|Posted on March 19, 2017 at 4:35 AM||comments (0)|
We are currently in a 18 year transitional period where traditional B&M retailers are seeing rapidly declining cash flow due to consumers spending more money in the online marketplace. It is increasingly difficult for large corporate retailers to compete with online competitors due to the overhead, expenses and liabilities associated with operating multiple large locations as opposed to one large warehouse. Smaller Online Retailers can easily enter into the marketplace due to low startup costs depending on industry and product line. Marketplaces such as Amazon, eBay and others like them provide access to millions of potential customers around the globe at costs so low that anyone with just a few thousand dollars can start a home based online retail business.
A similar situation existed in the 1970s and 1980, which is when many large retailers started out. They started out small with one, maybe two storefronts. Companies like Home Depot and Starbucks (for example) were able to expand rapidly and soon had profitable locations across the country and even the globe. Online retailers find themselves in a similar situation because the economics haven’t really changed. Banks still won’t just hand out millions of dollars to anyone with a great business plan. However, the time it takes for an online retailer to have thousands of dollars in steady month to month cash flow is very short. In the case of my business, first month sales were around $600. On the one year anniversary of opening BuildAPrep, I was doing $1,800 on average each month. Keep in mind that my business model involves slower growth for the first 4 years in order to minimize unnecessary risks and expenses while fine-tuning the overall model to achieve long term sustainable growth and a stable profit margin.
eCommerce is the razor blade to the wrist of many brick and mortar retailers in industries such as outdoor recreation. Companies like Gander Mountain built 60 new stores since 2012, taking on a lot of expenses without anticipating that consumers were starting to shop for fishing tackle and outdoor gear online. Stores like Gander Mountain, Bass Pro Shop and Cabela’s are great outfitters but they’re not great enough where I’d spend $150 on a spinning reel that I can get for $120 with free shipping at one of thousands of online stores.
The fact of the matter is that online retailers have lower overhead and therefore can pass that savings onto the consumer. With my business (as an example), I operate entirely out of my home, the basement is my warehouse and I have the ability to carry upwards of $25,000 worth of products without paying rent, insurance or utilities on a separate commercial location. The most time consuming part of my online retail business is fulfilling orders and auditing inventory. It takes me roughly 2 minutes to pick an item, pack it, print a postage label and stick it to the package. All orders get dropped off at the post office between 4pm and 5pm. So if I had 80 orders to pack and ship each day, it would take me roughly 3 hours to pack and ship all of them.
The median salary for a warehouse worker is $27,561 while the median salary for a sales associate is $39,817. In many locations around the US, warehouses can be rented for as little as $1 per square foot. I have looked at warehouses and brick & mortar locations that are for rent in 4 different states and what I found is that the monthly cost of renting a 5,000 square foot warehouse is often the same as renting a 3,000 square foot retail location. The cost of pallet racking vs the cost of gondola shelving and displays are around the same. The cost of your inventory is the same regardless if you go with an online business in a warehouse or a brick and mortar retail location. Utilities and internet/cable costs will vary but retail stores tend to focus on shopping in a comfortable climate more than warehouses do. Although there are many, many variables to the costs of running any type of retail business, the fact is that property and employees are less expensive if you operate an online business out of a warehouse. This means that you, the owner, either have increased profitability or more money to put back into your business for growth. In theory, a new online business can grow faster than a new brick and mortar business because of this.
I believe is that we are in the last part of this 18 year transitional period (2005-2023). During these 18 years, major brick and mortar retail stores peaked and started to decline, while online sales increased and have yet to peak. The shift in consumer spending leads me to believe that the traditional economy will soon die. Major retailers such as Sears and Macy’s are Anchor Stores at shopping malls. These Anchor Stores occupy massive amounts of square footage and have very expensive leases. These leases amount to a large percentage of the rent that the property management receives from its tenants. When these major retailers go bankrupt and their locations at the malls close, the mall property management will lose revenue that they need to keep the entire mall open. If they cannot find new tenants to occupy the tens of thousands of square footage; they will eventually run out of money and the malls will close down.
