Why can't local businesses compete?
How can Amazon/Walmart afford to sell at such lower pricing than local shops? Volume of business is the most bullshit argument I hear from most people. I agree product acquisition price is lower because of high quantity purchase. But that and maintaining a larger company comes with is own overheads and loses which can easily offset the reduced acquisition pricing.
Do you know how long Walmart and amazon will hold up account payable?
For the amount large retailers would owe, sustaining a longer wait on account receivable for vendor would be more challenging than sustaining from smaller retailers. Infact large retainers are cash rich due to high inflow of money from investors/stocks. Smaller entrepreneurs are many a times self funded and would like a longer credit. What do you think?
Local businesses can: 1. Find one profitable business that’s not retail. 2. Use profit to cover loss from low retail price
I actually found it entraining to read up on how Walmart was starting up. Pretty amazing that it was a small business just a few decades ago. Today the big part of it is the brand. Every town has it. It's pretty decent all things considered. Many things are well priced. There's many Asian supermarkets that are doing just fine, so I'm not convinced that local businesses can't compete.
Walmart owns a lot of real estate. New local shops have to pay a lot in rent. But that’s just one reason. I recommend you read Sam Walton’s book - the Audible is great.
Volume of business
Pretty simple. 1. Volume of business 2. Amazon having deep enough pockets to forgo profits to capture market share until volume is large enough that their overheads are relatively lower 3. Good supply chain strategies that help scale the company without taking much from the bottom line i.e even with large volume, overhead costs stay fixed or low
Local business needs to focus on the niche. Walmart never gonna do well with say variety of flowers and local shops can always distinguish. Competition on assortment, price, quality and convenience, you have to choose your own niche. Walmart can’t do all and as matter of fact, they lead on price and convenience but stay on par on assortment and quality in general.
Local businesses need GRPN to get customers in
LOL