Archive for the ‘blog’ Category

WHILE WE READ OUR IPADS, CHINESE FACTORY WORKERS COMMIT SUICIDE

Sunday, June 6th, 2010

Well, in America’s never-ending search for more profits through exploitation, a rash of suicides has broken out at the Shenzhen, China factory where ipads are being made. While we leisurely read our books on the $500+ devices, the Chinese assembly line workers (250,000 of them) toil to keep up with the production of the units.

In doing so, it appears that the stress and monotony of the job has caught up with at least ten of the plant’s employees, who committed suicide. Maybe if we delve into the working conditions we can understand things better. First off, conversation on the assembly lines is prohibited. Workers are given a 10-minute bathroom break every two hours, and the workers are yelled at frequently by management.

Sounds like wonderful working conditions. But, of course let us remember that these factory workers are lucky to be making the ipads because they are being paid much more than workers at other factories…$293 a month! Imagine, two months of round-the-clock work to even think about buying an entry-level ipad! Oh, they are treated real nice there!

The workers are put up in living dormitories as many as 8 to a room. The 1.16 square mile facility run by Foxconn has its own hospital and restaurants — everything you need to keep the workers on base. But let’s not think that the company isn’t being proactive when it comes to the suicides… we have learned that Foxconn has recently installed netting around the outdoor stairwells of the dorms to prevent people from jumping. Well done, problem solved! And, in the Corporate America way to resolve any problem — they will throw some money at it by increasing wages for the employees around 30%. Good deal.

Just another example of corporations squeezing profits on the backs of others. With two million ipads sold within 60 days, Apple has been seemingly able tobuy two workers for an entire month for less than the cost of one entry-level ipad. So, read your books, enjoy yourself this summer knowing that the nets will be there to catch the employees who assembled your reading device!

Retailers Forum Magazine reports on current news and provides opinion on related news stories that our staff gathers from reporting bureaus. To read the entire article of ipad, check out Bloomburg Business June 7-13 issue.

WAL-MART GOES INTO THE TRUCKING BUSINESS

Saturday, June 5th, 2010

Because enough is NEVER enough and Wal-Mart just has to find additional ways to squeeze suppliers and retailers, they have announced that they are looking to enter the transportation business.

With its over $408 billion in sales for last year, they have plenty of clout and seem to be using it to tell their suppliers that they want to chauffer their own goods from the suppliers to their stores. Needless to say, if the suppliers were making a small margin in shipping and logistics, that will be gone. And think of all those unemployed truck drivers and closed trucking companies. BUT, it gets even better…

With Wal-Mart doing their own deliveries, they will have their own fleet of trucks and drivers (think about minimum wage workers!) and because one good Wal-Mart turn deserves another, they are also telling suppliers that they will now need to REDUCE costs of goods by as much as 6%, even though suppliers feel the real number should have been half of that!

So, the giant who has swallowed up many of our small businesses in communities, strangled suppliers with penny-pinching pricing, is now going after the transportation industry. It’s all about reducing their expenses so they can keep rolling back their pricing, while thousands of truckers around the country may stop rolling completely or, my guess is that they will be forced to work for the Wal-Mart wage… which from what I understand is not a living one!

So, consumers, go save a nickel and dime at these greedy mega-stores while your neighbors lose their jobs, independent retailers struggle and wholesalers get pinned to the wall. All so that you can save a nickel and Wal-Mart can make$408 billion!

VIRTUAL SPENDING… WHAT IS THIS WORLD COMING TO?

Saturday, January 30th, 2010

The economy is starting to chug along again, although lately the stock market has had such big ups and downs. Many fellow retailers have been having a hard time selling merchandise at their stores and are looking forward to a better year mid-year 2010. When I say retailers I mean real stores with real merchandise that buyers can touch and feel.

WHY do I expound on “real” merchandise you ask? Well, let me share this with you and maybe you’ll be as crazed as I was after I heard this…

Social games have become a new trend on the internet. This new industry is sucking in staggering amounts of money. In one recent 30-day span, Playfish, a creator of social games sold for $400 million. Playdom, another game company raised $43 million in financing, while another, Zynga raised $180 million. Many are equating this trend to something larger than the dot com trend back in the 90′s.

