Who Killed Radio Shack?

[EEVblog]

[sony mavica]

cool video dave

[zapta]

Very interesting. It's the first time hear this explanation of the ridiculously low shipping cost from China to the US due to UN regulations. If this is true than its a distorted market.

[rdl]

As someone that buys and sells on ebay, I was aware of the ridiculous difference in shipping costs between China and everyone else. I did not know about the different categories. That's just insane that China would be category 3. The USPS loses $1 on every package from China. What ?!? We need to withdraw from this UPU and let everybody pay the same price as residents at the border, or refuse delivery.

[Jeff_Birt]

I am for free trade! But free trade also has to mean fair trade. Who appointed the UN the gods of international postage rates? I had no clue about this. Some countries like China and Japan have also been really good at manipulating the currency market to artificially devalue their currency making their products cheaper to buy internationally. I don't like tariffs that are put in place to protect certain industries (like US domestic sugar production for example), I would be for tariffs against anything from countries that manipulate their currency to affect trade.

A related bit of governmental wisdom that keeps money out of domestic markets in the USA (and I'm sure the same idea applies in other countries), is huge taxes when a domestic company tries to transfer money earned by an international division to the USA. (Trying to stay business based here and not get too political) The taxes levied against this money are HUGE, so no company will just transfer the cash. I know someone who ran a company with factories in multiple countries including China. If he transferred cash to the USA the taxes were over 30%! He wanted to expand the plant in the US but due to the tax structure it made more sense to build the machinery partially in China and then sell them at a loss to the US factory where they could be finished to the proper spec. The upshot is that a company is penalized for transferring money earned abroad back to the domestic market. This is a boon to China, et al., but a real detriment to everyone else.

[Tandy]

It is a really big problem as typically the retailers are selling the same products produced by the same China factories but they have to pay shipping costs and tariff charges when importing stock, followed by relatively high local shipping costs.

The typical Chines seller avoids all that cost due to the subsidised postage prices, as well as having less regulation mens the cost of employing people to process the orders are much lower. Levelling the playing field on postage costs would help considerably.

[zapta]

Boo-Hoo, cry me a river. All these suits crying about unfair trade are the ones responsible for it. They moved all their manufacturing to China, stores buy their entire product from China now they cry because the consumer takes out the middleman and buys direct too. They were all ready to cash in on cheap labour and shipping just the regular peons weren’t supposed to.

Does this mean that you are OK with the asymmetric shipping cost?

[Brumby]

This situation is not news to me.  Australia Post suffers the same burden as USPS - and, I would hazard a guess, as does Royal Mail.

It has been that way for quite some years - but one must ask why China remains at the most favourable level.

Aside from the devastating effect this has on competition, the thing that really gets up my nose is that everybody is paying more for articles posted in Australia in order to help Australia Post cover the cost of subsidising China.

[rdl]

What I personally do when I want to buy cheap chinese crap, is look for a U.S. located seller of the same item and buy from them. It'll cost a couple of bucks more, but the fact that I get it in 2-3 days instead of weeks is worth it to me.

[JPortici]

we recently made an order of cable assemblies from china.
they actually outsourced the work... to a japanese company.

why didn't we order from the japanese company in the first place? because it was cheaper to do this way, also because of shipping rates

[Brumby]

These are corporation that ship product by the container full not a handful at a time. Oh and I bet their shipping crews are all cheap third world labour as well.

I'm not familiar with the Canadian scene, but I have a little exposure to the Australian one - and I ask you: "Have you imported much?"

[RGB255_0_0]

The only advantage to buying within your country is usually shipping time. The UK is small: most post can arrive in 1-2 days. Some items even arrive same day. For many items, even if shipping cost was adjusted, the item would still be cheaper.

Places like Radio Shack, Tandy, Maplin etc had HUGE mark ups and for a long time exploited that fact and then when China started selling direct they started moaning like crybabies.

[dannyf]

It's the first time hear this explanation of the ridiculously low shipping cost from China to the US due to UN regulations.

that cannot be true. our dear forum experts have confirmed the universal truth: the chinese government subsidized their export shipping to benefit those who buy electronic junk from china.

now you are saying that the UN made them do it? or our governments made UN made them do it? I'm shocked, absolutely shocked!



Really, the guy is pretty myopic, if you ask me.

1) on upu: soverign governments can elect not to sign those treaties. So if you want to blame for "unfairly low" shipping rates, you should blame your own governments, or your postal services to sign those treaties for self-inflicted wounds. maybe next time they can publish the treaties for public comments BEFORE signing them (hint to the most transparent administration in history, TPP. or ACA for that matter).
2) on radioshack's death as a surprise: it was only a surprise to the super ignorant. it is plainly obvious that they were dying, to even the causally observant. In the business world, it was widely expected.
3) on the cause of radioshack's death: the world shifted from right underneath those guys. the hobbyist market isn't sustainable in today's world. electronics are getting cheaper, and designed to be mass produced, and shipped globally. the internet / ecommerce is just the last straw that broke the base of the camel called radioshack.

its moronic management didn't help either.

for the society at large, radioshack's death is a progress in the right direction: that's how our recycle capital, from the least / less efficient ones to the most / more efficient ones.

without death like radioshack's, you don't get birth of something better and newer.

[NottheDan]

Most favourable level is 5 (for least-developed countries). China is at level 3, basically the one all those countries that don't fit in any of the others fall in.

