book business. You feel it when you walk into one of the chain’s stores, a cluttered mix of gifts, games, DVDs (DVDs?) and books. And you really see the problems if you dig into the company’s financial statements.
Revenue from Nook, the company’s e-book device, has fallen more than 85 percent since 2012. Online sales of physical books have also plummeted. At the stores, where business was once holding up, it’s down about 10 percent over the past two years. Several stores — like my local one, in the Washington suburbs — have closed, and many have reduced staff.
I remember the day the Borders in West Windsor closed. It was sad walking through the isles with empty shelves.
But I’m torn because I’m part of the problem. I shop a lot on Amazon. Price is only part of the reason I shop on Amazon. A small part. I shop at Amazon mostly out of convenience. I don’t like malls. I don’t like shopping.
With Amazon I can look through a catalog of products, read the reviews, make a purchasing decision, and expect delivery within a few days via Amazon Prime.
I don’t do all my shopping with Amazon. I still shop locally. I look for items with local shops first. I want to support the people who live in and own businesses in my neighborhood. I tell myself that when I shop locally, I am supporting the local economy. The money spent at local stores helps support the very kids my kids sit next to in class.
But my town has no local bookstore. We used to have a used bookstore. We don’t have any electronics stores. The Radio Shack closed.
But I don’t shop at Best Buy either. I don’t shop at Target. Amazon has more variety and convenient and quicker shipping. Via an app on my iPad.
Reacting well to competition requires critical analysis of your own product and its shortcomings, and a complete, open-minded understanding of why people might choose your competitors.
Hmm … this one will stick with me all day. I don’t sell a product but one could argue that I sell my services to my full-time employer. What am I going to do today that will help me understand and overcome the shortcomings of the service I’m selling to them?