I believe that in 2018, online sales and brick and mortar sales will “collide” at a point which rings in the new age of consumerism while signaling the end of corporate brick and mortar stores. The stores that are already tinkering on the edge of bankruptcy will lose the confidence of their investors as well as the funds and banks that have been keeping them afloat. Stores such as Sears will have no choice but to either file for bankruptcy or liquidate a substantial amount of their locations, inventory and equipment in order to prop up their most profitable locations on the hopes that they can avoid complete collapse.
I base all of this off of my instincts as well as data collected on a handful of “indicator” companies and consumer spending statistics between 2004-2016. I compared the stock prices of several major corporate retailers (indicator companies). I looked at what they closed at on their peak, and then what they closed at on March 17th 2017. The companies I chose as Indicators of the pending B&M collapse all follow a similar trend of ups and downs. Due to the consistency of this observed trend, I believe that it is a reliable measure of overall performance of B&M corporations. These companies are:
What I noticed about these companies:
Their stock prices peaked within the same 12 month timespan (May 2006 to April 2007). Note: Two of the companies hit slightly higher peaks in 2015 but not where I’d consider it a major variable to my model.
All have over 800 locations. Macy’s has the lowest number at 888 stores.
All have faced financial struggles over the last 3 years which are only increasing.
Two of the indicators which I believe will be out of business sometime before 2020 are Sears and Jc Penny’s. Sears Holdings Corp. stock was at $125.19 on March 18th 2005 and was at $9.05 on March 17th 2017. Jc Penny’s stock was $85.25 on February 16 2007 and was $7.02 on February 17th 2017. After carefully reading numerous articles about the financial health of those two companies, I then researched the other indicators to see if I could find a pattern or trend. One factor that was consistent in everything I read was that eCommerce is a massive thorn in the side of brick and mortar corporate retailers.
As much as I hate to admit it, Amazon is being blamed for much of the raping and pillaging of the traditional retail marketplace. I personally don’t care for Amazon and I think their stock value is inflated because Bezo’s is high on his own success and promises the whole sundae to investors; when he realistically cannot even provide them with hot fudge or sprinkles. For Example, Amazon Locker is void of all common sense and the idea of an Amazon convenience store (Amazon Go) sounds great, but good luck competing with established convenience stores like Cumberland Farms and 7 Eleven. Bezo’s seems to rely entirely on initial hype and the cult following that Amazon has among the west coast fart-sniffing techies who dream of some asinine utopia forged by Elon Musk and Jeff Bezos. Drone delivery is a bust and anyone who understands logistics as well as radio control technology understands why. If you were to estimate what Amazon’s realistic stock value is, I’d say that it is no more than 4.2x that of eBay.
In conclusion, traditional retail is on the decline especially for large corporate retailers. Consumers are spending more and more money online, especially during the holiday seasons. According to Statista, Consumers spent $63.1 Billion dollars online in 2016 compared to $19.6 Billion spent online in 2005. UPS and FedEx stocks have been steadily on the rise since 2009 and I believe this is entirely related to eCommerce spending. Logistics are how the products get from the business to the customer so obviously, companies that profit off of the shipment and delivery of these products would be making more money as a result of eCommerce. The internet will empower small business entrepreneurs and allow them to live the American dream like never before by enabling them to start a easily business that, if run properly, can be very profitable within the first 3 years. Large corporate retailers are stuck in the pre-internet age and they will be dead and gone in a few years. Yes there are dire consequences and there may even be a sort of economic collapse as a result of so many businesses going bankrupt within the same period of time. However there is nothing we can do except that consumers are changing the way they spend money. It is as simple as that and businesses need to adapt if they want to overcome. Will brick and mortar stores become extinct? I don't believe so but the stores of tomorrow will look entirely different from the stores of yesteryear.
|Posted on August 21, 2016 at 10:30 PM||comments (0)|
For whatever reason, the idea of having 3 days worth of food, water and supplies in your emergency kit has become front and center of the preparedness world. To be blunt, the only people who believe that 3 days worth of supplies is adequate are people who never have been affected by a disaster.