[Kalvin]

It was less than 10 years ago when the USPS was heavily subsidized and the shipping rate of the surface mail from the US to Europe were pretty low - even cheap some would say. The other US shipping service providers like Fedex or UPS couldn't compete with the USPS due to the heavy subsidising. Still, even today the USPS gets $18 billion each year from the federal govt: http://fortune.com/2015/03/27/us-postal-service/
Yes, Chinese sellers are heavily subsidized today and people are buying stuff from the Chinese sellers due to cheap prices and free/cheap shipping. Did this kill Radio Shack, I do not know.

[zapta]

Boo-Hoo, cry me a river. All these suits crying about unfair trade are the ones responsible for it. They moved all their manufacturing to China, stores buy their entire product from China now they cry because the consumer takes out the middleman and buys direct too. They were all ready to cash in on cheap labour and shipping just the regular peons weren’t supposed to.

Does this mean that you are OK with the asymmetric shipping cost?

Who loses if that were to change and who benifits? Do you think if that were to change these companies who are whining would all of a sudden hire more employees or even pass the savings on to the consumer? They won't, they will pocket the extra cash and give all their corporate execs an addtional bonus for a sucsesful media campaign to sway the peons. The same assholes complainning about this now are the ones who put all the bits in play to have it happen. They want their cake and eat it too, fuck-em.

You dodged my question.  Are you OK with the asymmetric shipping cost?

[zapta]

Most favourable level is 5 (for least-developed countries). China is at level 3,...

Let me guess, at level 5 you get paid to send mail.  ;-)

The issues of inexpensive shipping from China came here a few times but the general assumption was that this is due to there low labour cost and the fact that the sending side determines the cost. The fact (if it is true) that this is actually based on a discriminative regulation by a UN agency is new to me. That's a completly different story.

[Muxr]

I ship small items all over the world. Being based in US depending on the destination country the shipping costs are ridiculous and sometimes cost as much as the item I am selling (and this is the cheapest option using USPS).  I actually even subsidize the shipping cost by taking less profit on those since I charge a $10 flat international shipping, and I've had cases where I had to pay $15 or more.

Very different to what Chinese sellers on Ebay have to pay. I've seen items as cheap as $5 with free shipping. Which is unbelievable.

[Kalvin]

I would also claim that there has been quite a big change in the field of electronics as a hobby. Yes, today's beginner hobby builder can buy through-hole components or kits and build some electronic gadgets presented in the few remaining hobby magazines. However, most of the exiting projects are based on microcontrollers, and the information is available on the internet for free. You can buy those microcontrollers as a modules, like Arduino or mbed. Those modules are really inexpensive. Stocking the standard logic gates, 741's and 2N3904's is not profitable any more - and nobody is really using 741's any more so you should stock quite a lot different op amps. Building stuff using the logic gates and discrete components is not considered useful as you can get much improved performance and lots of extra features in a smaller size when implementing the project using microcontroller. Changing the functionality of the project device is pretty easy - just reprogram the microcontroller. Yes, you still need some glue components, but not as much as before. Also, programming computers and stuff a like has driven people away from the electronics as a hobby. So, there may be much more in killing the Radio Shack than just the Chinese postal fees.

[nctnico]

Boo-Hoo, cry me a river. All these suits crying about unfair trade are the ones responsible for it. They moved all their manufacturing to China, stores buy their entire product from China now they cry because the consumer takes out the middleman and buys direct too. They were all ready to cash in on cheap labour and shipping just the regular peons weren’t supposed to.

[rdl]

I think Radio Shack was only used as an example to illustrate the main point, which was the ridiculous an unfair imbalance in postal delivery cost between Chinese and U.S. based mailers.

Probably if China had to pay the same postage as U.S. residents do currently, charges for domestic mailings could be drastically reduced or even eliminated. I would consider that a "benefit". Not likely that would ever happen though.

[AntiProtonBoy]

What I personally do when I want to buy cheap chinese crap, is look for a U.S. located seller of the same item and buy from them. It'll cost a couple of bucks more, but the fact that I get it in 2-3 days instead of weeks is worth it to me.

Yeah especially if you are in a situation where time == money. Sometimes saved time is more economical than the actual price difference.

[nctnico]

I think Radio Shack was only used as an example to illustrate the main point, which was the ridiculous an unfair imbalance in postal delivery cost between Chinese and U.S. based mailers.

Probably if China had to pay the same postage as U.S. residents do currently, charges for domestic mailings could be drastically reduced or even eliminated. I would consider that a "benefit". Not likely that would ever happen though.

There are 2 flaws in that assumption:
1) everyone wants to wait 4 weeks for an item to arrive
2) every shipment is below the import tax threshold

IMHO the presenter picked two items which where cheaper from RS than China but I'm pretty sure these are exceptions. When I look around in the Netherlands at online shops selling tools I notice that they charge at least twice the amount of money for an item compared to buying it from China directly.

If RS was indeed cheaper then what probably killed them is was trying to compete on price instead of convenience and service.

[rdl]

I think anybody who has done these two things probably understood what the main point was.

1. Bought something from China thru ebay for $1.99 or less with "free shipping".
2. Personally mailed small package across town.

Radio Shack really has little to do with it.

[vodka]

I think that the video is tendentious and manipulator.  I see that the USA have fear  the  lost their  world hegemony and they need to demonize their rivals China and Russia
Now they begin to slander ,sooner they will return to a Monroe Doctrine(*).

* The file named "carta" is an example  of the Monroe Doctrine by the Apple case