Amazon Is in Talks to Buy RadioShack Stores, Report Says

http://www.wired.com/2015/02/amazon-radioshack/

by swohns • 11 years ago

236 141 11 years ago

vhost-3• 11 years ago

I wonder if this is their in for B&M stores. I can also see this as part of their plan to start shipping items before you even buy them. I click checkout and it tells me to just go pick up the item from Radio Shack on 6th and Weidler.

chiph3• 11 years ago

With their analytics, they could probably make a good guess as to what people living in a 5-mile radius of the store are likely to purchase.

Which could make for some interesting juxtapositions on the shelves. Kitty litter next to Blu-ray movies, etc. But if it sells, it sells.

xur17• 11 years ago

I could also see it acting as a showroom for certain products that people want to be able to look at, handle, etc.

vhost-3• 11 years ago

I actually get cat food and water fountain filters as a subscription through Amazon and they always offer me kitty litter on the home page. They just don't have the kind I use.

pbreit5• 11 years ago

That sounds new like a miserable experience. Does anyone actually like online ordering with instore pickup?

mark-r2• 11 years ago

When shipping costs add 50% to the price of a cheaper item, and the store is convenient, free instore pickup is a killer feature. I've bought lots of stuff that way from Walmart.

VLM4• 11 years ago

I have done that precisely once with a very large monitor where I inspected it before signing. No not want UPS box with rattle of broken glass.

I suppose you could do fresh food that way, get my avocados ready ahead of time, but show me them before I sign for them.

cenhyperion• 11 years ago

I click checkout and it tells me to just go pick up the item from Radio Shack on 6th and Weidler.

I'd much prefer it showing up at my door in two days and would view this as a major UX detriment. It may not be a common feeling, but the opportunity cost of spending an hour or so running errands to various brick and mortar locations around town multiple times a week is a major reason I'm a prime member and do a huge amount of my shopping through Amazon.

vhost-3• 11 years ago

I definitely don't disagree. I'm a prime member as well and feel the 2 day shipping is the sweet spot for time waited for my stuff.

chrisgd• 11 years ago

Says RadioShack equity holders

MilnerRoute• 11 years ago

It'd be easier for Amazon to sell Amazon smartphones if their customers could first actually hold one in their hands at the local mall.

epaladin• 11 years ago

Well, they're at AT&T stores, many of which are in mall, and it doesn't look like it's helped any.

acgourley• 11 years ago

Last time I was in an AT&T store the Fire wasn't even powered on. After using the UI I understood why.

criley23• 11 years ago

Eh I doubt that the issue is brick and mortar representation.

The worlds best selling smartphone family, Android, has next to no dedicated stores outside of a handful of Samsung and Sony experiences.

It seems to me that the trick to getting more sales at network stores like AT&T is simply paying off AT&T to get it's representatives to push your product. Many buyers go in and ask for recommendations or allow network staff to drive them towards a product. In my experience, the rep will usually push people towards a Samsung flagship. When I visited my local official AT&T last summer, they were pushing A LOT of Samsung gear and didn't have much of anything to say about the latest LG G3 or HTC M8 refresh. They pushed the Samsung Gear watch but didn't have much to say about any other brand.

Amazon would probably boost the sales of their devices much more strongly with some kind of sweetheart promotional deal with a network than they would trying to operate non-network smartphone stores. Who's going to go to an Amazon store to buy an Amazon phone? You go to your network store to look around at what's available.

I could see the smartphones-in-store approach working if they get customers flying through the doors for other reasons (same day pick up, Amazon lockers, Prime-ready electronics show room, etc), and kept them in store long enough to look at phones.

Touche• 11 years ago

The worlds best selling smartphone family, Android, has next to no dedicated stores outside of a handful of Samsung and Sony experiences.

Every wireless store is a 90% dedicated Android store.

pbreit5• 11 years ago

you really need to acknowledge that B&m stores have been critical to apple becoming the worlds most profitable company.

Spooky232• 11 years ago

Sounds fishy to me.

Radio Shack tends to have old leases in 2nd tier shopping centers. Why would they buy a marginal retailer with poor footprint, when you could just lease stores yourself?

There was a time when getting space in malls and strip shopping centers was tough. This isn't one of those times.

eof• 11 years ago

old leases = below market rate? they are already well distributed for ten zillion amazon lockers?

it doesn't seem so far fetched to me; amazon being able to pick up a bunch of cheap space in fell swoop.

