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This seems like a really good thing for the dealership. They are able to operate with ~0 inventory and ~0 inventory holding costs.
by KiranRao0 5y ago
This seems like a really good thing for the dealership. They are able to operate with ~0 inventory and ~0 inventory holding costs.
- eru 5y agoAmazon famously has (or had?) something like negative inventory on the books. To be more technical, it's negative working capital, or negative cash conversion cycle. That's because in whole-sale you typically have something like 90 days to pay your bills. But Amazon sells its inventory on to retail customers (who up front) before those 90 days are up. Now, if I describe it as 'negative working capital' it sounds like some desirable thing. But the flip side is that you can also describe it more mundanely as: Amazon gets loans from its suppliers.
- clairity 5y agowalmart pioneered negative working capital for retail well before amazon existed (70s-80s iirc). it's how walmart jettisoned itself into a retail juggernaut. carrefour cribbed that part of the playbook from them to expand across france and europe, and bezos very likely did so as well. it only works when you have enough monopsony power to persuade/coerce the supply chain into cooperating.
- eru 5y ago> it only works when you have enough monopsony power to persuade/coerce the supply chain into cooperating. What makes you think so? If you offer attractive enough terms, you can get financing from your suppliers just fine. And what makes you think Amazon, Carrefour or Walmart etc have monopsony power?
- Andys 5y agoThe Tesla model. I wonder if any of them will realise they can just sell cars without a flashy dealership showroom with sales staff and demonstrators?