Can Locally-Owned Stores Save RadioShack?

Yves here. Be sure to read the linked story if you want to learn more about the demise and possible resurrection of RadioShack stores.

By John Cog

It looks like the bankruptcy of RadioShack has actually been good for independently-owned stores, who are now able to open in new locations partly by focusing on the DIY/maker movement (or young robotics enthusiasts). One store owner admits that on some supplies they’re actually getting cheaper prices than they got from RadioShack, while another points out that RadioShack’s bankruptcy has finally removed restrictions on where they could be located. (“The corporate store had all of the big towns… Now they’ve encouraged the ma and pop stores to take over in those areas.”)

But best of all, RadioShack’s bankruptcy has made them all come together into a community that shares information on what their customers need. “It’s pulled the dealers together…” says Vern Murray. “They share experiences, products, happy moments, sad moments. There’s way more of that now than there ever was before the bankruptcy.” After 20 years of running a RadioShack in Blackfoot, Idaho, he believes they’ve finally come full circle. “Now we’re back at what started RadioShack: smaller transactions, back to the core product, what RadioShack was invented for…”

I personally still have fond memories of that metal-detector kit I’d bought with my allowance at a RadioShack back in 1977. But those were days when a 28-year-old Bill Gates wrote the code for the TRS-80, which in retrospect apparently marked the moment when the corporate executives decided to abandon hobbyists to push big-ticket items, leading RadioShack into a doomed competition with big-box stores. (I’m really glad this article included those vintage RadioShack commercials which acknowledge their heyday, like the poignant Super Bowl ad which begins “The ’80s called. They want their store back” and the one where Alf finally turns in his clunky “cordless” phone.)

These locally-owned RadioShack stores now actually hope to compete with Amazon, which has sucked up 90% of the growth in all consumer electronics sales, by offering personal (and in-person) customer service on electronics. “The world will always need somebody that will help them with a question…” Vern says philosophically. “I don’t think anybody will ever get rich off it again — I think those days are gone. But I think there will always be a spot for someone who can solder a wire or just answer a question, put a battery in a cordless phone for somebody who’s elderly, a battery for a key fob in a car…”

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  1. The Rev Kev

    This sounds very optimistic this. No levels of MBAs, corporate management & corporate policies to weigh a business down; the flexibility to adapt and change to changing circumstances as all businesses are suppose to; nothing big enough to attract the rapacious attention of private equity firms; fulfilling local demands by local customers. I see a call for a lot more businesses like this down the track.

  2. PlutoniumKun

    The closest equivalent on this side of the Atlantic is the UK’s Maplins, which went bust this year – mostly attributed to online competition (but note the involvement of private equity). The small Irish equivalent which I loved as a teenager – Peats – went bust a few years ago when it tried in vain to go into upmarket electronics.

    But what I find interesting is that I’ve found that in more run down areas and small towns there is a wave of small, usually Chinese or Arabic owned mobile phone repair shops, which are rapidly expanding into doing general electronics repairs and selling obscure parts (usually, it should be said, of very low quality) for those willing to try to fix their ailing pc’s. A Chinese friend runs one in a small town here and she has quite a thriving business fixing and ordering parts for people, mostly phones, but also other items. A lot of her profit margin comes from having Chinese bulk sources for things like phone screens and batteries which are far cheaper than you’ll find online. I wonder if this sort of business is a more sensible response to modern electronics, which are usually beyond the amateur repairman than those I remember from the ’70’s and 80’s.

    1. notabanker

      Americans lock down phones. If you want to use Verizon, you have to buy the phone from them.

      Lot of small PC stores, and the kids here are big into building their own gaming PC’s, but the carriers who control Congress won’t let anyone get into the mobile business like they do overseas.

    2. marku52

      It’s crazy. Look at electronic components prices on ebay from China. 100 1N34 diodes for about $1.50. uP processor boards (Arduino) for about $10. TFT display boards for about the same. It’s nuts. Ebay China is my go to source for many electronics components lately.

      Your lady friend probably has even better connections.

      With FREE SHIPPING. I sell guitar parts internationally and it costs me a minimum $22 to ship international, even to Canada. I could never sell a one dollar part.

      China has given their small businesses a huge competitive advantage with low cost China post.

