Patchwork Pig

In for a Penny

With big names such as Toys R US, Maplin and Poundworld disappearing from the high street this year alone there are burning questions that have still not been answered – Why and when will it end?

Internet sales are certainly taking most of the blame, the main culprits being the likes of Amazon and ebay however the focus should be on those that are feeding these platforms, the suppliers.

Like ebay, Amazon is made up of 1,000’s of independent traders most of whom are online only traders with no premises. You can have an account open and live within minutes and it’s no surprise that many of jumping on the bandwagon, each one knocking the nail that little bit further into the high street casket. There is increasing attention on “companies” who are only selling through these online platforms and as a result some supply is restricted however in reality most suppliers don’t give a damn and simply see it as a cash cow.

As a supplier you can never stop your products flooding onto the likes of ebay but you can police it and to be fair some do, but why would you? You are selling more volume at the same price than you are to the independents, it’s an easy win! So why are some suppliers starting to play big brother?

Those that are clamping down are manufacturers. As a manufacturer it is critical to keep the value of products as stable as possible to avoid them hitting the clearance bins and stock value falling off a cliff edge. Take Apple for example who only sell through very narrow channels and as a result retain their product value. The ironic thing about ebay is that’s it’s actually becoming Dutch auction and whilst it known that you bid up for items its sellers are actually constantly lowering their prices to stay ahead of the competition. This is great for the consumer but the end result is that the sellers disappear, product value deteriorates and the high street rot accelerates.

An interesting stat is that only 2% of online visitors actually go through with a purchase with the top 10% of websites only converting at 11% and so a huge number of visitors are required before you can begin turning over high numbers. Some of the ebay sellers we meet are making pennies after costs and rely on volume to hit targets.

So, when will the demise of the high street end?

With the fast growth of the digital platforms, no time soon, however things could revert very quickly when the first signs start to appear. More action is need from suppliers, afterall you can’t blame anybody for wanting to make a few quid just like you cannot blame anybody for saving a few quid so where does the blame lay?

 

Until next time…

Dan