I have dedicated my life to preparedness and studying natural disasters, mainly hurricanes and blizzards. I will not say that I was a victim of several disasters but I was effected by several disasters. Hurricane Irene is just one that I use as an example so often because I was literally driving around during the storm as it hit my home town and because I was in the field helping with the recovery for the first 30+ hours. I saw power lines snapping, transformers burning, trees falling, basements flooding. I heard countless tones dropping over the scanner as 911 calls came pouring in. We were without power for over a week. A tree fell across our street during the storm; it was not cleared until the 4th day after the storm passed.
Right now the state of Louisiana is just beginning to recover from the worst flooding since Hurricane Katrina. This disater began roughly 6 days ago. If you were living in Livingston, Baton Rouge or any of the affected areas and had just 3 days worth of food and water; hopefully you wont make the same mistake twice.
To date I have studied over 200 major disasters from hurricanes to eathquakes. In the majority of all natural disasters, as well as economic ones, 72 hours worth of supplies Is not enough.
How should you really prepare?
The first question you are going to ask yourself before you start buying supplies is, "What should I prepare for?" To answer that, you need to look at your location. I'm not talking about your street address, I'm talking about the Region you live in. Someone in Wyoming probably doesn't prepare for hurricanes just as someone in Florida likely doesn't prepare for a blizzard. The United States is massive and has all sorts of different topography and climates. Some disasters affect certain regions more than others. Wildfires for example, the West sees many large wildfires each year while here in Connecticut, we only get the occasional 10 acre brush fire. What is interesting is that droughts, one of the main conditions that lead to brushfires, can occur pretty much anywhere. Earthquakes happen all over the world but some areas are threatened by them more than others. If you live along any major fault line, you should prepare for an earthquake. Some disaters, like hurricanes, can be located, measured and tracked before they hit land. This gives people in the soon-to-be affected areas time to prepare or evacuate. Other disasters such as earthquakes come without warning and even if there is warning, the time to prepare or evacuate is usually very short. There are many variables with every type of disaster which makes them all the more dangerous. The National Weather Service can see a severe storm on their radar but they cannot predict when and where a tornado will form.
Any disaster that could, has or will effect your area should be considered a Threat.
Once you assess the threat(s) to you and your area, begin preparing by organizing the supplies you already own. Take stock of the water, food, candles, medicine, first aid supplies and so on. Some would say to put all your "Preps" in one place that way you always know where they are when you need them. This is a good idea but where you store your supplies isn't as important as how you store them. As a general rule of thumb, all emergency food and water supplies should be stored in a cool, dry location that is not in direct sunlight; such as a basement. From there, decide on a Stockpile Duration. This is how long you believe you will need to be prepared for. Don't prepare for the minimum, if a disaster could affect you for two weeks, put together a 1 month emergency kit. From there, it is time to start buying what you need. Freeze dried emergency food can be costly, luckily most store bought foods will safely store for 1-5 years. From experience, "best buy" dates are just words printed on a package. I have opened a 3 year old bag of potato chips and they were crispy but not as flavorful. As long as the packaging remains intact, the contents should be fine. Dry cereals will likely store for 10+ years and I have seen dry grains such as rice store safely for 20 years. If you are on a budget, I recommend buying extra food for your stockpile gradually. Add an extra box or two of cereal and a few more cans of veggies each time you go shopping.
Personally, my family emergency food supply consists mostly of store bought foods and I only have a few buckets and cans of freeze dried foods. It's funny, being both a prepper and a businessman because it is difficult for me to pitch a product to you that I wouldn't buy myself. Water rations are one of those Preps that I have but only for backpacking and in the car. For my household supply of water, I just buy cases of bottled water. This is because a case of 5 year water rations can cost around $30. A case of 64 water ration pouches has the same water content as one case of 24 bottles of water. A case of bottled water is only $4.00 or so depend on brand and applicable sales tax. Water Rations were not really intended for storing in your basement, they were intended for use in maritime survival kits, which is why they are endorsed and approved by the United States Coast Guard and several other foreign maritime agencies. I will sell you water rations if you want them though, I am a businessman afterall. I also know that everyone prepares differently.