  3. XXYY

    The obvious theme here is that there is a difference between running a small business that pays the owner a decent living year after year, and a “property” that someone hopes will eventually lead to a 7 or 8 figure payday. These two kinds of businesses require different mindsets. The former have largely been replaced by the latter in the last several decades, with obvious results.

    1. Jeremy Grimm

      I remember when the smart money started hunting out company stocks showing exponential growth or showing potential for exponential growth — the next Microsoft or Apple or Amazon … Before that stocks were evaluated based on their dividend yields, investment in capital and new processes and new products, and their long-term ability to maintain a place in their market and a fair share of its profits. AT&T was a utility, a boring stock that paid good dividends and promised a long-run of growth as the country grew. As a kid I used to look forward to the Bell Labs TV shows and even enjoyed them when they showed them to me a third, fourth, and fifth time in grade school. That made me interested in science and engineering and when the U.S. started its race-to-the-moon I was one of the bright-eyed college kids joining the study of science and engineering in the 1970s, lucky in the Nixon the death lottery, and starting my studies at roughly the same time the first pink slips went out following the successful landing on the moon.

      I remember walking to Main Street as a kid to visit the local hobby store where I could buy all kinds of little tools and materials and walking to the radio shack store to buy parts for projects I dreamed but never finished. I hope the Radio Shack stores can offer some of the lost memories I so fondly recall from my youth to today and tomorrow’s youth. Humankind is meant to dream and build dreams.

      Looking back — the U.S. elite pissed away so much of what could have been — and for what?

  4. lyman alpha blob

    I hope they are successful.

    One of the best purchases I ever made was this small transistor radio about 15 years ago. It was “outdated” technology when I bought it and I’ve gotten a lot of funny looks over the years as I hold it up to my head to listen to a baseball game and people mistake it for an oversized mobile but the thing is it actually works. I’ve brought it camping and to the beach, caught the Red Sox score in the midst of several weddings, graduations, etc. I’ve dropped it innumerable times, got it wet, got sand on it, left it on and drained the batteries and never once have I ever had a problem with it. And it cost all of about 10 bucks.

    There something to be said for an affordable, well built piece of equipment that does what it’s supposed to do and runs for years with no upgrades or tech support needed, which is more than one can say for 99% of todays digital widgets.

    Now all you kids and your pokemons get off my lawn!

    1. JTMcPhee

      Made in China, maybe? And of course selling stuff that lasts and works is anathema to the Consumer-Global Trade-planned obsolescence world political economy. I lost my old, as in from my parent’s house old, 50 years old, Swing-Away can opener. The new one I bought crawls off the rim on most cans, fails to cut continuously all the way around, and is just plain chintzy. And of course the “standards” for can rims have apparently changed too, maybe that’s part of the problem but they are, like everything, aver so minutely getting thinner and crappier — like a 2 x 4 stud that is “legally” 1 1/2 x 3 1/2 butif you measure them they are more like 1 3/8 x 3 3/8. Or that “6 ounce can of tuna fish” called for in my mom’s tuna casserole recipe, that now contains 2 1/2 ounces (drained weight) if you are lucky.

      The law of less — less and less product, less and less quality, less and less purity, for more and more mon$y. Corollary: more and more labor, for fewer and fewer people, with more and more micromanagement and metrics, for less and less mon$y.

      The collapse of lots of processes, like the “Global Economy,” can be fitted to various curves. Here’s some thinking on what might be in the cards in a “reversion” to global simplicity and local complexity:

      1. a different chris

        It’s not all “less”. That can of tuna fish by definition (the volume vs exterior dimensions ratio you saw in junior high) has more basic packaging for less actual stuff, then it’s packed with a bunch of other cans, shrink wrap is then added, then it’s stuck in a box, then it’s shipped to some warehouse… and in the ideal world our techno-gods envision, it gets all unwrapped down back to the can-size, and repacked with the rest of your “on-time” dinner into another special container so it can survive both the intial (re)delivery truck and provide grips for the last-mile drone.

      2. Martin Cohen

        I recently got a manual can opener that cuts around the side of the can instead of the top. A little harder to use but works great. The can reseals much better also. Cost about $15.

    2. Anon

      That same transistor radio has been updated to a fully digital model (no hand dial) that “learns” how to maximize the signal reception, has 20 station memory, can boost the bass tones, and shuts off automatically after 90 minutes. Its the Sanjean DT200. (about the size of a cigarette pack)

      1. lyman alpha blob

        That’s great but the point is I like the fact that it isn’t digital. I know it’s hard to believe.

