1. Hi Subra

    You miscalculated the net profit; it should be Rs. 54,000 :p

    Anyways, I’ve found that good retail shops supporting the whole family do make a sales of more than Rs. 300,000. Yes, book retail shops have been visibly suffering since online shopping began, but I think it has also got to do with the reading habits of us Indians, if we have any left.

  2. But this is a problem in all the shops & most of the business is it not,
    The small guy is getting squeezed out of business because it makes more sense to either sell & live on the interest or rent the shop to some other unfortunate poor soul or rent to the Great big corporations for whom this is only an overhead……

  3. Hi Subra,

    Local Retail stores operate on higher margin compared to online sales. Operating cost is also less. Online sales need more volume to achieve reasonable margin, although margins cannot meet local retail stores.

    Only common thing is that both focus on individual Contribution margins across different categories.

    Cheers

    Atul

  4. I know of 1 small shop in South Mumbai almost on verge of bankruptcy. The Senior owner (father) won’t let the shop die. Junior (son) wanted to sell it off. One day the senior departs from the world and Junior sells that shop for coool 3.5 crores. Junior has now retired from all sort of works just based on interest this money is fetching him. 🙂

  5. @siddhant.
    whats with the ‘small guy is getting squeezed’ narrative?
    the small guy simply is not serving his customers anymore effectively.that is why the customers have left him.
    nobody is owed a livelihood by his customers.

  6. Hi Jayant,

    Small retailers and in this case book shops need to work out their strategy to remain competitive. For example, Amazon is on the verge of killing all local retail shops. One of the US retailer Borders found tough to compete with Amazon and decided to use Amazon platform to sell its books in return for commission. Borders could have setup its own Ecommerce/Ebusiness platform but may be CB analyis suggested otherwise.

    Another example is traditional bookstore in UK known as waterstones.

    I think either retail shop keepers have not kept with reality OR still feel immunity from competition.

    Atul

  7. pravin and Atul,

    the Indian retail businessman is far far far smarter than all the management consultants. They are nimble footed also. One retailer I know moves to a locality when there is no shop in the vicinity and sells everything. Vegetables, et al. Then the place gets crowded..Big Bazaar is set up..he knows margin will vanish, he sells his SHOP at 4x the price, and moves to his next LOCATION. Most of them know. They do not ask for a livelihood from the govt. – only the educated class beg. These guys know when to cut losses and run. Clients need them just as much as they need clients. No favors here.

  8. Subra: I will remember this SLAP for life- “Only the educated class beg”!!!! worth it to shake my conscience.

    Thank you..:)

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