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Yeah, all the booksellers would need to buy all new inventory and lease a new building and hire new staff. Brick and Mortar isn't like firing up a Linode. Amazo

Yeah, all the booksellers would need to buy all new inventory and lease a new building and hire new staff. Brick and Mortar isn't like firing up a Linode. Amazon is basically the Walmart of the Internet.

ChuckMcM 13y ago
That is pretty much it. And in many ways creating a shop setup is easier than firing up a Linode because it has both been happening a lot longer and there are literally hundreds of thousands of people around who work to make that happen. In the US at least there is a quite a bit of excess 'store' space that is not leased. Further it hasn't been leased for a while so there are motivated property owners who will provide customization of the space as part of their 'tenant improvements' or TI. Setting up an LLC had been made more simple by the pre-created legal documents available on the web, Banks are eager to sign up a new business if they are going to process the sales, and there are a number of small business loans currently being pushed by the the US government in order to encourage the economy. For someone willing to drive around town a bit it is possible to get the business created in a week, and with some work probably have a physical store ready to open in a two months, (less if you either start with one that was a book store before or your new landlord was really excited to get the space ready). Setting up a cash register, an accounting and filing system, all of those things have 'cook book' examples that you can just lift and implement like you might your favorite distribution. And initially the only 'staff' you need is you. The only question is whether or not you can get enough customers to buy your books to stay afloat long term. And that depends on other places people can go to get books. As you say Amazon is the "Wallmart of the Internet" because they sell product with lower margins than someone who is paying rent on a store can afford. If Amazon increases their margins (by selling closer to list price) they risk someone like you or I who can sell at that same margin in an actual store. And something the store offers that Amazon cannot is the ability to browse, and discuss various books. (look inside the cover doesn't cut it). The important thing to realize for this crowd, is that setting up a single person shop is as straight forward as setting up a Linode. Yes, it takes more paperwork, and yes it helps to create an LLC, but people have been setting up shops a lot longer than they have been creating businesses on the Internet, what we do here is considered "mysterious gobbledy gook" by a lot of people, opening up a store is much more comprehensible to them. Further there is a lot of infrastructure out there that supports it.
- count 13y ago
  The big difference is CapEx - I can setup a linode with my 'free time' and a few bucks a month to prove out a business. You can't 'free time' a brick and mortar without a substantially larger risk - no bank is going to give a loan and no real estate manager is going to give a lease to a new LLC without personal guarantees from the principals or other backing.
  - ChuckMcM 13y ago
    The big difference is CapEx - I can setup a linode with my 'free time' and a few bucks a month to prove out a business. This is absolutely true, which is why there are many more software business opportunities than there are brick and mortar opportunities, and its absolutely irrelevant in that if you want to create a bookstore (which is the market we're looking at in this conversation) trying to 'out Amazon' Amazon by setting up a Linode instance isn't really going to be very effective. My point is that unlike say "Pintrst for Caviar Lovers" or some other random 'online' business, book stores are already a 'proven' business, just like restaurants are a 'proven' business. If you execute well you succeed. Since the business is already proven/known, there is lots of support/infrastructure for creating it. I'm guessing it would cost you about $500 out of pocket to 'start' your bookstore, maybe $2000 if you went to a lawyer for your articles of organization. People who do technology startups some times overlook how 'easy' that can be.
    - count 13y ago
      > If you execute well you succeed. That might as well be a tautology - if you don't succeed, obviously you didn't execute well. Unless money has gotten tremendously cheaper, $500 seems at the absurdly low end of out-of-pocket to get a business loan/etc.

ChuckMcM 13y ago

That is pretty much it. And in many ways creating a shop setup is easier than firing up a Linode because it has both been happening a lot longer and there are literally hundreds of thousands of people around who work to make that happen. In the US at least there is a quite a bit of excess 'store' space that is not leased. Further it hasn't been leased for a while so there are motivated property owners who will provide customization of the space as part of their 'tenant improvements' or TI. Setting up an LLC had been made more simple by the pre-created legal documents available on the web, Banks are eager to sign up a new business if they are going to process the sales, and there are a number of small business loans currently being pushed by the the US government in order to encourage the economy. For someone willing to drive around town a bit it is possible to get the business created in a week, and with some work probably have a physical store ready to open in a two months, (less if you either start with one that was a book store before or your new landlord was really excited to get the space ready). Setting up a cash register, an accounting and filing system, all of those things have 'cook book' examples that you can just lift and implement like you might your favorite distribution. And initially the only 'staff' you need is you. The only question is whether or not you can get enough customers to buy your books to stay afloat long term. And that depends on other places people can go to get books. As you say Amazon is the "Wallmart of the Internet" because they sell product with lower margins than someone who is paying rent on a store can afford. If Amazon increases their margins (by selling closer to list price) they risk someone like you or I who can sell at that same margin in an actual store. And something the store offers that Amazon cannot is the ability to browse, and discuss various books. (look inside the cover doesn't cut it). The important thing to realize for this crowd, is that setting up a single person shop is as straight forward as setting up a Linode. Yes, it takes more paperwork, and yes it helps to create an LLC, but people have been setting up shops a lot longer than they have been creating businesses on the Internet, what we do here is considered "mysterious gobbledy gook" by a lot of people, opening up a store is much more comprehensible to them. Further there is a lot of infrastructure out there that supports it.

count 13y ago
The big difference is CapEx - I can setup a linode with my 'free time' and a few bucks a month to prove out a business. You can't 'free time' a brick and mortar without a substantially larger risk - no bank is going to give a loan and no real estate manager is going to give a lease to a new LLC without personal guarantees from the principals or other backing.
- ChuckMcM 13y ago
  The big difference is CapEx - I can setup a linode with my 'free time' and a few bucks a month to prove out a business. This is absolutely true, which is why there are many more software business opportunities than there are brick and mortar opportunities, and its absolutely irrelevant in that if you want to create a bookstore (which is the market we're looking at in this conversation) trying to 'out Amazon' Amazon by setting up a Linode instance isn't really going to be very effective. My point is that unlike say "Pintrst for Caviar Lovers" or some other random 'online' business, book stores are already a 'proven' business, just like restaurants are a 'proven' business. If you execute well you succeed. Since the business is already proven/known, there is lots of support/infrastructure for creating it. I'm guessing it would cost you about $500 out of pocket to 'start' your bookstore, maybe $2000 if you went to a lawyer for your articles of organization. People who do technology startups some times overlook how 'easy' that can be.
  - count 13y ago
    > If you execute well you succeed. That might as well be a tautology - if you don't succeed, obviously you didn't execute well. Unless money has gotten tremendously cheaper, $500 seems at the absurdly low end of out-of-pocket to get a business loan/etc.