Companies like Playfish can develop a game for under $100,000 and complete it in just a few weeks. These virtual games don’t even have to fight for shelf space. What makes me insane is where the bulk of the social-gaming revenue comes from: the sale of virtual goods. The virtual goods are digital stuff that doesn’t actually exist.

While the games are free, users have countless opportunities to buy stuff: Playfish says it sells 60 million items a day, from $14 engagement rings to bacon sandwiches that cost a few cents. The goodies make it easier to advance in the game.

Imagine that…people are shopping and they are spending… ON MAKE-BELIEVE MERCHANDISE! How sad is that? Well, sad to the tune of $75 million in sales for 2009 that could double this year! For fake bacon sandwiches and engagement rings for a game!!

Is it just me? Have I gone insane? How tempting would it be for us retailers to post signs in our stores offering “virtual” jewelry — just $29.95 for a pretend ring! And here we have these venture capitalists chasing these gaming companies to throw money into them. Then you have the players willing to spend real dollars for birthday parties for a digital pussycat! Can you say $75 million? I think we’re in the wrong business!

Have you heard of this? Are you a gamer? A retailer? Blog with me and let me know what you think.

YOU KNOW WHAT GRINDS MY GEARS? A missive on the economy today.

Sunday, May 31st, 2009

You know what grinds my gears this week? Let’s start with the GM bailout where we funneled tons of money to the car maker and now learn that they most likely will file bankruptcy (if they haven’t already). And their bankruptcy will be unlike others because they do not have to pay it back! Instead we Americans will become the shareholders for this company. I don’t know about you, but I certainly would not have chosen to purchase ANY equity in ANY auto company these days. But, there’s no choice for us, is there. We will work hard and diligenty in our businesses that heaven forbid fail (we will not see a bailout) –yet our proceeds that we pay taxes on will invest in these mis-managed, bloated companies with no vision for the future.

I have always maintained that if these large corporations were run like our small businesses we would not have the mess that we have today. I never met ANY entrepreneur in a small business that would ever run their company as haphazardly as the Fortune 500′s. And those top corporations executive payscale is many times hundreds or thousands that of the successful small businesspersons. It really grinds my gears.

Moving along to some other gear-grinding news… The space shuttle. Now, maybe I’m not a rocket scientist (no pun intended) but I just heard on the news that because of the bad weather last week for the space shuttle landing they had to divert the landing from Florida to Edwards Air Force Base. OK, that’s fine and we were all glad that everyone landed safe and sound. However, the second part of the news today was that they now need to get the Shuttle back to Florida and they will piggyback it to a jet at a cost of over $1 Million. I actually heard it is more like $2 Million. Then, they will clean it up and send it back into space.

Now, I don’t want to sound like I am anti-space program, but these days I think maybe we can put the space program on hold, leave the shuttle at the Air Force Base for a little while and use some of the millions and billions of dollars we shoot into space towards repairing our nation’s economy and infrastructure. I’m just saying! Maybe the government keeps shooting things into outer space as their escape plan — you know, they’ll pack up the top leaders and transport onto another planet — having driven the earth into disrepair. Look, I love Buzz Armstrong and I fly my flag as a proud American – but priorities people! Again, thinking as a small businessperson – how many of us who have financial difficulties are going to invest money we do not have into exploratory programs? It just doesn’t make sense.

Let me close with this….I was in New York City for the Book Publishers trade show which was delightfully crowded with book companies and filled two floors of the convention center. The book industry is showing it still has legs. On the way home I drove down 6th avenue and noticed a good deal of police action, barricades and crowds. I figured it was one of many parades or street festivals the city holds on weekends. Lo and behold on the news this morning I learned that President Obama and the first lady took an afternoon trip into the city to see a play and have dinner. My wife and I like to see a show and have dinner once a month or so also. The difference is that our expense for the evening is around $400 or so, not $150,000 that it costs the taxpayers yesterday. And if my business isn’t doing well I sure as heck will pass up the $400 theatre tripand substitute it with Netflix and take-out food for that month. But, again, I’m not in the government. I don’t begrudge the President a night out but that $150,000 (and you know it’s probably more than that) is our tax money at work. I’d rather it be working somewhere else. Maybe next month the first kids can put on a home-made show for the folks in the third living room at the White House. And I hear the catering at that place is great!