I will list some other supplies you could add to your kit, but understand that there are thousands of products you can buy for your emergency stockpile.
-Flashlights, chemlights and lanterns
-Cordage or strapping and tape
-AM/FM/NOAA Weather Radio
-First Aid Kit
-Toys, games and reading materials.
BuildAPrep was started with the idea of helping people and families build an adequte emergency kit that meets their wants and needs. If you would like help putting together an adequate emergency plan, we offer free consultations. Please email us or message us on Facebook for details.
|Posted on August 18, 2016 at 10:25 PM||comments (0)|
It is difficult for me to write this while abstaining from the uncomfortable truths associated with recent events around our nation. We are currently dealing with two major natural disasters in two regions. Historic "1,000 year rain" flooding in Louisiana and parts of Texas as well as out of control wildfires in California.
Before I continue, it is important to understand several important pieces of my thought process:
-I have no faith in the federal government whatsoever.
-I keep things simple and logical, not emotionally driven.
-My agenda isn't political, it is driven by common sense and reality.
-I study, with extreme passion, natural disasters and the human response to them.
Also, please note that all source and reference material will be scatted in the blog or will be linked at the end of this post.
So heres the deal, over 130,000 people are going through hell right now, either because of water or because of fire. Their homes are either greatly damaged or totally destroyed and their lives will never be the same again. According to press releases and articles from FEMA (sources linked at end of post), 70,000 people in NOLA so far are expected to apply for federal relief. I am unsure as to the numbers out west. Do I sympathize with the victims of the flooding? No. I will not pretend that I know what they are experiencing, I will not fake compassion for them. Factually, people die in almost every natural disaster. Whether it is an earthquake, a flood, hurricane or wildfire there will most certainly be damage, death and destruction. When asked the question, "how could the people of NOLA been prepared?" The answer from the pundits and knee-jerk reactionaries is, "Nobody could have seen this coming." That's a load of BS. You live below sea level and are confused as to how you are a victim of flooding? The number of people who did not have flood insurance is staggering and these people will now be dipping into your wallet via FEMA (DHS). Because thousands of people chose to be ignorant, taxpayers across the nation will be forced to help them rebuild.
NOLA is sinking further into the ground due to Subsidence just as quickly as the Army Corps of Enginneers can build new levies. The question everyone should be asking themselves is, how much is NOLA really worth? We cannot win a war against Nature. The Earth will change no matter how much money the government spends. This isn't global warming, this isn't because of Fracking. This is Creation, this is Nature. if it were up to me, NOLA would be turned into another Everglades or a massive seaport. Let's say that floods like this one only happen every 100 years. That means that the people living there in 2116 will have to deal with the same disaster as the people living there right now are. Personally from the research I have done, I believe Louisiana will be hit by major disasters ever 15 years on average depending on solar activity and global weather patterns. There is plenty of science to support that the weather we are seeing over the last few years is part of a pattern that lasts a decade or so. The problem is that it is not a perfect science and that is because the earth moves at it's own pace.The only thing we can do is prepare for when the Shit Hits The Fan.
I am extremely familiar with the, "It will never happen to me" mindset. After Hurricane Irene, I asked my father if we should buy a generator and store more food, water and supplies. My father replied, "These disasters only happen every few decades, so it's not something to really worry about." Oh, look at that. Hurricane Sandy hits us again, the very next year. I will admit that no other major storm has hit us up here in Connecticut since Sandy but the fact of the matter is that you can either pay a little now and get prepared, or be ignorant and pay a lot when the Shit Hits The Fan. Humans are not at fault for these natural disasters (with the exception of the Arsonist who was recently arrested and charged with setting several fires in Northern Californa http://abcnews.go.com/US/northern-california-arson-suspect-court/story?id=41451733) Other than this and every other pyromaniac, nature has it's own schedule. The randomness of nature is what makes it beautiful and dangerous. Whether we like it or not, it's going to rain. If and when 10+ inches of rain fall in a few hours is something nobody can predict. This is why it is critical that state governments take proactive, not reactive approaches to mitigating nature. If people spent more on preparing, they would save themselves thousands of dollars and many hours of depression and sadness.