        It serves the purpose I bought it for and costs quite a bit less than the SanJean model that you mentioned is selling for online. If it ain’t broke…

  5. Louis Fyne

    I really want those indy Radio Shacks to succeed. But it’s tough to compete (purely on price) against sellers in China (that’s where most of the factories are) via eBay (retail) or alibaba (wholesale). No sales tax + low shipping costs.

    hope that they can break even on selling stuff and use services (repair, classes, etc.) for profits.

    1. Dirk77

      I’m not so sure. Radio Shack went bust because of looting via stock buybacks I heard. There still may be a viable business model there. Perhaps a cooperative is the way to go, especially if Michelle Obama loses to Trump in the next election and Bezos is left holding the short term end of the stick. Personally, I’ve been waiting to find a local shop to repair my iPhone.

      1. JTMcPhee

        I used to do some electronics tinkering. Radio Shack and a local geek electronics store were my go-to places, where discrete parts were available along with store staff who themselves were wise to Ohm’s Law and likely were also amateur radio license holders. Most of the electronics-part stores are long gone, and Radio Shacks I have been to since sell a lot of cheap Chinese crap, including radio-controlled toys, and they have very few bits like capacitors, resistors, discrete transistors and diode, and such. The workers, slaving under the usual micromanagement pressures and “staffing-per-modeled-peak-customer-moments” and crappy wages, tend to not know much about anything they sell, except the stuff that generates spiffs and commissions like cell phones. That was driven, just like the case with another national chain I worked for, West Marine Products, by bottom-Line MBA analytics and screw-the-customer ethics.

        Hard to swim upstream against the flood tide of dumb greed…

    2. DF

      I buy a lot of stuff from Aliexpress; however, sometimes when you’re working on a project, being able to drive down and just pick up something that you didn’t realize you needed can be a major boon.

      If the staff’s knowledgeable, that’s a plus as well.

    3. Grumpy Engineer

      Teaching classes is a good idea. If a revitalized Radio Shack were to teach classes on electronics repair, I’d be the first to sign up. I’ve successfully replaced leaking electrolytic capacitors on a number of TVs and computers for friends over the years, but it always feels like a crap-shoot since my soldering skills are so poor. Some formal training would really help.

      And there’s a model for the classroom approach. Joann Fabrics regularly offers classes on sewing at low cost, but then they bring in more revenue when their students purchase sewing machines and materials for projects. I’d bet that Radio Shack-hosted classes would bring in similar revenues.

      1. Jeremy Grimm

        I second that idea! Our public schools don’t do the job. The local radio shack might be able to re-kindle and grow the creative fire in our youth, and in old farts like me. I think sales, and profits, and as or more important that imponderable business ‘goodwill’ would result.

  6. Kurt Sperry

    I am willing to pay a premium for parts and pieces *now* that I can just drive a few minutes and have. If the seller can also offer knowledgeable advice face-to-face or do the work, that’s huge added value, and another something Amazon and Alibaba will probably never have an answer to. I have a local Apple-focused indy repair shop that ticks most of the boxes, and I suspect they owe their market niche to Apple’s stubborn refusal to make their devices easily user-serviceable.

  7. TimH

    To all those who think RS can be saved… when was the last time you wanted to go to one?

    I distinctly remember the people exclaiming how wonderful WebVan was, but haven’t heard of anybody, even third hand, who used them.

    My 2c is that RS may have been great in the 1970s, but my experience in the 2000s was of overpriced tat that still looked like it was from the 1970s. Plus the customer tracking demands at the checkout.

    1. curlydan

      It’s probably about convenience. If I need a battery for my car alarm, I’m going to go to them or the local battery store–whichever is closer.

      I still think RS could get some decent last minute toy/electronic sales in their “golden quarter”, aka 4th quarter around Christmas.

      Hopefully, having franchisees run the businesses and knowing their local clientele’s needs will help. When they drifted into phones, it really went downhill and they never recovered.

      If it’s all franchised (and virtually all of it is), then the last corporate guys in Fort Worth (?) can sit back, reel in the royalties, and ride the brand name. It looks like they get 5% of sales (maybe 7%…can’t really tell), so not a bad royalty really from a franchisee’s perspective.