ChuckMcM• 11 years ago

That is what I was thinking, a lot of Amazon lockers. And to be honest Radio has the 'components' space to itself in most places. I could see making it work if it was also connected to the giant hose that is Amazon's supply chain.

libria• 11 years ago

Having used Amazon Lockers a lot, I don't really get it. If you don't want a package sitting on your doorstep all day, have it delivered to work. And Lockers has a maximum size limit that I hit every so often that negated that option. Having it show up at my desk is a lot more convenient.

Now if I could return packages through Lockers, then I'd be game.

chiph3• 11 years ago

They're probably going to be cherry-picking the locations, and the intent will be to buy the leases out, not the stores. They'll bring in the liquidators (perhaps they'll use the same ones that Circuit City used...), sell off the inventory and the fixtures, gut the interior and then redo it with their own interior design.

pbreit5• 11 years ago

They might be close to free and that sounds like a decent overlap with amazons low prices.

blt2• 11 years ago

You sure about the 2nd tier part? The ones around here are in prime locations.

mark-r2• 11 years ago

The one closest to me is in a strip mall next to a Mexican restaurant.

scottrblock• 11 years ago

Yep. The one closest to where I work is in a great spot in downtown DC, ironically enough half a block from Bezos owned Washington Post headquarters.

The one closest to where I live is in the prime shopping center adjacent to University of Maryland.

There's seemingly enough in good locations to cherry pick them out.

larrys2• 11 years ago

"Why would they buy a marginal retailer with poor footprint, when you could just lease stores yourself?"

Because it's already assembled, at, in theory, lower than market rates and won't take months or a year to assemble. Similar to why companies buy companies instead of building their own. At least in the area that I am in Radio Shack has decent retail locations.

pjy04• 11 years ago

THIS... buying 2nd class real estate locations won't improve it just with a new name...

dredmorbius6• 11 years ago

Lots of established retail locations and fire-sale prices.

Putting together the real-estate inventory on your own means a lot more work.

Sell off the nonperforming locations you don't want. Keep and gut the rest. My bet is that Radio Shack as a brand is done.

untog2• 11 years ago

Take a look at their locations in New York City:

http://www.radioshack.com/store-locator

(there's no permalink, but try ZIP code 10008)

There are a lot of prime locations in there. No doubt some duds too, but I expect Amazon could cherry-pick.

mitchell_h• 11 years ago

Bloomberg is reporting that "THE SHACK!" is in talks to close half its stores and sell the rest to Sprint.

http://www.bloomberg.com/news/articles/2015-02-02/radioshack...

dredmorbius6• 11 years ago

Quite possibly courting multiple suitors. Though if Sprint's the best counteroffer they've got, Amazon's going to walk all over this.

VLM4• 11 years ago

Pump n dump. There's a story on bloomberg that radioshack had been a target for months of leveraged buyout rumors in pump n dump schemes and now, finally, "woosh sound of relaxation" thats all over. LOL little optimistic, not done beating this dead horse yet.

sushid2• 11 years ago

Except for the small fact that the NYSE suspended trading on stock RSH yesterday?

dragonwriter2• 11 years ago

Pump and dump doesn't require that the stock be traded on an exchange -- the idea is to manipulate perception and, thereby, demand to improve the price you can sell at, which applies no matter what mechanism you are using to sell.

Animats• 11 years ago

This makes little sense for Amazon. They have a huge product line. What items would they put in a retail outlet? Unless it's a desperate attempt to push their phone/tablet line.

bhartzer• 11 years ago

Would make sense for Amazon to do this, they could stock a limited inventory and expand their quick-delivery option for a limited set of products.

potatolicious• 11 years ago

Not to mention make an impressive and accessible demo-space for their increasing stake in devices and media (try Amazon Prime Video! try Kindle Fire!).

It'd be a hell of a lot better than the neglected "demo" devices glued to a display in Best Buy they have right now.

BendertheRobot• 11 years ago

This would mean sales tax in all 50 states for amazon purchases.

iterati• 11 years ago

Except Delaware. No sales tax there.

aaronbrethorst• 11 years ago

They currently collect sales tax in 24 states[1,2], and I'm guessing the writing is on the wall in the other 26. I don't know if there's any truth to this Radio Shack rumor, but I'd expect that avoiding tax nexus status probably isn't as big a deal for them as it used to be, because they're going to be forced to do soon, one way or another.

[1] http://ilsr.org/rule/states-amazon-sales-tax-map/

[2] http://blog.taxjar.com/michigan-sales-tax-nexus-law/

SomeCallMeTim• 11 years ago

...and it would mean getting rid of the annoying Colorado-vs-Amazon lawsuit, and Amazon reinstating Colorado affiliates.

