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Digital disruption in the UK wholesale space

“Twenty years ago I was driving boxes to the post office in my Chevy Blazer and dreaming of a forklift,” says Jeff Bezos in his most recent letter to shareholders. A blink later and he points out that the company has grown from 30,000 employees in 2010 to 230,000 now. But his ambition is the same. “We want to be a large company that’s also an invention machine. We want to combine the extraordinary customer-serving capabilities that are enabled by size with the speed of movement, nimbleness and risk-acceptance mentality that is normally associated with entrepreneurial start-ups.” Amazon is great at disruption because of its customers focus and the fact that the internet means it needs none (or very few) people between its warehouses and the shopper. The threat of Prime, its membership service, is the biggest challenge facing the UK retail market and the wholesale market by extension. It is both a direct threat and an indirect threat in that is inspiring countless numbers of othe...
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Customer taxation and the Amazon business model

Ben Thompson's Stratechery site is a constant source of inspiration. Last week he was tackling the development of Amazon and speculating that it could sell lots of products at a loss by adopting a Costco model. "Consider Costco: last year the wholesale retailer had net income of $2.3 billion on sales of $114 billion to its over 81 million members; the total sum of membership fees was $2.5 billion," he wrote. "In other words, Costco’s 11% gross margin didn’t even quite cover the cost of running the business; the difference, along with all of the profit, came from a “tax” levied on Costco customers." For retailers in the UK unhappy with paying a "tax" to news wholesalers to get their newspapers and magazines, this makes uncomfortable reading. The UK's regulators, now the competition commission, have gamed the system so two companies can make a profit out of "carriage service charges" for wholesaling newspapers and magazines in exclu...
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Unlock your inner poet and be more successful

Poetry grabs life by the throat, David Adams says near the start of Well Versed , his collection of interconnected essays on the things that modern businesspeople should pay attention to in order to be successful. He borrows the phrase from Robert Frost in part explanation for his journey from accountant to stockbroker to chief executive to business coach. Unlike most business books that sell a single idea or success story, the strength of Adams’ book is its refusal to tell you what to do. “Alice in Through the Looking Glass …reaches a crossroads and doesn’t know which way to go. Looking up she sees the Cheshire Cat grinning. ‘Please sir which way should I go?’ ‘Where do you want to get to?’ asks the cat. ‘I don’t really mind,’ says Alice. ‘Well then it doesn’t really matter which way you go.’ How many businesses and particularly business meetings are conducted with the same ethos?” Adams challenges. Without clear and unequivocal goals businesses will never achieve either what ...
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If you want to know How To Sell in retail this book is for you

“To really excite and delight customers there has to be something unique and special about what you deliver,” writes John Hoerner at the end of How To Sell: Recipes For Retail , his brilliant book on everything he has learned in a stellar 50 year retail career. Put this book on your Christmas list. Hired from the US in 1987 to run Debenhams Hoerner was so successful he ended up running the Arcadia group until he retired in 2000. A year later Tesco recruited him to develop its clothing business. This book is organised as a series of recipes for success. He argues that his lessons will work for any retail business and I think he is correct. While convenience stores are not in the business of markdowns or as exposed to not buying the latest fashion must-haves, they still have to get the basics right and then find the magic ingredient that makes their shop special. “When you get it right for customers, almost EVERYTHING ELSE works…when you don’t get it right for customers, almost N...
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Find customers who believe what you believe

Start With Why is a TED talk by Simon Sinek that has been watched more than 24.8 million times. Plus a further 701,000 views on YouTube. It takes 18 minutes to watch and is inspiring. There is also the book , advertised as a global bestseller. It will take you four to six hours to read and I recommend that you take longer than this. While the talk is brilliant and the book seems to say not much more across its 200 pages, the benefit of spending time with Sinek’s ideas comes from challenging how well you can answer the question: “Well why should I do business with you?” The first part of the book is all about business as usual. The manipulations that companies use to keep customers - price, promotions, fear, aspirations, peer pressure, and novelty (a.k.a. innovation) - are all entertainingly eviscerated. “Price always costs something. The question is, how much are you willing to pay for the money you make?” Sinek prompts. Manipulations are perfectly valid strategy for drivin...
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Sunday trading consultation: fair or fixed? You decide.

My local council, South Oxfordshire, asked me to complete a survey on Sunday trading as a local resident. The deadline is next week. The first question was about the current arrangements and what I thought. There were five options: large shops shouldn’t open six hours is already too long current restrictions are about right large shops should be allowed open for longer no restrictions. My answer was the current restrictions are about right. The next question was about what would happen if the council allowed large stores to open for longer. The menu included 10 options and a space for other. The options were that it would: encourage me to shop more in my local town give me more flexibility impact on my religious or cultural beliefs have a positive impact on my business have a negative impact on my business increase footfall to my business reduce footfall to my business provide more employment opportunities open to me in the local area mean that I need to...
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