    2. Jeremy Grimm

      I went to a ‘local’ Radio Shack — before the transition — to try to buy a USB cable with uncommon but by no means rare or bizarre connectors at either end and found none. I looked for a simple resistor kit so I could play with my LED lights … but found none. [They may have been there but I got tired of looking and felt uncomfortable in the Radio Shack Store I drove for more than half-an-hour to reach. So — the saving of RS depends on how much they can change from their pre-bankruptcy way of business. If I toy with an electronics project now my goto site is one of the large electronics catalog websites. If I can’t find a clock radio I like at Target, Walmart, or Best Buy, I might try the Radio Shack I visited.

  8. tg

    The question is: How many electronics hobbyists are there? How many people are interested in repairing their electronics instead of discard/replace?

    ALIexpress is less competition than supplier. Even if I could buy it from China for $1, I’ll pay $2 – $3 locally if I can have it in my hands in a matter of minutes….shipping from China is measured in weeks.

    This means I have to buy quantities of everything I might need and keep an inventory. Add in the fact that I don’t know which vendors on ALIexpress are selling garbage and which are selling the good stuff, and there’s a real value proposition for a local retailer.

      1. TheMog

        Silicon Valley does have a pretty established Maker scene, but I’m not actually sure that it’s quite as big as one would expect.

        While I do tinker a little with electronics, a lot of my IT brethren seem to regard hardware as something they have to deal with to run their software on, not something to understand and repair.

        Plus a lot of the component stores that actually used to be worth visiting (like, 15-20 years ago) are now something that I prefer to only set foot in in an emergency.

    1. Grumpy Engineer

      I too see value in having components available immediately instead of waiting for an online supplier to ship them. Unfortunately, Radio Shack reduced their component offerings pretty severely before bankruptcy, which limited the value of their service. The last time I went there I was looking for four different parts, and I came away with ZERO out of four. It was a complete waste of a trip. Their selection was pitiful.

      At this point, going online seems to be the only solution for individual components. I’ve settled on Digi-Key. They’re probably more expensive than China, but the selection is massive and I only have to wait a few days for shipping instead of a few weeks. Avnet, Mouser, and Newark are also domestic options.

    2. Jeremy Grimm

      I can’t remember how many times I started a project full-of-fire but had to order some new parts and tools. When they showed, I’d forgotten what I needed them for, or more often, already had new irons in the fire.

  9. justsayknow

    The issue is inventory. Sadly I don’t believe a physical parts stores can compete long term with the vast supply of the internet.

    1. JTMcPhee

      Too bad that like almost everything else in “trade,” the externalities are not priced into the selling price of the products.

  10. Kk

    It’s great to go down to that little neighbourhood store and buy radio parts and on the way home l must stop at the corner drugstore and buy a coke, you might meet one of the O’Hara boys back from the war and l could buy him a soda and share a lucky strike.

    1. ambrit

      Well, that “war” the O’Hara boy is back from is playing out in the inner ring suburbs of your home town. Why? Because, like so many of us now, the O’Hara boy hasn’t had any work for a few years now. So, when the “Kinetic Resistance” offered him a job ‘pacifying’ suburbs and exurbs, why, he jumped at the chance. Redress long standing socio-economic wrongs and pick up a bit of loot on the side, who could “Resist?”

  11. Scott1

    I was taken to Siler City via highway 64 for a Chicago Style hot dog by my wonderful friend Camille. She is from Chicago.
    We went past the Burlington Airport where Honda is making engines for their Hondajet. Passed a lot of Gun Stores.
    There was even a Pawn Shop the lender of last resort for the poor.
    And low and behold I saw a Radio Shack.
    Next time I go down that way I will be sure to stop in. I need to replace my cassette recorder. There was a pinnacle achievement in the Realistic brand one they sold.
    While it is unlikely, maybe, just maybe they still have it. I am of regret I didn’t buy an amplifier I saw in the store here in the town of Chapel Hill/Carrboro where I live.
    It is likely that those stores that support the young and the old in their pursuit of making real things will stick around.
    It is not surprising that the store I saw was standing alone and not in a mall or “Plaza”. The rent for such locations goes higher and shoves the stores that draw young boys and old men out of business.
    Chicago Style hotdogs are pretty good, though Rochester White Hots are still the best “dogs” I’ve had.

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