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The Rise of Internet Retail Entrepreneurs

 5 min read / 

Through websites such as Amazon, eBay and Alibaba, a new band of budding entrepreneurs has arisen. Retail has shifted somewhat in the last ten years, particularly after the financial crisis. The internet has gone from underdog to big guns when it comes to retail.The high street has gone from trying to adapt to having to provide something more than the internet can; through

The high street has gone from trying to adapt to having to provide something more than the internet can through specialisation, discount, and customer service. And yet, the internet still wins on some of those points too.

With this adaptation, the rise of charity shops and the expansion of second-hand retailers such as CeX and Game became one of the solutions. Towards the start of this, charity shops were keen to just sell what they had and to sell everything of a product category (such as video games) for one across-the-board price.

A survey in 2008 produced the following data:

table

The number of charity shops has risen to roughly 10,500 in 2016, a report claims.

The New Wave of Internet Retail

This led to a new wave of internet retail entrepreneurs. People, especially with the aid of smartphones, were able to use their phones to scan the barcodes of items (video games, DVDs, CDs and books) to see if it was economically viable to buy them and sell them on marketplaces (eBay and Amazon).

Another approach by entrepreneurs has been to buy items in bulk (clothes, toys, teddy bears, etc) and sell them on eBay; either as the whole package or divided into smaller lots.

As trade-in companies such as Momox and MusicMagpie were purchasing a lot of unwanted items leading up to the financial crisis, and especially immediately after, they began selling on Amazon too. Whilst the entrepreneurs were able to make a ‘quick buck’ on the charity shops, the trade-in companies started pricing their items competitively, making sure they were always the cheapest seller.

This led to entrepreneurs either using FBA (fulfilment by Amazon) or specifically targeting items that were in less circulation and thus had higher prices as the trade-in companies didn’t have them in stock.

In recent years, whilst these entrepreneurs continue to sell high-end, high-priced items from charity shops, those stores have adapted to this activity, raising their prices to try to stem this activity from occurring as they try to maximise ‘profits’ too (profits in the sense of the money that goes towards their core activity).

Adapt to Succeed

Some of these entrepreneurs have branched off and have started selling products that trade-in companies don’t sell and many vendors aren’t selling, such as phone cases, sporting goods and watches, from Alibaba. A method called drop shipping is a way for entrepreneurs to test the market.

Should the venture prove successful, these entrepreneurs can start buying in bulk and using Amazon’s FBA to save on storage. Amazon then ships it like their own products and deals with the customer service too. This comes at a cost. The entrepreneurs, instead of paying a commission like when they themselves post the items, have to pay a different form of commission.

This commission is based upon the amount of warehouse space the individual item takes up and for the amount of time that it’s in Amazon’s warehouse. So a DVD that sells within one month would be charged less than a portable DVD player that takes six months to sell. Of course, this is factored in by entrepreneurs as they make decisions about their business model.

Rising Revenues

The benefit, apart from Amazon treating the items as their own, is that Amazon has a partnership with UPS; so postage and packaging is much less than if the entrepreneurs were to send it themselves. FBA has grown vastly, from revenue of $3.412bn in 2010 to $27.738bn in 2015. Data from their accounts have been collated in a graph below:

image001

(Source: FBA)

With this increase in activity due to internet entrepreneurs, eBay, Amazon and Alibaba have seen a great increase over the last ten years of commissions made by merchant activities. Connecting buyers with sellers seems to be quite a popular economic activity at the moment, and to some extent, it has entrepreneurs paying some of Amazon’s operational costs for them through the FBA process.

Charity shops have benefited greatly from this activity too as it is clearing a substantial portion of their stock without the hassle of selling online. And postal companies, in a time when letters are on the decrease, have benefitted from the rise of parcel deliveries. A report published by Royal Mail in 2013 demonstrated this growth:

15.7% Growth in Parcel deliveries in Q4 2015

“UK parcel volumes grew by 4.3% p.a. from 2005 to 2008 and by 3.7% p.a. from 2008-2013, mainly reflecting an increasing use of online shopping by consumers.”

