Forum Archive Index - June 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Hi RIL,

The reason why I did not put in the article from today's Herald was that
ShareChat already reported the Flying Pig news story in a news link
yesterday (IDG ran the story) - The Herald was a bit behind on this one.

I'd also like to comment on one of your points:

> It is also human nature to hope for a commercial nirvana and such has
> been the experience with the internet.
You are right.  Internet retailing has been overhyped by the media, both
here and overseas.  First, we heard how Amazon.com and its imitators were
going to make a trip to the corner store redundant.  Then, as many poorly
run, badly executed Internet retailers sprang up from nowhere, hit the
markets for funding and burned through all their cash, we heard (and are
still hearing) how Internet retailing (or B2C) was dead and how all the
e-tailers are doomed.

No, Internet retailing will not provide a commercial nirvana for consumers -
let's cut through the hype and examine the facts -

1)  Internet retailing is here to stay (and no, "The future of Internet
retailing in New Zealand is under a cloud" as said in the Herald article
this morning is not the case).  Some people like it and find it convenient
(myself) and some people dislike it, and would rather go to a bricks and
mortar store (RIL).

2)  B2C is like any other business with a storefront.  If an Internet
retailer is badly run, selling products that no-one wants, poorly executed,
cutting margins down to nothing (the list goes on) the business will fail -
just the same as a business in your nearest shopping mall will fail if it
has the aforementioned problems.  It's as simple as that.

3)  The B2C model does work.  The most successful B2C models are small
entrepreneurs that run an owner-operator operation that cater to a niche
market.  There aren't big warehouses, distribution chains, supply
arrangements etc.  Just someone sitting in their room, selling a product
that people, wherever they may be in the world, can buy.  And yes, I do
think that Amazon.com and FlyingPig.co.nz will both be profitable.  But
building any business up from scratch in a short amount of time is going to
cost money.  If the business plan is executed in a proper fashion, then it
will succeed.

Remember Boo.com?  The Economist hit the nail on the head when they said
(off the top of my head) "Boo.com died as it was created - ridiculously
overhyped".  Read the articles about Boo.com.  Any bricks and mortar
retailer would have lasted exactly as long as Boo.com did if they'd run
their business in such a fashion.

Flyingpig.co.nz have made a good call by tightening their business.  Layoffs
happen in the real world and Internet world.  When a bricks and mortar
clothing chain closes down or lays off staff, do we think that the future of
clothing retail in New Zealand is "under a cloud"?

Of course not.

Best Regards,

Benjamin Dutton

----- Original Message -----
From: ril <ril99_99@yahoo.co.uk>
To: <sharechat@sharechat.co.nz>
Sent: Friday, June 23, 2000 11:18 AM
Subject: [sharechat] Flying Piggy


> The lead article in the Irish tabloid, The Herald, is missing from the
> front page of Sharechat for some reason today: the changes at Flying
> Pig.
>
> The profitability or otherwise of these internet companies is of a great
> deal of interest to me at the moment and I would like to make some
> comments.
>
> A while ago someone emailed me a breakdown (from either the Dom, Sunday
> Times or the Irish paper), on the comparatives for book purchases made
> on the internet for residents of NZ. Unsurprisingly, the cheapest net
> option was Flying Pig; as its warehouse is domiciled here and avoids
> international freight on a per item basis.
>
> However, the price at which it delivered was no cheaper than Whitcoulls
> on average.
>
> Today it announced it is laying off half its workforce. $4 million
> burned to date and the owner commenting that long term he thought that
> book sales would eventually work but sales of few other products would.
>
> Now, speaking personally when I buy a book I like to go to a shop and
> browse and would only buy on the net for a rare title. Ditto for music.
>
> For travel purchases I would rather go to an agent and chat about
> options and personal experiences and get ideas.
>
> What the internet doesn't deliver is what makes us human. Contact. Not
> contact through a computer but face to face. When people purchase face
> to face there are also subtleties. The attention one receives when
> handing over ones money for example. The wrapping of the good. The
> people around. The sitting in a cafe afterwards flicking through the
> purchase.
>
> I also feel that the above issues apply doubly to perfume and beauty
> products.
>
> It is also human nature to hope for a commercial nirvana and such has
> been the experience with the internet.
>
> Personally, it leaves me cold.
>
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