Till next time…

HAVE WE BOTTOMED OUT ON THIS RECESSION YET?

Saturday, May 9th, 2009

Being in the publishing business and a very active reader (I read between 5-10 magazines and newspapers a day),  there is a mixed sentiment on the recession and if we had hit bottom yet. Having been in the wholesale and retail industry since 1981 I have weathered a few storms in my time.

The pundits had originally said that we had not bottomed out yet and there might still be a while to do. That was a few months ago. There has been a lot more positive news lately and we have seen it reflected in slowing unemployment numbers as well as a little rallying in the stock market.

I think that we may have seen the worst and according to many turnarounds I have been reading lately it is estimated that the changes will start by the third quarter. The latest bank stress tests were encouraging and set the stock market to a level that wiped out this year’s loss figures. We also just got word that April retail sales figures were better than expected.

It looks like the brakes are on and we are making headway in improving our economy. Consumer polls are showing that there is a bit more confidence in the marketplace and they are seeing a light at the end of the tunnel. Being that a great part of this recession was the consumer halting their spending, this perspective is important.

I see from the calls we are getting that there is more business being conducted in the wholesale merchandise industry than has been during the last quarter. Trade show attendance is rising slightly and there is more confidence by our fellow businesspeople. When people start spending again we will be more secure in feeling that the worst is over — and there has been a little spending recently.

We’d like you to share your opinions. Do you feel more confident that things are on the upswing? What part of the country are you from and how are you finding local business? Take a minute to share with us.

Here’s What Grinds My Gears…

Monday, March 9th, 2009

The news for the retail industry has been discouraging since prior to last Christmas season. We read now that many established stores will be closing down this year. I read that it is estimated that over 40,000 retail stores will close this year. Now, some of them deserve to close as they were mismanaged and honestly I never understood how they even stayed around in the first place.

Also, remember when you read the doom and gloom news that stores like Steve & Barry’s and Mervyn’s have closed down through bankruptcy that perhaps this was a pre-meditated move. I recently read an article about the founder of Mervyn’s who sold the chain to an investment group thinking that they would carry on the name and promote the business. The article showed that the investors seemed more interested in the sum of its parts (real estate, real estate, real estate!) Same with Steve & Barry’s? Also saw National Wholesale Liquidators decided to liquidate themselves stating the tough economy hurt them. Hurt them? They sell CLOSEOUTS for goodness sake. The dollar and discounters are doing great when times get tough. Instead, I think they found a way out of their unsuccessful locations and a way to STIFF their suppliers. It was really interesting how some of the family members of the chain BOUGHT BACK their own stores in the bankruptcy auctions! They cherry-picked the profitable locations and cleared the liabilities to get a fresh start.

As a small business we’re not going to get the investor speculators to throw money at us. If we independents don’t step up and work harder and smarter we only end up going out of business. No fanfare. No front page in the Times or on Bloomberg’s news site. We simply have a clearance liquidation sale where people in the community who never bothered to stop into the store come in and feign sympathy as they buy for 75% off the dollar. My favorite line at these closing sales are “Oh, what a great store, it’s too bad.” This, coming from people who never bothered to stop in. And another local small store hits the dust. More community blight as downtown areas turn to ghost towns and property values dwindle down.

The small business is the backbone of our country and our economy. I can only hope that the new administration realizes this and steps up to assist our struggling businesses by emphasizing the need for communities to embrace their small businesses. These are your neighbors, sharing their love and concern for your community. The big box stores don’t care – they will take your money and put NOTHING back, sending their profits to their headquarters eons away from your hometown.

As small businesses we need to PROMOTE LOCAL SHOPPING with signs like “Support Your Local Merchants” and programs to encourage shoppers to stay local. We’re all in this together, as neighbors.

Well, that’s what Grinding My Gears this week!