Quote of the Day: Benjamin Friedman

“On the whole, the problem with new books is that there’s a list price set by the publisher and a discount price that’s also set by the publisher. So, as a new bookseller, you have no control over what the book sells for or what you pay for it. With used books, if you’re smart, you find ways to get them cheap, and you decide what you price them at.”

“As a general rule, on any book, a used bookseller is probably making twice as much profit as a new bookseller. And that’s the difference between making it and not making it, because the profit margins on new books are razor-thin. At a used bookstore, no one is getting rich, but you can make enough to stay alive.” – Benjamin Friedman, co-founder, Topos Bookstore Café, as quoted by The Awl.

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Working on the (Supply) Chain Gang

“For many companies, competing both online and at the mall can mean trading fat profit margins for more customers—at least for now,” reports The Wall Street Journal. “Fashion retailer DSW Inc. has given shoppers the option of placing online orders for out-of-stock items without leaving its stores. And, the chain is both fulfilling online orders and accepting returns at its growing number of locations.”

“The company is betting those efforts will pay off by increasing customer loyalty even though they aren’t adding to profits in the near term, said Roger Rawlins, who oversaw DSW’s omnichannel strategy before recently becoming CEO. He said customers who buy DSW products through multiple channels spend two or three times as much as those who shop exclusively in its stores or online only.”

“The strategy ‘ultimately allows you to grab additional market share, and then as we learn through using all these capabilities, we hopefully should be tweaking to be able to generate incremental profitability,’ Mr. Rawlins said.”

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Shipping Is Never Fast (or Cheap) Enough

The Wall Street Journal: “More than nine of 10 shoppers said they considered ‘same day,’ ‘next day’ and ‘two day’ delivery to be ‘fast,’ according to consulting firm Deloitte’s 2015 holiday survey of some 4,000 shoppers. At three to four days, only 63% called it ‘fast,’ and just 18% of shoppers considered five to seven days ‘fast’.”

“And customers for the most part are no longer willing to pay extra for expedited delivery. Shoppers on average said they would pay at most just $5.10 for same-day service, in the Deloitte survey. A quarter of shoppers said they wouldn’t expect to pay anything at all.”

However, absorbing the shipping may be worth it to some online retailers because it can reduce the return rate: “When you go to a store, you have that wonderful delight of carrying the bag down the street,” says David Maddocks, chief marketing officer of Cole Haan. “Online, after you click, you have to wait. And during that time you can fall out of love.”

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