And it would simplify my working arrangement (as an Amazon employee).

Oh please oh please...

CitizenKane• 11 years ago

It might, but Amazon has been slowly losing the sales tax fight [1]. I imagine they'll do this in phases or do it in places where they're likely to have sales tax levied on them in any case.

For Amazon, getting faster and more convenient delivery might be worth the cost. It helps them in their fight against brick and mortar retailers, and if they're careful about it they could probably leverage a limited physical presence pretty well.

1. http://en.wikipedia.org/wiki/Amazon_tax

bastian3• 11 years ago

I'm pretty sure that Amazon will use the best positioned stores as forward stocking locations. They experimented with a similar concept at WebVan i believe. I also think they now realize that what Postmates and Instacart are doing today (using the city as a warehouse) is actually working and can be attractive to customers.

baddox• 11 years ago

My initial impression is that Radio Shack stores are too small to be used primarily for stocking.

AdamTReineke• 11 years ago

They're small but if you took Amazon's warehouse layout and Kiva robots, you'd get an incredible storage density. Coupled with lockers, pre-stocked with Amazon's top products, and staffed by one or two people, you'd have a pretty good system.

pbreit5• 11 years ago

Wouldn't one cheap warehouse in the city(ies) suffice?

bastian3• 11 years ago

I can only talk about our (Postmates) experience but having multiple pickup and drop-off locations increases the efficiency of a fleet dramatically. In larger cities like New York, LA, etc. multiple warehouses are a huge advantage. Off course i'm mostly referring to on-demand or same day deliveries here.

Maybe i should add some more color here. If you think in terms of traditional delivery, one warehouse is enough. But i'm not sure that this paradigm (one van drives to a warehouse, collects a bunch of stuff and delivers it), is what works best for on-demand, 2-hour or same day deliveries. Multiple, fast and easy to reach pickup locations are an advantage at scale. Especially for deliveries where minutes matter.

Ultimately, we will probably see a combination of both.

schnevets• 11 years ago

I'm sure Amazon is eying every struggling retailer the exact same way.

pasbesoin• 11 years ago

So, AmAShack or Radiozon?

I'm not sure I see the logic/advantage of taking over existing RadioShack locations as opposed to just making real estate decisions based upon Amazon's own requirements.

A select subset of their stores might be quite select (and limited in number).

johansch2• 11 years ago

Perhaps Amazon is looking to use these locations as pickup-up-places for shipped packages?

tomsthumb• 11 years ago

isn't that covered by the delivery lockers?

johansch2• 11 years ago

Are those really widely distributed across the US? Perhaps they are looking for more locations to install these.

tn132• 11 years ago

This is a good example of why we should let failed companies fail and let good companies then salvage the good assets.

Imagine US government had taken over RadioShack to "protect the jobs" using taxpayers money and spent billions for a so called turnaround.

650REDHAIR• 11 years ago

RadioShack is not comparable to Detroit.

jessaustin6• 11 years ago

Yeah unionized auto workers are far more valuable to politicians than part-time $9/hr people.

dredmorbius6• 11 years ago

Radio Shack isn't 1) too big to fail and 2) doesn't have an entire ecosystem dependent on it (hobbyists included).

jessaustin6• 11 years ago

"Too big to fail" is a term with only political meanings. Best not to let it cloud one's thinking.

blt2• 11 years ago

Please, please, Amazon, leave 1/16 of the shelf space for electronic components! Pack them densely, don't offer customer support, and charge high prices. We need brick and mortar places to buy components. It might be worth a lot of goodwill from electronics tinkerers. Although I guess that's not a big enough group to matter, but who knows...

derefr2• 11 years ago

You know where I can buy a lot of common electronic components these days? Home Depot. Buildings are increasingly wired with various digital sensors, so electricians are increasingly in need of electronic this-and-that to couple them together.

Sure, you can't build whole from-scratch circuits purely from hardware-store parts, but if you run out of resistors/pots/whatever, you can restock pretty cheaply in any town big enough to have professional electricians operating out of it.

Also, I should probably point out that a lot of places (e.g. Best Buy) still do sell electronic components—they just sell combinations of them in lots and call the result a "hobbyist kit." It's much easier on their shelf space, and their employees, to just carry one SKU that you can point anyone looking for components at, which will give them most of what they might need.

