By Greg Gerber
Editor, RV Daily Report
Minder Research, the company that developed TireMinder tire pressure monitoring systems, deserves hearty applause today for taking a stance against retail giants Amazon and Walmart — and RV dealers should be delivering a standing ovation.
Yesterday, the company issued a “do not ship” directive to its wholesale distributors to block further shipments of its product to Amazon and Walmart. Why? Because a computerized pricing battle had dropped the price of TireMinder products to a level that even wholesale distributors couldn’t match.
Walmart’s computers and Amazon’s computers were locked in an epic struggle of price matching to the point both companies were willing to lose money in order to claim the lowest price. When stupid companies have nothing else to offer customers, they can always compete on price.
It’s the age old philosophy that a company may loose a little on every sale, but it will make it up on volume. Which, when you think about it, is how once-healthy companies wind up bankrupt.
“See,” they tell the bankruptcy judge, “we delivered on our promise that nobody would ever sell a product for a lower price than we would.”
For too long, online retailers have undersold brick-and-mortar stores on almost every product they sell. More retail stores have closed in America since January than closed in all of 2016, and we have seven months left to go. Nine U.S. retail chains have filed for bankruptcy and 90,000 people have already lost their jobs. You can read about that at National Public Radio.
But, when companies like Amazon deliberately sell products at prices lower than they can buy them at wholesale, just to drive a stake into the heart of a competitor, then no retailers are safe.
Not even Emperor Marcus Eralius Augustus Tiberious Lemonis, the part-time CEO of Camping World and full-time star of his reality TV show, The Profit, could compete. Although he has been known to adopt the same predatory pricing strategy against targeted dealers in certain markets, not even The Profit can compete against the Amazon death star.
Last year, Amazon clawed in $137 billion in revenue and dropped $2.37 billion to the bottom line — a profit of 1.7 percent. Walmart, on the other hand, raked in $485 billion in sales and dropped $13.6 billion to the bottom line — a profit of 2.8 percent.
The financials currently show Walmart is the bigger company. But, its revenue has grown just $9 billion since 2014. During the same period, Amazon’s revenue grew $46 billion.
Because Amazon has no retail stores, it brings in $398,322 in revenue per employee, while Walmart manages $210,932. Which company is more efficient?
You can verify all these numbers at Market Watch. Just look up the profile and financials for Walmart (WMT) and Amazon (AMZN).
Unless more companies like TireMinder work to reign in these monopolies, the future is very bleak for retailers. How bleak? Imagine your closest shopping mall transformed into an Amazon warehouse stocking everything from groceries to clothing to electronics to auto parts to appliances — you name it.
All other retail outlets in the city are forced to close because they can’t operate at a bottom line margin of 1.7 percent while Amazon uses robots to handle products and delivers whatever people need directly to their homes in an hour. Impossible? Amazon has already rolled out its Prime NOW program to 30 metropolitan cities offering free delivery in less than two hours.
Minder Research did the right thing in suspending shipments to these profit-busting monopolies.
The weakest link in the company’s stand-up-to-idiots strategy now lies in wholesale distributors honoring the request. Are those firms willing to sell out their dealer customers in order to deliver a product at a loss to Walmart or Amazon in hopes of making it up in volume?