Forum Discussion
westernrvparkow
Jul 19, 2019Explorer
philh wrote:Your hardware guy wouldn't have kept Home Depot and Menards at bay even if he had undercut their prices to begin with. The big box retailers have huge pricing advantages due to their size. Their logistics alone give them a competitive advantage. I seriously doubt that local hardware guy made huge profits before the Box Stores set up shop nearby. There has been consolidation in that industry for as long as I can remember.
As a free market libertarian, this bothers me a lot... but working for an international firm and doing business all over the globe bothers me that other countries are permitted to apply tariff's to our product and we have to just sit back and take it.
Another problem here, If you think a US mfg is suddenly going to sell their product for less money, you've been smoking too much of something. They will raise their price to match the importers price.
WRT the business owner forced to raise his prices... gotta love free market and options. I watched a local hardware business known for charging 50% more than the big box stores. He Lowered his prices some when home depot opened up 7ish miles away. Now that Menards is opened up 2 miles away, he's only a short period away from closing his doors... but he sure made a lot of money before they showed up.
40 years ago the small town I lived in had three lumber yards and a Coast to Coast hardware store. Coast to Coast went out first, driven out by a new Ben Franklin five and dime and a Gibson's warehouse. They both only lasted a few years because people could get better selections and lower prices driving to the major metro area 40 miles down the road. The lumber yards put each other out of business over the next 10 years or so and the town was circling the drain. Then Walmart came in and up popped the fast food chains, the specialty shops offering what Walmart didn't, and economic recovery. People no longer felt the need to drive 40 miles to the major city. Furthermore, with a Walmart, the town was figuratively on the map, so several small to midsize manufacturing businesses took advantage of the lower costs of real estate and labor compared to the large metro area and set up shop in the town. The local population was never going to support the local Five and Dime, Radio Shack, and greasy spoons to the extent they would thrive. And businesses were never going to locate themselves in an area that didn't have the services of a big box retailer. It took Walmart to save the town and make it a viable community.
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