For all the other stuff (what you might think of as a "booster pack" to a hobbyist kit's "base pack"), there's no more economical way to get exactly what you want than ordering online anyway. Expecting there to be a store in every rural town carrying every random IC one might need for a project is just insane, when you can order a pull-sheet of them for $2 no matter where you are.

WalterBright2• 11 years ago

On the other hand, consider the chain store "Tacoma Screw" around here. They sell what you would expect - screws, nuts and bolts, of every description, type, grade, hardness, length, head, etc. It's a marvelous place for an engineer like me.

The prices are, of course, high, but when I break a bolt or lose one for my car or other project, Tacoma Screw has an exact (or better) replacement.

The hardware store sells bolts and nuts, too, but the selection is erratic and the quality is dubious. When I don't want my transmission falling off, I want top quality bolts guaranteed.

psychometry• 11 years ago

You might already have Amazon's same-day delivery available: http://www.amazon.com/b?node=8729023011

seanp2k22• 11 years ago

If you're in the Bay Area, halted.com has a store in Santa Clara that totally blew my mind. Dozens of aisles of electronics components, including racks of reels of surface-mount stuff. They also have stuff like used oscilloscopes, industrial robotics controllers, etc.

CamperBob22• 11 years ago

If you're in the Bay Area, you never needed Radio Shack to begin with. Their market is (was) the rest of us, here in flyover territory.

larrys2• 11 years ago

I have no need for any of that yet I could walk around a store like that for hours and hours.

kenrikm• 11 years ago

Try HSC Electronic Supply.. down in San Jose That'll really blow your mind.

Edit: I just clicked the link and realized that is the same place lol, yeah it is awesome.

sschueller• 11 years ago

In Massachusetts there is: http://www.youdoitelectronics.com/

e0m• 11 years ago

I like the idea that one of the shipping options could be:

"2 day shipping (free with Prime)"

"1 day shipping $3.99"

"Get off your butt and go get it yourself (closest 2 miles)"

nacs• 11 years ago

Also by Amazon:

* Delivery by bicycle

* Drone-based delivery

raycloyd• 11 years ago

Perhaps Amazon Local could expand and extend as a storefront hub that connects with the city's businesses. Or maybe I just wish I could get local goods in Amazon's purchase model

sosuke• 11 years ago

Oh no I sure hope not, the tax will be back and that is enough to move me to other sites in several cases.

Edit: To clarify, no sales tax was one of the first things Amazon and other online retailers had on their side. They could sell things cheaper, even by a little, and the rest would be made up by not having to pay sales tax. If they have a presence in a state though they have to collect sales tax. If you buy a lot from Amazon it is kind of like taking a 8.5% pay cut in buying power. If you remember back in 1997-8 there were several bills popping up around it. My Google-fu is failing me, but this is a real issue. Amazon even discontinued the associates programs in some states to avoid taxes.

http://en.wikipedia.org/wiki/Amazon_tax

GFK_of_xmaspast• 11 years ago

Paying taxes is a civic duty.

pests• 11 years ago

Amazon already collects sales tax in 24 states as per your link.

jabagawee• 11 years ago

IIRC, aren't you supposed to calculate your owed taxes for your state and then pay when you filed? Of course not many people do this, and the IRS (or state equivalent) has no hope of enforcing this.

scintill76• 11 years ago

In some states, "use tax" is due on goods or services bought out of the state and used in the state. I don't know how widespread it is, but I don't think there's a blanket law that applies over all the US.

selimthegrim• 11 years ago

In Louisiana, they don't let you register your out of state car unless you pay use tax on it.

brianbreslin2• 11 years ago

Most states where they have warehouses they pay taxes in now (which is many many states now).

julianpye• 11 years ago

Scott Galloway talked about this at last week's DLD. You can hear his points and arguments at 6:50 -very insightful video on why Amazon has reached a point where they must make a brick and mortar acquisition https://www.youtube.com/watch?v=XCvwCcEP74Q

mhuffman• 11 years ago

I would like to see Amazon Direct-to-Store pickup locations at all existing radioshacks. Do you hear me Amazon!

CyberDildonics• 11 years ago

They should treat the stores as a cache for whatever people in the area order. If someone orders something, send two and put one in the store. That should make things interesting.

DigitalSea• 11 years ago

This could be very interesting if it proves to be true. Seeing Amazon purchase Radioshack and then miraculously return it to its former glory and exclusively sell electronic components, hobbyist kits and stop selling things like TV and phones would be a move that I would wholeheartedly support as would my inner 7 year old self who has fond memories of going to Radioshack with my dad and buying a bag of LED's and various electronic components to build things.

