Thursday, May 19, 2005
On The Road
Amazing what you learn on the road.
Anybody want to guess what the single biggest selling item for Interline Brands, a large distributor of over 45,000 different maintenance, repair and remodeling products for the apartment and institutional markets, happens to be?
That's right. In a 300,000 square foot warehouse on the outskirts of Nashville, Tennessee stands a two-story high stack of them near the loading dock, ready for quick turnaround to all parts of the country.
The reason being that by law toilet seats have to be changed when apartments are remodeled.
Otherwise, the most interesting observations after two days of visiting companies and stores in that part of the country are these:
Best Buy stores seem awfully big, now that the contents of the entire middle of the store--music, movies and software--are being electronically distributed. The only parts of the store that look like Best Buy stores used to look like--i.e. crowded--were the satellite radio, iPod, and digital tv sections. Now I understand why the company wants to open smaller stores.
Speaking of satellite radio, I learned that Sirius requires new users to sign a one-year contract, with a $75 cancellation penalty. XM does not, although it offers a one-year plan if the customer wants it. I am wondering if this helps Sirius boost its revenue recognition. In any event, XM outsells Sirius 3 or 4 to 1.
Finally, those new Pep Boy stores, with all their newly merchandised scooters and race-cars sitting around gathering dust, look like an inventory write-off waiting to happen.
I Am Not Making This Up
P.S. Tomorrow I will sum up the Overstock.com question and answer session--both the one our readers would like to have with Patrick Byrne, as well as the real thing that took place earlier this week in San Francisco. Those of you hoping to hear some tough questions for Doctor Byrne from the J.P. Morgan guests...well, don't hold your breath.
Posted by Jeff Matthews at 8:29 AM