Best Buy versus Amazon – and the Winner Is?

  • Posted on June 9, 2010
  • by Alan Blume

It all started in a seemingly unrelated manner; we needed to refinish our 23 year old living room floor. Time, children, parties, and our West Highland white terrier had taken their toll on the poor old floor; it was worn and tired, ready for rejuvenation. As with any project like this, there always seems to be unexpected collateral damage, though in this case, it was a surprising issue, revolving around a six year old Denon receiver that did not support the new HDI video connection necessary for Blu-ray DVD player, a recent birthday gift from my family.

So what does the Denon receiver have to do with floor sanding and a big box electronics store? To sand said floors, everything had to be removed from the room, with at least 1 million wires promptly disconnected from my old Denon receiver, my new Blu-ray DVD player, speakers, cable box, etc. With the mountain of components piled high in a corner, it seemed like a serendipitous opportunity to upgrade to a current HDMI receiver. Exit stage right to Best Buy, which is only 2 miles from my house. I assumed that within a matter of minutes, I could purchase a new, high tech, HDMI compatible receiver with extra bells and whistles to power my entertainment system as soon as the floor refinishing was completed a couple of days later.

Though I’m an ardent fan of technology, I’m somewhat of an audiophile amateur, so I did a little research online prior to arriving at Best Buy. I subsequently knew enough to be a little dangerous, preferring 7.1 to 5.1 and 4 HDMI inputs as opposed to 3, though I could be readily convinced to buy more (or less) based upon the suggestions of seemingly competent store personnel. As I strolled past isles of DVDs, iPods, and DVD players all neatly stacked on their tidy shelves, I came upon the audio section. There were many receivers on display, candidly I had no idea which to select. Enter stage left someone I’ll refer to as Brian, a polite, professional and seemingly knowledgeable electronics salesperson. I liked Brian, he was patient, and answered questions succinctly, asked relevant questions about my current system and then, offered his suggestion as to which unit to purchase. “This Denon receiver is on sale for only $450, marked down from $599, and has all the features you want, it’s a great choice.” His logic was compelling and his style was consultative.  This was an impressive sales presentation resulting in a rapid close. I simply retorted, “Sold”, and followed Brian to the sales desk as he went back to pull the receiver from inventory. A couple of minutes later her returned, “Sorry, but we’re out of stock. I can call another store and you can pick it up there (the nearest store was about 25 minutes away), or ship it to your house.” Both of these were reasonable suggestions, but for me, and I assume for many others, retail means immediate purchase gratification. Undeterred, I said, “How about one of the other units we looked at?” Brian scanned the display units, but the only “close” option which was in stock, was an open box item that looked pretty beat up, was missing the setup microphone, and the manual. There were low end receivers available, but I was looking for better performance and they had already been dismissed as viable alternatives in my initial discussion with Brian. Uncomfortable with the open box item, I thanked Brian (who did a very good job), and walked back to my car to ponder other options. With Circuit City gone, and no other viable retail options available to me, I drove home.

A few minutes later I was back at my PC and searching the web for more information on receivers. There were several online merchants, including Amazon, offering the same Denon as Best Buy, in stock, for about $75 less (including shipping). Several websites however, recommended a Pioneer receiver, which was only $25 more but purportedly delivered better sound quality.  Having purchased from Amazon before, I clicked the button, dropped the item in my “cart” and 48 hours later it was on my doorstep, the day after my floor project was completed and just in time to hook it up for the Celtics game.

As of this writing, Amazon’s market cap is $53 Billion while Best Buy is $16 Billion.  Over the last five years, Amazon is up about 250%, whereas Best Buy has been flat. Let’s give credit where credit is due, Best Buy has outmaneuvered many competitors including Circuit City, it’s just in an unfair fight. Massive brick and mortar infrastructure acts like a boat anchor, drowning even the most able competitors in a flawed business model. Fleet footed virtual companies, with dramatically reduced overhead, rapid shipping, large pools of inventory (or the ability to drop ship from other sources) and good customer service, appear to be winning the day. In this anecdotal incident, where this motivated buyer wanted purchase, tried to purchase, and needed to purchase, walking away empty handed was more of an omen than a symptom. The world is embracing virtual business in many ways; big box electronics retailers merely represent an obvious shift.

For more on the virtual paradigm shift, read Your Virtual Success (Career Press), already available at Amazon, three weeks ahead of the big box book stores which are also carrying it: http://www.amazon.com/Your-Virtual-Success-Finding-Profitability/dp/1601631014

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Mathworks Won’t Work Virtually?

