Fejfar Business and Public Policy Blog: Amazon The Local Internet Store

Fejfar Business and Public Policy Blog: Amazon The Local Internet Store: "The current system of online internet sales is failing. Fraud is occurring both by the internet sales companies and the delivery and credit..."

Amazon The Local Internet Store

The current system of online internet sales is failing. Fraud is occurring both by the internet sales companies and the delivery and credit card companies that service them. Additionally, many poor people and middle class people use cash and checks for purchases and do not use credit cards. The strategy used by J.C. Penny Catalog and Sears Catalog was for the customer to simply place the order by telephone and then the purchased item was delivered to the J.C. Penny or Sears Catalog desk, locally, where the customer could pay with check, cash, or credit card. Additionally, if there was a problem with the purchased item it could be returned locally at the Catalog Desk. Amazon should switch to being "The Local Amazon Internet Store," operating in small towns and bigger towns and cities everywhere. The customer order is placed on the internet, but no payment is made. Instead the customer pays when the purchased item is picked up at the Local Amazon Internet Store. Shipping to the Local Amazon Internet Store is free. You can return any item, for any reason, within 6 months. The merchandise will carry a special code so that a receipt is not necessary. Also, the Local Amazon Internet store would not only carry the products of various online small business specialty stores, but would also carry the products of Target online, Kmart online, Home Depot online, Lowe's online, Kohl's online, Walmart online, Best Buy online, Circuit City online, Groceries online, Dick' Sporting Goods online, J.C. Penny online, Gander Mountain online, Sears online, etc. This would increase sales for all the online merchants and would provide the ability of the online customers to pay cash locally and returne locally which would save money for the customer and greatly reduce the possiblity of consumer fraud. If Amazon does not start a nationwide chain of local internet stores, then Walmart or another local start up small business should do it.

(C)Perpetual Copyright (2011) by Anthony Fejfar and Neothomism, P.C. (PA)

Fejfar Business and Public Policy Blog: Economies of Scale in Retail Sales

Fejfar Business and Public Policy Blog: Economies of Scale in Retail Sales: "Some persons think, wrongly, that a business has a duty to maximize profits by selling goods and services for the maximum amount possible. ..."

Economies of Scale in Retail Sales

Some persons think, wrongly, that a business has a duty to maximize profits by selling goods and services for the maximum amount possible. In fact, this is wrong. You see, in microeconomics there is such a thing as elasticity of demand. In many product markets the price charged has a significant effect of the demand curve, that is, when the price charged becomes too high, most people stop buying the product. Also, it is also often true that when the price charged for a product is lower, many more people will buy the product. When more people buy the product at a lower price, this is called economies of scale. Also, when more goods or products are manufactured and sold, the cost of production for each individual product decreases. This is another example of economies of scale. For now, let us consider the situation where economy of scales developes from a lower price being charged for the product in the retail market.

Monthly Sales 1,000 Widgets at $100 each,
Model A for gross monthly income on sales of $100,000

Monthly Sales 5,000 Widgets at $80 each,
Model B for gross monthly income on sales of $400,000

As you can see, under Model A, each Widget is sold for the higher price of $100 each, with gross sales of $100,000, while under Model B, each Widget is sold for the lower price of $80 per Widget, with gross $400,000. Thus it is clear that in the situation above, which may be very common in the real world, the business makes $300,000 more a month by selling each Widget for the lower price of of $80 a Widget rather than the higher price of $100 per Widget. This proves that in many instances it is quite possible that a business will make much more money by charging a lower price per product when economies of scale with an elastic demand curve are involved.

Fejfar Business and Public Policy Blog: Have Verizon (Bell Atlantic) and Frontier Communic...

Fejfar Business and Public Policy Blog: Have Verizon (Bell Atlantic) and Frontier Communic...: "It now appears that Verizon (Bell Atlantic) and Frontier Communictions (Northwestern Bell) have illegally merged in violation of the Sherman..."

Have Verizon (Bell Atlantic) and Frontier Communications (Northwestern Bell) Illegally Merged?

It now appears that Verizon (Bell Atlantic) and Frontier Communictions (Northwestern Bell) have illegally merged in violation of the Sherman Anti-Trust Act of 1890. Additionally, this illegal merger has also violated the 1982 Anti-Trust Agreement between ATT and the Baby Bells and the Justice Department, decades ago. ATT (American Telephone and Telegraph) was forced to divest all of the Baby Bells, and keep them independent, in exchange for being allowed to enter the computer and internet service industry. What impact this situation will have on the lowering of Verizon and Frontier stock remains to be seen.

(C)Copyright 2011 by Anthony J. Fejfar and Neothomism, P.C. (PA)