Discount Stores Are Awash in Merchandise Thanks to Shipping Delays | Hacker News Reader

Discount Stores Are Awash in Merchandise Thanks to Shipping Delays

wsj.com

53 pointsprostoalex26 comments

If you are an American and shop at Costco, the toiletpaper section has been practically overfilled for the past six months. People simultaneously overestimate and underestimate just how much time it takes to ramp up and ramp down production.

Am I greatly underestimating how much it costs to just store excess inventory in a damn warehouse?

Probably, yes. A warehouse is basically just a costco that you aren't willing to sell things out of. Why wouldn't you just make a new location?

Because you could put the warehouse in the middle of nowhere, hire a fraction as many employees, and leave everything in shipping containers.

But there's cost of shipping and maintenance of the warehouse, alongside with the product loss/tampering. None of these are revenue generating.

My assumption is that there are people out there who do the calculations of storing and shipping (with internal or external logistics) vs lean/JIT

But those calculations may have some assumptions about service and manufacturing availability

However I'm not one of those people, I'm guessing someone else knows better than me

"Put the warehouse in the middle of nowhere..."

Dude... you play way too many video games. The cost of building a warehouse, lead time and logistics is not like in Simcity. Best case, you'll have a large dockable warehouse in 12 months after purchase IF the bureaucracy is smooth. Which it wont be. Mobilizing a crew is its own nightmare when it's "middle of nowhere". Where do you house a hundred rotating contractors within a 20 min travel time if it's in the middle of nowhere that doesnt have the population infrastructure for that influx? Trucking in materials is it's own issue. Along with equipment. Oh and when the rest of the industry is doing the same thing... wait list or you get the bargain bin contractors... which... yea... not worth it. That and Conexes "rot". They're not long term solutions in a lot of environments. There's a lot of reasons why it ain't that easy as you think.

I hate the smell of white collar in the morning.

>I hate the smell of white collar in the morning.

More like "armchair urban planner/real estate developer". While I'm sure that most "white collar" workers don't know how long these steps take, I'm sure that some white collar workers in the chain (eg. management/engineers/civil servants) do know. By the same token, while I'm sure some non-white collar workers know how long this takes, I'm sure most non-white collar workers (eg. guy working in retail) don't have any idea either.

Although warehouses don't have to be located as close to consumers as say, a Costco or amazon fulfillment center, they have to be built. And for the past at least decade long term warehousing wasn't a major business model, better to sell it at a consistent pace. So there wasn't an investment in warehouse space. However between supply chain uncertainty and inflation, the relative cost of warehousing vs discount selling and reordering is lower now than it was before.

It makes no sense financially, building, maintaining, running them is expensive. I liken it to my own experience. I sent about 20 boxes of books to be stored because I just could not get my self to get rid of them. I rented a place for $25 a month. It was ok since it would only be a few months. So, 5+ years later, and an increase to $45 per month, I finally decided that I was never going to read them so I threw some out and donated the rest. I never even read a single one in storage and If I really had wanted to I could have bought them multiple times with the money I spent in storage fees.

Now imagine millions of items stored without really knowing if anyone will ever buy them.

Companies are so opposed to using storage that they are willing to send brand new items to the dump and take a 100% loss rather than to store them.

It is amazing how much we pay for clothing in the US, even at these discount stores. A huge amount of the clothes we wear are made in Vietnam. When I lived there, you can basically buy any name brand you want for almost nothing. For example, I'd get shirts with tags on them that say $90... for $5.

I also hung out in Vietnam, but only for a month.

I found the custom clothing that was not brand name to be an absolute steal. Just great custom tailoring and fabrics for basically nothing and ready the next day.

That said, the real brand name stuff that westerners would recognize and prize was not cheaper. There were very well done knockoffs, to be sure, but if you knew what you were looking for the watch or shoe wasn't quite right. If you Google "how to spot counterfeit [brandname] [product name]" and double check you'll see that 95% of the time it's a knock off.

I've learned to just learn what makes a given type of hide or fabric high quality and shop based on that. Most brands are merely shortcuts for the busy to make sure they get reasonable quality and a possible status symbol if it's especially luxurious and expensive. But if you know what quality looks like you can usually find something way better at half or a quarter or even a tenth of the price. Or even if it's more expensive to purchase (e.g., a fullgrain leather belt with properly protected metal[0]) it will last much, much longer.

[0] https://saddlebackleather.com is one of the few places I will shill for whenever I can. They make the very best stuff and it lasts forever. I wish more online retailers were like them. I've saved so much money over the years because their stuff truly lasts.

These sturdy leather bags look really good, but aren't they heavy? I had a regular Samsonite backpack (made out of plastic, not leather) that lasted for over 10 years of almost-daily use - actually it's still in Ok shape, but I don't use it anymore.

Yeah, they're very heavy. Great quality though.

This could be a crazy thing to say, but they might just be textile experts over there. When you're in Italy, even the "bad" food is great. In Switzerland, even the "bad" mountains are still great places to ski. And in Vietnam, even the cheap shirts are great?

Well, given that the clothes that most of us buy are made there (check your labels!)... yes.

VN imports the textiles.

> That said, the real brand name stuff that westerners would recognize and prize was not cheaper.

I'll just say that unless you speak Vietnamese or have locals who show you where to shop, a month isn't long enough to develop the inside scoops. =)

> nicely shilled site

Reminds me of Hamilton Shirts in Houston.

I worked at an NGO in Cambodia. One thing I remember clearly was having lunch with this French guy who was in the fashion industry. He told me: “if you’re buying a T-shirt for $10 or less, there’s no way around it: someone, somewhere is getting exploited.”

Weird comment. I don't understand why the price you pay makes a difference. Someone could be exploited even if the price was $100. Location doesn't matter either, people are exploited all over the world.

You don't understand why the price you pay makes a difference in whether someone is exploited or not? Do you think a shirt could be profitably sold for $1, and have everyone along the supply chain be paid a fair wage?

Also it's true, people are exploited for more expensive things all the time. But my point was about cheap stuff.

Sorry, but the final price of an item cannot be used to determine whether someone along the chain was exploited.

I was in the t-shirt industry for a number of years. Sold millions of them. The base price of a raw blank t-shirt at scale is around $1-4, so there isn't much room to go lower there. In essence, from your definition, ALL t-shirts are exploitation of some form or another.

I have picked up some amazing stuff at Marshalls lately. Name brand expensive stuff for very good prices. I'm slowly exclusively shopping there for shirts, kitchen supplies, and soaps. I still spend a little more on shoes and pants at other stores however.

I used to think, that big businesses are much better in making decisions, than small or medium.

Now I see, big retailers themselves created noose around their neck, freeze colossal finances in stockpiles, making situation much-much worse.

What should do sapiens, make agreement between organizations and regulators, to create some shared supply chain which will supply small batches, so shops will have reliable supply, even limited in capacity, but without need of those costly stockpiles.

Bullwhip effect in action!

What a difference a few months makes.

Back in November, discount stores such as Ross were worried that they would have a lot of supply chain issues.

https://www.thestreet.com/investing/ross-stores-drops-supply...

This article reads like an advertisement to go shopping.

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