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MineralMan

(151,303 posts)
31. It's also the economy of scale.
Mon May 24, 2021, 09:47 AM
May 2021

Price out a major appliance at a mom an pop appliance store, if you can find one. Then, check prices at the big box stores. The difference is striking. Price them online, as well, including delivery and set-up.

If it's your money you're spending, you'll probably go with the big box store. Almost always. You can see the difference in your checkbook or credit card statement.

That's the real reason local retail businesses can't compete. They can't buy the railcar loads of some model of appliance like the big box stores do. The local appliance store doesn't have the appliance you want in stock, anyhow. They can't afford to buy products on spec.

They also can't afford fancy shopping cart websites, either. Or they won't pay for those.

I work with a heating and air conditioning company on their websites. I have been doing so for years. They stock nothing. When they have an order, they pick up the product at a local warehouse, add their profit margin, and install it for their customer. The company I work with has a small staff of technicians on the payroll. A small staff. Most of their installations, though, are done by temporary contract technicians. They cannot afford to staff for peak sales, so they don't. They're one of dozens of smaller HVAC companies in our metro area.

Check Home Depot or Lowe's for something like ductless mini-split AC systems, and then ask for a quote from a local HVAC company. You'll be shocked by the difference in price between the two prices for the actual equipment. The big box store will arrange for installation by the same bunch of temporary technicians the local HVAC companies use during peak periods. They're on rotation at the big box stores, and get called in order of that rotation. Same technicians; same products. The only difference, really, is service after the sale. The big box stores suck at that. On price, though, local HVAC companies can't compete, to the economies of scale for the actual products.

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They got rid of middle managers. Those jobs and incomes for the community applegrove May 2021 #1
And yet, Amazon has a distribution center near where I live. MineralMan May 2021 #5
That must be a local rate. Ms. Toad May 2021 #16
Could be a local rate. However, we are pushing for a $15 minimum wage. MineralMan May 2021 #29
Further, Amazon distribution centers also have middle managers, MineralMan May 2021 #8
link? Kali May 2021 #2
I agree, you did right. padfun May 2021 #3
I was perplexed on why your previous OP Niagara May 2021 #4
That doesn't matter. MineralMan May 2021 #9
I don't think you were too subtle at all. HUAJIAO May 2021 #15
If you really think about it... padfun May 2021 #6
Each transaction generates a different set of cash flows, wages and benefits, profit destinations bucolic_frolic May 2021 #7
as I do too !! very well put bud ! monkeyman1 May 2021 #10
A dairy company expanded into my town and won the school district bid and hired me. brewens May 2021 #11
I was in my "local" Home Depot yesterday, ready to drop a pretty good sized order OAITW r.2.0 May 2021 #12
Yeah. That's pretty common. Most big box stores these days don't deliver MineralMan May 2021 #30
Tax free works us the problem JT45242 May 2021 #13
Ding! We have a winner! druidity33 May 2021 #20
Warehouse and distribution center work is very hard work. MineralMan May 2021 #35
How can we blame them. I mean, Dark n Stormy Knight May 2021 #25
As much as I don't like Walmart and while most people claim the opposite, but... marble falls May 2021 #14
Why do you think people suddenly stop shopping at small businesses? HUAJIAO May 2021 #17
Its the centralization of the jobs, come on we know they add but who wants all that in a few ... uponit7771 May 2021 #18
It's also the economy of scale. MineralMan May 2021 #31
All true, I just don't like the centralization of distribution/selling because a lack of oversight uponit7771 May 2021 #36
Economics. It's all balanced by that. MineralMan May 2021 #37
Free market forces don't work good enough for oversight, look at healthcare in America uponit7771 May 2021 #39
Mineral Man; your post are always good friend of m and j May 2021 #19
That's very kind of you to say! MineralMan May 2021 #38
There was an issue with your earlier post??? I understood exactly what you meant, even before niyad May 2021 #21
Yet nobody has responded with the word MONOPOLY ... aggiesal May 2021 #22
When that comes close to happening, let's address it. Until then, we shop at Amazon and Walmart.... George II May 2021 #24
They've already done it in some regions. n/t aggiesal May 2021 #26
I agree. Too many are too quick to criticize if you don't shop at the local merchant, thinking.... George II May 2021 #23
Similarly, I use a brand name cleaning service PoindexterOglethorpe May 2021 #27
All I know is Amazon is getting better with their employees Tree Lady May 2021 #28
More specifically, there is really no such thing as a "local" appliance dealer... brooklynite May 2021 #32
Here in the Twin Cities metro area, there are a few. MineralMan May 2021 #33
Delivery and instillation are around to stay. RegularJam May 2021 #34
It has been around since my parents' days. Treefrog May 2021 #40
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