The media needs to get onboard with Preparedness but they wont, because sobbing victims and caskets floating around gets more views than oh lets say, interviewing the many Preppers who are high and dry because they aren't ignorant. http://www.shtfplan.com/headline-news/floods-watch-this-prepper-save-his-home-from-encroaching-water_08152016 and this one http://abcnews.go.com/US/mans-concrete-home-survives-raging-wildfire-washington/story?id=33286398
Using logic, we can declare it to be an undisputed fact that the earth is always changing. For example:
The Rocky Mountains formed due to tectonic plate movement millions of years ago.
-Question: Do tectonic plates still exist and move?
Therefore, because the earths tectonic plates still move, eventually the Rocky Mountains will either move or change. New mountain ranges may even develop over time. The topography of the Rocky Mountains has an influence on weather patterns, therefore it is logical that if the Rocky Mountains were to change, so would the weather patterns (such as the Chinook Winds).
The real tragedy here is that, despite all the evidence available, the majority of Americans will never take steps to become prepared. Willful ignorace is pathetic and is a drain on our economy and society. I was listing to Andrew Wilkow today and he said something very interesting (I'm paraphrasing from memory of what he said), "Being one step ahead makes you a leader, being two steps ahead makes you a conspiracy theorist." Preppers are often viewed as crazy but the reality is that we just aren't naive enough to "wait and see." Personally, I can't afford to replace many of the things I have in my house; but I can afford enough sand bags to surround my house. Let me put that in dollars for you. What would you rather do? Spend $600 on 5,000 sandbags "just in case" a flood happens, or spend $15,000 replacing everything in your basement and on the ground level of your home because "Nobody imagined a flood like this could happen here."?
|Posted on August 7, 2016 at 1:00 PM||comments (0)|
Zika is in the media every day now. I have been following this issue since early this year and at this point, I can tell you that this crisis is all hype.
According to the CDCP there are fewer than 1,000 cases of Zika each year. The reality is that nobody knows the true numbers because it is highly likely that many cases go unreported due to the mild symptoms that affect majority of patients. The symptoms include fever, rash, joint pain and red eyes. Then there are the extremely rare cases of Guillain-Barré Syndrome which can cause paralysis as well as Microcephaly which can cause birth defects where the child is born with an abnormally small head. Here's the thing, although the majority of people who become infected with the Zika virus experience no serious symptoms or issues, Microcephaly is scary. As a father I can imagine the emotional pain that parents of an affected child would go through. Every parent hopes and prays that their child will be healthy and normal, I know that for the 9 months prior to the birth of my daughter, I was overwhelmed with anxiety every time my fiance was even just a little bit under the weather. I made sure she did the proper pre-natal care and all of that.
Back to the virus. The fact of the matter is that both Zika and Microcephaly are extremely rare. Despite this, the government and many activists believe that we must spend billions to combat it. Some Left wing pundits say to blame the politicians. I have not seens this level of hype and urgency expressed from the psuedo-intellectuals on any other topic other than Climate Change. Let me make this simple, politicians are not the problem, Hispanic migrants are. Go and look at every case reported and every woman with a "zika baby." They are all Hispanic. Most of the cases, specifically two cases right here in Connecticut, a woman traveled to the Dominican Republic and contracted Zika. Another 17 year old pregnant woman contracted it in Honduras where she visited her fiance. Zika has everything to do with immigrants from Hispanic countries just as new cases of antibiotic resistant Tuberculosis are with migrants from the Middle East.
There is nothing to fear but fear itself.
According to the NHTSA, 28 people die every day as a result of drunk driving accidents. Any one of you could become one of thouse 28 victims. Are you going to cut up your drivers license and sell your car out of fear? Of course not, so then why do the government and many media activists believe travel advisories are needed? Personally, I've had my drivers license for 11 years and I have been in 7 accidents, 5 with airbag deployment, 3 I was injured in; all caused by other drivers. I have yet to fear the open road. I spend a lot of time outdoors and so far I have counted at least 15 mosquito bites, mostly on my legs since June. I just so happened to develop a rash on my right wrist as well as red itchy eyes a few days later. Yes, the thought of Zika crossed my mind but I wasn't about to whip out my insurance card over symptoms of what was more likely to be seasonal allergies. About a week later, the symptoms went away.
