Big box store business model in trouble?

I mentioned this a bit ago, but it seems obvious to me that if energy prices continue to stay at, or increase from, their present level, the business model of the 90’s which outsourced manufacturing to places with low wages and then sold goods where prices are high, is on its way out. The model depends on transportation costs being vanishing small compared to manufacturing costs.

But if transport becomes significant then the profits disappear…

So this news today is interesting:

“As the cost of shipping continues to soar along with fuel prices, homegrown manufacturing jobs are making a comeback after decades of decline.

While it once cost $3,000 to ship a container from a city like Shanghai to New York, it now costs $8,000, prompting some businesses to look closer to home for manufacturing needs.”

Read the full article here.

The long term effect may well be the return of small local manufacturing plants. Which would be the return of good paying jobs all around…

Author: Nicholas Knisely

Episcopal bishop, dad, astronomer, erstwhile dancer...

4 thoughts on “Big box store business model in trouble?”

  1. I hope so. I hadn’t thought about the manufacturing/shipping aspect, but was thinking that people wouldn’t want to drive extra miles to a retail area for big box retail. I hate those giant stores! But, WalMart’s parking lot here in Scranton is always full…

  2. Fr. Nick, this totally is off-topic and I’m sorry, but wanted to alert you to a Nova program on dark matter that will be on PBS tonight – Wednesday 6/25, that is – at least in my area, at 9 p.m.
    Just thought you might be interested.

  3. Thanks bls – I’m sorry to have missed the airing. I was on retreat with the rest of the diocesan staff in Prescott AZ. (Finally got to visit Salon Row…)
    I’ll keep my eyes open for the next time the show will air.

  4. Well, it was only a segment, actually; I missed it myself! (I’d thought it was going to be a whole show, but it was only about 10 minutes. So, maybe not even worth trying to catch it again.

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