Shopping online can create problems
I enjoyed the Dec. 9 article on Millennial shopping trends. Deborah Fowler, interim associate chair and professor of hospitality and retail management at Texas Tech, said that local businesses must match prices of mail order companies if they plan to stay in business.
Suppose I operate a bicycle shop. I coach a shopper on what to look for, such as correct size, structural choices and service after the sale. Maybe a brake cable fails or he needs a more comfortable seat.
He takes advantage of my help, only to find the bike cheaper online, with free shipping. Fowler says 40 percent of Millennials want to support a local business. My chances are 4 out of 10 he will consider my bike. Likewise 6 out of 10 chances are I’ll never see him again.
He returns and tells me he wants my $299.99 bike, but found it online for $219.99 with free shipping. Should I cut my price by 27 percent to make the sale?
The bike cost me $150. With my rent and utilities, alarm system, window washing service, etc., each square foot of my selling area costs me $2.40 per month. The bike occupies 10 square feet and takes an average of two months to sell. So to my $150 investment, I must add $48 storage, for a total investment of $198. To make the sale, I match the online merchant and make a $22 profit.
I sell 80 bikes monthly and make $1,760, or $21,120 per year. Then at the end of the year the Lubbock taxing authority slaps me with my annual inventory tax. And I’m paying an extra $200 per month on stormwater runoff these days. So I give up and decide to operate a mobile food wagon.
Let’s see the Millennial buy his lunch online.
Am I annoyed by Millennials? Not at all. They are just as poor as I am.
They have to find the best price. So do I. So for my chef’s hat I’ll go online. I know my head size, and those hats are sure cheaper by mail order.