All the hype and "warnings" from the "professionals" have all failed the test of time. Zika is not spreading in any way that poses a health danger to the public. Zika is not resulting in hundreds of new cases or fatalities. It is August and in a few months most of the United States will enter Winter, where temperatures will fall as will the mosquitoes. The same people who are claiming that Zika will be the next Ebloa are idiots. Remember Ebola? Yea that horrible scary fever that all the smartest people in the room claimed would kill millions? Turns out that there were only a handful of cases here in the US. I find it interesting that like Zika, Ebola originated in a foreign country and the cases here in the US, were from people who traveled to Africa, got infected and came back home with it.
Here's the solution.
The best, most efficient way to stop Zika is to unleash armies of Bats as well as recommend that people eliminate puddles of standing water from their property so that mosquitoes cannot breed. Use chemical insect repellents and equipment such as Foggers to kill large swarms of mosquitoes. The government frankly needs to get out of the way, the pundits need to shut the hell up and people need to do what they have done every other summer to repel mosquitoes and other pesky insects. Being afraid to travel because of the extremely low chance of getting sick with Zika is silly.
What we don't need is more Genetically Modified Mosquitoes, like the ones Oxitech has created to combat the Zika mosquitoes. Zika originated from GM Mosquitoes according to many scientists and conspiracy theorists. From the research I've done, messing with nature by creating new species or types of a species is simply a bad idea. I anticipate the congressional hearings when the unintended consequences start to pile up.
|Posted on June 18, 2016 at 10:50 PM||comments (0)|
First, I want to say thank you for coming to BuildAPrep. I work very hard to earn your business and trust both as businessman and a prepper.
What makes BuildAPrep different than my competitors?
Both new preppers and seasoned preppers fall victim to misleading or false information. The internet that we rely on for so many things contains everything imaginable; accessible with a few keystrokes and clicks. When we have a question we often head over to Google, Bing, Yahoo etc and search for an answer. Because anyone can publish information to the web, it is important to remember that search engines will produce results that contain both true and false information. We all read blogs, watch YouTube and scroll through pages of social media posts; but how reliable is the information? Don't believe everything you read or hear. Bad or false information, especially regarding preparedness, can wind up costing you big time. What scares me is that there are so many popular websites that are seen as libraries of knowledge and fact based information when in fact, they perpetuate nonsense and host articles written by total morons. Prepper Theory is one of those extremely dangerous genres that is percevied to be reliable. The reason I believe Prepper Theory is so attractive to many preppers is because it validates what the reader already thinks or wants to hear. Theory is just that, theoretical. Maybe some of it is rooted in reality but the majority of it is simply based on applying the knowledge at hand to hypothetical scenarios with infinite variables.
Gear reviews. Unboxings are not legitimate reviews. Anyone who tells you how great a product is without actually testing it out, is getting paid to push that product. Just check their description and if a link to an Amazon affilate store is there. If a channel has no negative product reviews, or they just talk about why you should buy the product, turn them off. I've tested hundreds of different products over the years and each product has at least one flaw. I've reviewed tactical hats that look well made, but 5 months later they are falling apart. I've also never reviewed a product that I haven't used or worn for at least a month, sometimes with gear like boots or backpacks, I wont publish a review for months.
I speak from experience. Unlike many of the channels and blogs with millions of subscribers, I don't have any real incentive to do any of this blogging stuff. I don't get paid by a company to push products or concepts. I am doing this because you deserve the truth. I'm not going to tell you what you want to hear, I'm going to tell you what you need to hear, the information that will help you survive. The reviews I publish will be of products that I carry in my store and obviously, I want you to shop with me. My word is my brand and my brand is my livelihood. My goal is to build a bond with you as a fellow prepper, not just as a customer. When the Shit Hits The Fan, I want as many people to have the right supplies and knowledge to get through the worst of it all.
You will be much better prepared with BuildAPrep; I guarantee it.