As a bonus they could use it to locally store popular items, use the stores as pick-up and drop-off zones (as the site suggests) and have a few computers consumers can come in and use to order directly off of Amazon. I would hate to see Radioshack die, it kind of makes me sad to think the brand could just vanish.

kumarm• 11 years ago

[exclusively sell electronic components, hobbyist kits and stop selling things like TV and phones ]

So sell low margin products and leave out high margin products? How do you expect that to work for a business?

cryptoz• 11 years ago

TVs and phones are very low-margin products. Batteries are high margin products. I think the RadioShack cost for a 2-pack of AA batteries is about 5-20 cents, and they charge like 5 dollars, right? A TV or phone costing $500 to RS probably sells for $502. At least, that's how The Source works in Canada (former RadioShack).

Telecom contracts, however, are high-margin, and they'll have to continue increase their mobile contracts significantly if they want to stay in business.

hyperbovine• 11 years ago

Profit has never been high on Amazon's list of priorities...

chrischen• 11 years ago

They already sell electronic components, Arduino and Arduino accessories, multimeters, drones, etc. Almost all the Radioshacks in my city (San Francisco), and in my old city (Troy, MI), stock these things.

What makes you think that's the strategy it has to employ to succeed? Because it is doing that, and it's not working. Normal people don't buy those things, and certainly a network of thousands of stores stocking resistors isn't a viable business when the small amount of hobbyists just go online.

leoc• 11 years ago

[...] certainly a network of thousands of stores stocking resistors isn't a viable business when the small amount of hobbyists just go online.

Maplin has been doing it in the UK (not one of the world's cozy retail markets) with apparent success. https://news.ycombinator.com/item?id=8664813

analog31• 11 years ago

So does a retail presence in every state mean that Amazon will pay sales tax?

fnordfnordfnord• 11 years ago

The Sears & Roebuck dealer store (Smaller Sears stores in typically in rural locations) remade as an Amazon Prime depot/storefront?

dredmorbius6• 11 years ago

Pretty much exactly this.

It's where the developing war between Amazon and Google starts to get interesting. Google's approach has been to work with existing brick-and-mortar stores via Google Shopping Express, which I suspect means tying into their ordering and inventory systems. That's also more-or-less an attack on IBM (which does a lot of SMB work as well).

Google gets storefronts, merchandise, direct retail, and business knowledge, while Amazon's got to build that, but has a single unified shopping and logistics system.

I'm not sure which is going to win, though I'm betting somewhat on Google.

fubarred• 11 years ago

Bezos could refocus on DIY, hobbyists and maker culture... classes (or sponsorship thereof) would be a good direction to get the cash register filling. It's hard to compete with online, open-source, but there are some things people would pay for (and want) in-person.

sidcool• 11 years ago

I would be much more excited if Google bought it. Google lacks a physical presence that Apple has, and they need it.

7952• 11 years ago

Amazon sells so many different things that it is difficult to find products within a particular niche. When you look for educational toys on Amazon you will not presented with electronic kits (for example) because mostly that is not what a generic customer wants. Even if you go looking for a particular niche it can be very tricky.

There are lots of sites that sell the same products Amazon do but target a particular niche. A brand like RadioShack could use the Amazon backend and only expose a particular type of product that fits within the traditional RadioShack ethos.

genopharmix• 11 years ago

This is a brilliant PR move.

Shivetya• 11 years ago

Would this be a precursor to their delivering items themselves? I wonder if it would allow them to effectively have mini warehouses which are just behind a convenient store front. Something like Amazon Basics, simple items Amazon users buy all the time just now in your neighborhood shopping center.

Hell they could do shipping and receiving like UPS stores if they want. The possibilities are endless.

ihnorton2• 11 years ago

I'm pretty sure they already do this in major metro areas. Many of my Amazon-as-vendor purchases are delivered by "A1 Courier". Often at unexpected hours too.

darrenmc• 11 years ago

In the UK amazon already deliver some items themselves using their own brand couriers.

harmonicon2• 11 years ago

I have always wanted Amazon to have a store so I can play with their kindle products before pulling the trigger. Hopefully this deal can make that happen.

CPLX• 11 years ago

Are you aware you can do exactly that at Best Buy?

harmonicon2• 11 years ago

No actually I don't. Haven't been to one in years. Thanks for the tip.

Amazon Is in Talks to Buy RadioShack Stores, Report Says

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