lancewig.com

photo credit: JoshMcConnell

In case you didn’t notice, sometime between the 70’s and now, our good manufacturing jobs went to Asia.

Now, if you live in most of small to medium town America, there are 3-4 top segments to get a job in. Check the classifieds and you’ll see jobs for health care and education which can be respectable. Then you move on the the lousy jobs of sales, retail and hospitality. I call them lousy because I’ve worked them much of my life. I’ve worked at grocery stores, restaurants and hardware stores to name a few. After a year, I was often burnt out. Ask most people if they enjoy their job in a service industry and they’ll tell you that they’re biding time until something better comes along. I think the biggest form of burnout is having to deal with the public.

I suppose the interesting point I want to make today is that, in many cases, it’s much cheaper to shop online. The only thing keeping big box stores alive is that Americans have an incurable ‘want it now‘ syndrome as they walk into a store. Stores like Barnes & Noble and BestBuy often charge 30% higher on the exact same products. In a recession economy, I have to wonder if more people have caught on to this. The Asheville Mall just got through building this massive 2 story bookstore in front. I thought to myself, “you’ll be closed in 5 years.” Amazon.com will kill you in 3 ways.

• A huge supply of used titles
• 30% cheaper on new books
• The new Kindle electronic book reader

In good economic times, stores get away with huge markup, but now . . . I think not.

BestBuy is another store that is nearly useless. Many of their items can be had online for cheaper. Perhaps the radio installation and service center is useful, but other local shops do that as well like, Charlotte Street Computers and Sassys.

Now, back to the jobs issue. I’ve worked at some big box stores. Two years ago, I worked at Home Depot which was the most rotten job of my life for many reasons.

• They constantly shorted staff.
• I had to carry a phone and cater to 20 customers at once.
• The store was a mess. Managers never cared.
• People constantly walked in, destroyed your displays, moved parts to other locations in the store and left messes for you.
• The staff was so short that your coworkers would ‘hide’ in the back putting even more pressure on you.
• Blah, Blah, Blah

Anybody who has worked retail knows all about it. Now look at the idea of a website driven retail store. The website is very efficient. People don’t need to keep calling in to . . .

1. . . .ask to be transferred to the plumbing department,
2. to ring the plumbing associate who is already helping 1 customer with two others in line,
3. to ask if oak toilet lids are in stock.

With a web site, just use the search feature. Warehouses are run so tight, that you’ll know in a microsecond whether the item is available or not. There is a FASCINATING article about Newegg.com located at AnandTech. They show how this tiny little company runs an amazingly tight and fast business. The warehouse is highly organized, clean and efficient which allows Newegg to pass savings and speed onto customers.

We pay for other people to steal stuff. Doesn’t that piss you off?

Newegg’s efficiency is one reason why tech materials are very cheap on that site. But there are other reasons why shopping online is cheaper. You don’t have the mass amount of walk-in thieves that a brick and mortar store has. When I worked at Home Depot, they were constantly getting robbed. It was crazy. You would walk around to clean up and find all kind of plastic product wrappers where somebody grabbed something, ripped into the package and then plucked the product into their vest pocket. Gerber knives were always popular. A store like Home Depot will call this “shrink”. They always have an acceptable percentage of shrink that is tolerated each month. The money lost for theft and broken items is simply passed onto the consumer as a marked up retail price. Online stores like Amazon and Newegg have a very small amount of shrink because they have a warehouse setting where the public is not allowed inside.

Now, if I had to choose working at BestBuy or the Newegg warehouse, I would definitely take the warehouse. I would be cut off from the public and be able to do my job efficiently. I don’t know the wage difference, but it must be pretty similar. In addition, I bet it’s easier to get Sunday and holidays off. So, to me, the online store is part of the new ‘manufacturing’ job segment to come back to America. It’s a ‘good’ job, not some shitty retail position. As more online stores take off, more shipping centers will get closer to smaller towns. Look at BlockBuster. They are going to die this year, I hope. Netflix had a fantastic model that is beating them out. Netflix started with one warehouse and now that have one in nearly every state. Netflix DVD’s usually get turned around in 1-2 days.

So there are better jobs in the warehouse, and also better computer programming jobs for the guys who get to build the website. The guys who drive for UPS have a bit better job than retail. The big key here is keeping the public, who has become insanely idiotic, out of the store. Make the public interface with the website. I know it sounds awful. Sometimes I hate having to interact with a website that wasn’t designed well. But I can tell you, interacting with Amazon.com, Dell.com, Newegg.com and many others has been a dream experience for me compared to going into Bestbuy.

-just saying.

With that said, there will always be a need for some local stores, especially with food and hardware. Even so, I look for shipping efficiency to improve each year, allowing more and more to be ordered online. It creates better jobs, saves gas and saves time. People have been slow to adapt, but now that we’re all broke, I look for this trend to accelerate.

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UPDATE: 7/20/2009

There was an interesting article in Business week today about how Barnes and Nobel was now hedging bets on a new electronic book reader made by Plastic Logic. One bit of math struck me as I read the article:

“The number of physical stores operated by the company, along with those of Borders and Books-a-Million, shrank by 19% between 2002 and 2008. Barnes & Noble’s stock is worth less than half what it was in March 2006, before a recession stifled the book-buying public.“

Physical stores by the three main book sellers dropped by 19% since 2002!  Amazon must be murdering them and their ridiculous lack of price markdown. I can’t begin to understand the math behind the new 40,000 square foot Asheville Mall Barnes and Noble store. The only thing I can gather is that the Asheville public still is not internet savvy enough to make use of Amazon.com. Perhaps it’s laziness or something more simple to define like the immense wealth of the residents here.

Sometimes I just don’t get it.