  • Posted on March 16, 2010
  • by Alan Blume

Not far from my humble abode exists a large brick and mortar structure, home to a high tech company called The Mathworks. According to their web site, “The MathWorks is the leading developer and supplier of software for technical computing and Model-Based Design.” And they employ over 2,000 people. One would think a sophisticated high tech company like this would be a leader in virtual collaboration, actively promoting the need to telecommute, to reduce fuel consumption and wasted travel time. But it seems to be quite the opposite. Mathworks has a “water cooler philosophy”, meaning they seem to think it is necessary for people to gather around a water cooler or that they should be physically present in a conference room to yield improved collaboration and “flashes of genius”. Thus, they applied to the Town of Natick to dramatically expand their brick and mortar campus, against the vehement objections of abutting neighbors. But the development was readily approved by the Natick Planning Board, which allowed The Mathworks to essentially max out on parking, density, height and lot capacity. There was certainly lots of discussion in the Planning Board meetings about Mathworks’ real estate tax contributions, payroll tax contributions and community contributions. The expansion was so large; it was expected to increase road use by approximately 1500 vehicle trips per day. That’s a lot of traffic, a lot of gas and a lot of pollution. But there didn’t seem to be much discussion around the resulting pollution contribution.
In an era of rapidly increasing globalization and decreasing fuel reserves, in a time of dramatically improving and inexpensive web meeting solutions, in an age where Netfilx offered a $1 Million prize to anyone in the world to “create an automated system that predicts how users will rate a sample set of films 10 percent more accurately than Netflix’s in-house system does” (which was won by a small hybrid global collaborative team – “a coalition of four teams calling itself BellKor’s Pragmatic Chaos — made up of statisticians, machine learning experts and computer engineers from America, Austria, Canada and Israel.”)*, why do some companies still promote traditional commuting over telecommuting and brick and mortar infrastructure over virtual business? It seems counter intuitive, particularly for such a high tech company. Perhaps it is old fashioned thinking, perhaps it is a lack of trust, perhaps it simply revolves around the cliché about “teaching old dogs new tricks”. Whatever the reason, companies that don’t embrace a more virtual model are embracing a commuting centric, pollution oriented, urban sprawl world, no matter what their intentions or pretenses.

* http://www.wired.com/epicenter/2009/06/1-million-netflix-prize-so-close-they-can-taste-it/#ixzz0iL0bnMIl
* http://bits.blogs.nytimes.com/2009/06/26/and-the-winner-of-the-1-million-netflix-prize-probably-is/

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Posted in: business, eco-friendly, Entrepeneurship, green, Uncategorized, Virtual Business
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Virtual Business as Usual in Costa Rica

  • Posted on February 2, 2010
  • by Alan Blume

Sunny blue skies and ninety degree temperatures seem to be the routine here in Costa Rica. After a morning workout, and before our rain forest tour, I Skyped a few of my contractors. They will be running a web seminar for over 100 attendees in North America this afternoon, one of my sales agents submitted a proposal last night and copied me in on the ensuing email thread. Our appointment setters had a banner day yesterday on behalf of our clients, and we are preparing an extensive new prospect list on behalf of one of our longstanding clients. From time to time, I check in via email, Skype, GoToMeeting or via cell phone. Virtual business is here today, virtual business is here to stay, I’m living the virtual life – you need to go virtual too.

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You’re Too Old – or is it just your copyright

  • Posted on January 22, 2010
  • by Alan Blume

If you were a main street retailer, your window display might look a tad tired and dusty, it might seem overly familiar. The colors on your merchandise slightly faded from the afternoon sun. This would be an obvious sign of neglect, not caring very much about your clients or prospective clients. Your web site should be thought of in much the same way. Of course there is no afternoon sun and faded colors to contend with, but there is the problem of internet dust in the form of your copyright notice. Most web sites have a copyright notice on the bottom of their site, or somewhere else on their site. How old is yours? I’ve seen sites with copyrights that are 3, 5 and even 10 years old. When clients and prospects see this, they realize you’re not paying much attention to your internet front window. Perhaps they are wondering what else you are missing. It’s a small but important detail. Then again, if your copyright is three years old, when did you last update and refine your web site?

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Posted in: business, emerging business, Entrepeneurship, Home Office Business, Insurance Agency Marketing, Uncategorized, Virtual Business
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Partnering with your Virtual Clients

  • Posted on January 15, 2010
  • by Alan Blume

Not long ago, we signed on a new client in California. I try to think of clients as partners, and my service team tries to help them, responding to their requests immediately, which in a virtual business, means the moment they call or within a few minutes of their call. Conversely, as a partner, I have no hesitation asking, from time to time, if they can help us too. A case in point revolves around an insurance agency client who needed a fairly significant amount of help in running a web seminar. As usual, we helped them with their email list, handled all the registration, webinar infrastructure and moderation. But we also spent a significant amount of time coaching their speakers, and ran an extra couple of practice sessions for them without hesitation.