Online Christmas sales helped boost parcel deliveries by 15.7% in the last quarter of 2015 compared to the same time the previous year, according to this report. Although, parcel volumes do spike leading up to Christmas due to Christmas trading, but this increase year-on-year demonstrates the growing demand that these entrepreneurs are taking advantage of.

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Companies

Uber Eats to Offer Europe Couriers Insurance

 1 min read / 

Uber Eats insurance

Uber has announced that it will be offering a free insurance package to its food couriers in nine European countries.

The company has teamed with AXA Corporate Solutions for the insurance product, which will be introduced from January 8 next year. It will cover personal accidents, cash benefits for hospitalisation, property damage and cover for third-party liability of up to a maximum of $1m. Uber eats operates in Austria, Belgium, Poland, Italy, the Netherlands, Portugal, Spain, Sweden and the UK.

If a driver is involved in an accident, they will simply need to fill in an online claim form available on the Uber Eats app.

Previously, both Uber Eats and Deliveroo have come under scrutiny over how workers are treated. In the UK, Deliveroo riders went to court to seek employment rights, including the minimum wage. The UK government has looked at whether the employment law needs to be changed to take account of modern working practices, such as the gig economy.

Keep reading |  1 min read

Companies

Google News: The Secret War Against Net Neutrality

 5 min read / 

Google Net Neutrality

Anyone watching Google News can see that mainstream news outlets are a monoculture, with 100 different outlets reporting essentially the same “big” story. That is, whatever is the top scandal of the day. With click-bait headlines the norm, mainstream news and fake news look indistinguishable. Readers struggle to tell the difference. It’s all negativity and shouting. That’s changing our culture, and not in a good way.

Google News is making the news monoculture worse by blocking independent news publishers seeking to join Google News. There’s an almost insurmountable headwind for new publishers who haven’t been “grandfathered in” to Google News. Google urges us to take action to support net neutrality while at the same time defeating net neutrality by giving favoured nations treatment to big business news organizations at Google News. Why is that a real problem? Let’s talk about what happened to news in Spain.

The Case in Spain

Spain’s repressive Google tax, and consequent Google News blackout, crippled independent news there. When that happened at the time, Google may have thought, serves Spain right for passing a stupid law. However, the suppression of independent news in Spain has had consequences. The Spanish news blackout by Google News played into the hands of the Spanish government seizing mainstream media, reducing mainstream news to official propaganda.

In its early days, Google News was a tremendous democratic influence for good. Smaller news sites you wouldn’t otherwise know about could get to the top of Google News based on merit. A colleague once wrote a story about a TV movie premiere starring Jennifer Love Hewitt. There was surprisingly big interest in this story. It was the only story that quoted Hewitt talking about her film. That story went to the top of the entertainment section of Google News on a Sunday morning and stayed at the top all day. It drove tremendous amounts of traffic to the news site that published it. They took a lesson from it.

Their success with that story on Google News changed their editorial mandate. The new marching orders? Find more stories that we can uniquely cover that will put us at the top of Google News. What Google had done, intentionally or not, was support diversity and make journalism better. For years that publication ranked on the front page of Google News almost daily. They survived on that traffic. It doesn’t work that way anymore. It isn’t how good you are. It’s how big you are that gets you into the Google News club today.

Difficulty for Small Publishers

In fairness to Google News, this publication, The Market Mogul, is carried by them, so clearly it’s not impossible for a new publisher to gain access. However, given their loud support of net neutrality, why doesn’t Google News have a program that nurtures net neutrality on their own platform? Why not help small publishers, rather than making it more difficult for them to launch and sustain themselves?

Maybe Google simply hasn’t thought about the consequences of not helping small publishers. After all, it can be more work to deal with them. They may have more questions to answer than establishment outlets. However, big mainstream publishers aren’t actually subject to the official rules. Google News isn’t about to drop the New York Times or Washington Post if they make a web template change that moves the author byline down a line or another superficial change that might confuse Google crawler robots.

A small publisher, however, is expected to play 100% by Google’s rules. A long-time Google News forum advisor talks about how things have changed at Google News:

In simple terms, the Google News guidelines have tightened up over time.  I joke that the NYTimes might not be accepted these days.  Yes, that tight.  So your goal is not to generate a marginally passable website that might get accepted into Google News, but one that is so wonderful that Google will drop all of your perceived competitors to find room for you.

Maturity.  If the site doesn’t have 6 months of strong journalism history to review, don’t bother applying.  Maybe 1 year in some niches.  And don’t be surprised to be rejected as 99% of all sites that apply will be rejected.  Think of this as a challenge and go forth and make the best possible news site in your niche.

Why should better journalism mean dropping a perceived competitor? Has the Internet run out of space?

If the above observation is correct, and it is judging from what small publishers have told me and the general feedback on the Google News forum, then Google News has changed. No longer a news democracy with room for every legitimate news publisher no matter what size, Google News has morphed into a walled garden that embraces big business. It’s the opposite of net neutrality. Google News has become a censor promoting the establishment viewpoint. Think that’s bad? It gets worse.

What billionaires think, is the establishment viewpoint. Billionaires control the mainstream press. Google News is boosting the 1%. Whether that’s Jeff Bezos, owner of the Washington Post, which continues to provide outstanding journalism, or Rupert Murdoch, owner and head of Fox News, which does not. Warren Buffet owns 31 news dailies and 50 weeklies. In the UK, five billionaires, Rupert Murdoch, Jonathon Harmsworth, Richard Desmond and the Barclay twins own 80% of the newspapers, plus TV stations, press agencies, book companies, and cinemas. None of the top UK billionaire press owners actually live in England.

Conclusion

A handful of billionaires, many tax avoiders living mostly beyond the law by bending it to their wills, has become our society’s thought overlords through their control of the press. And Google is helping them do it. Why has Google become a gatekeeper to enforce a news mono-culture? Will Google reconsider, stop suppressing small publishers and demanding they be “better” than the New York Times before allowing them a voice?

What society needs is news net neutrality.

Keep reading |  5 min read

Americas

Bulletproof Clothing: How US Fashion Is Going Ballistic

 2 min read / 

Bulletproof Clothing

As the US continues to allow civilians to carry weapons and gun violence becomes more of a concern, an increasing number of bulletproof apparel retailers are emerging across the country. Their target clients? The average Joe. Or at least those who can afford the hefty price tags associated with the “exotic” new fashion segment.

Miguel Caballero, a Colombian designer, sells his bulletproof blazers for 4,343.50 euros, and his tank tops for 2,023 euros. At a lower price, but still too high for most people, Joe Curran, who owns BulletBlocker, sells his bulletproof leather jacket for $875 and bulletproof classic two-piece suit for $1,200.

Source: Miguel Caballero

Caballero said that his clients include world leaders from South America and the Middle East, and international businessmen. Damien Ross, another manufacturer of bulletproof clothing, said that his clients are mostly college-educated, professional men, between the ages of 34 and 75.

Ross said:

“They [clients] see what’s happening on the news, and, any time they’re in a crowd or an area that can be prone to attack, they are concerned.”

Source: Bullet Blocker

Body armour manufacturing is a $465 million-a-year industry in the US, according to a report in August from Market Research. The retailers, who mostly entered the industry because of the surge in gun violence taking place around them, are presenting upscale bulletproof clothing, from blazers to tank tops.

Owning body armour is completely legal, and does not require a special permit or background check. However, guidelines vary from state-to-state, and felons are not able to purchase it.

Keep reading |  2 min read

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