They closed a million dollar client from their well rehearsed web seminar, a prospect who had up until that time, been unwilling to meet with them. That’s an impressive story, one which would be better told by our client than ourselves. So we asked them if they would be a guest speaker at one of our prospective client web seminars – and they readily agreed. We’ve never met our client, face to face, and probably never will. Nonetheless, we feel the same level of gratitude and appreciation as we would if they were located down the street. Though we may often be a great physical distance from our clients, in some ways, we feel closer to them today than in our haphazard, travel laden, brick and mortar days. www.alanblume.com www.startupseling.com

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Posted in: business, emerging business, Entrepeneurship, Home Office Business, Insurance Agency Marketing, Uncategorized, Virtual Business
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BIG BUSINESS BOOKS vs. small business books

  • Posted on November 12, 2009
  • by Alan Blume

Having recently completed The Knack as noted in my prior post, I pondered why I enjoyed the book so much. I’ve read many books recently including: The World is Flat by Thomas Friedman, Tipping Point by Gladwell, The Business of America by John Steele Gordon, Freakonomics by Levitt and Dubnar, The Art of the Start by Guy Kawasaki, Small Giants by Bo Burlingham, The 4-Hour Work Week by Tim Ferriss, Blue Ocean Strategy by Kim and Mauborgne and From Good to Great by Jim Collins. I also read The Lost Symbol by Dan Brown (OK but not great) and City of Thieves by Benioff (Excellent!), but this post pertains to business books. I tend to place books I select to read into four categories: Small Business Books, Big Business Books, General Thought Provoking Books, and Fun Reads. Thus this list would look like this:

* General Business/Thought Provoking: Tipping Point, The World is Flat, The Business of America, Freakonomics
* Big Business: From Good to Great, Blue Ocean Strategy
* Small Business: The Knack, Small Giants, The Art of the Start, The 4-Hour Work Week
* Just for fun: City of Thieves, The Lost Symbol, Mayflower

Although I enjoy all of these categories, I derive the greatest business benefit from books like The Knack, Small Giants and The Art of the Start. These books apply directly to small businesses like mine. The Big Business books like those mentioned above seem geared toward large corporations and teams which are buried in the muck and mire of bureaucracy, far removed from my daily routine. So if you’re a small or emerging business, a would be entrepreneur or a home office based operation, read the The Knack or Small Giants, and you’ll gain some valuable small business insights – hold off on Blue Ocean Strategy or From Good to Great. And just for fun, pick up (or download) a copy of City of Thieves it’s a great read, particularly when contrasted with The 900 Days. www.alanblume.com for more on virtual business…

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The Knack or virtual knack to create a successful business

  • Posted on November 5, 2009
  • by Alan Blume

Do you have the knack to create a virtual business? If you’re thinking of starting up a virtual business, or have an emerging business that can benefit from the virtual model, I’d recommend you read The Knack: How Street-Smart Entrepreneurs Learn to Handle Whatever Comes Up by Norm Brodsky and Bo Burlingham. The Knack offers a common sense approach to entrepreneurship and truly embraces a clear understanding of the common pitfalls, erroneous impressions, and unrealistic perspectives that can often impede emerging businesses. In some regards this can be summed up as unjustified optimism that plagues most startups. The Knack addresses issues like cash flow planning, margins, expenses (and creeping expenses) and discounts in a simple and straightforward manner which should be of help to any small or emerging business.
Of course, if your business is virtual, or you apply my virtual model to your current business, you’ll inherently keep expenses low and improve efficiency. This improves the odds for almost any emerging or small business, though you still want to have the knack for keeping cash flow, margins, expenses and discounts in check. Check out The Knack – it’s a good read…

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Just because you build a web site, send out an emailing, or create a blog doesn’t mean anyone will pay attention. It reminds me of the old saying, “If a tree falls in the forest and no one is around to hear it does it make a sound?” On the internet, everyone is there to hear your message, but it may not make a sound they can or will hear. Thus it’s all about targeted marketing and messaging, bringing a message that rings true to your specific target market, so it will make a clear and compelling sound when it arrives. This is easy to say but harder to do. What we’ve seen at StartUpSelling, at least in the B2B space, is a combination of targeted outbound calling combined with eMarketing, web seminars and a current web site seems to do the trick nicely for essentially any industry. We call this multidimensional marketing and find there is an order of magnitude difference in using a blended approach to a singular approach.

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My 2 Cents about $20 A Gallon

  • Posted on October 13, 2009
  • by Alan Blume

Have you read $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better by Christopher Steiner? It’s a very interesting read as he predicts what the future will look like with rapidly rising oil prices. Like most predictive works, there are some things which seem plausible, and others that do not. His basic premise, the inevitable depletion of oil reserves and incremental rise in gas prices seems very likely. However, there are two key factors that are not truly addressed. First, the author presupposes that there will be no cost effective replacement for oil before gas hits $20 a Gallon, if ever. He argues that oil is so cheap, there is no alternative that could provide a cost effective replacement. I’m not ready to buy into that argument; I believe that a combination of greed and technology (is that contemporary capitalism?) can still provide a viable solution. Secondly, and more applicable to the theme of my blog and upcoming book (Your Virtual Success: Finding Profitability in an Online World) is the extremely positive impact of virtual business on energy consumption. Imagine the reduction in consumption if half of the current workforce worked from home instead of commuting to an office. The reduction in energy consumption would be staggering. Combined with solar, wind, hydro and emerging green technologies, and we could see a dramatic change in consumption. Will this happen overnight? No, but it certainly could happen before we see gas hit $20 a gallon.

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Posted in: business, eco-friendly, emerging business, Entrepeneurship, green, Home Office Business, Uncategorized, Virtual Business
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