“Radio Shack lost its way when it ditched its hobbyist customers” @TheEconomist @radioshack #makerbusiness

Radioshack Logo 20131-1-1-1

Difference engine: Making it | The Economist.

Could Radio Shack have prospered if it had stuck with its loyal band of hobbyists? Fry’s Electronics certainly did. Since its founding in 1985, Fry’s has managed to do all that Radio Shack ever dreamed about: sell consumer electronics, household appliances, mobile phones, computer hardware and software—as well as electronic components and circuit boards, while also offering in-store hobbyist advice and repair work.

Most electronic hobbyists have long since abandoned Radio Shack for shopping online or, if in a hurry, the well-stocked aisles of electronics superstores like Fry’s. All too often, your correspondent has found himself going to Fry’s for a $7 cable, only to come out with a new motherboard that was on special offer, plus a further eight-gigabytes of memory—happily handing over $150 or more for the pleasure in store. That is the kind of fat-margin business Radio Shack abandoned for the cut-throat world of selling mobile phones.

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  1. http://www.lewrockwell.com/2014/07/eric-englund/radioshack-is-going-bankrupt/

    The problem is they made over 2 billion dollars over the past 10 years, but bought back 3 billion dollars of stock. They would likely be solvent if they didn’t burn that extra billion. It has nothing to do with makers, electronic, whatever, the people running the company stripped the assets for wall street.

    Year Net Profit Stock Buybacks
    2000 $368.0 $400.6
    2001 $166.7 $308.3
    2002 $263.4 $329.9
    2003 $298.5 $286.2
    2004 $337.2 $251.1
    2005 $267.0 $625.8
    2006 $ 73.4 $0
    2007 $236.8 $208.5
    2008 $189.4 $111.3
    2009 $205.0 $0
    2010 $206.1 $398.8
    2011 $ 72.2 $113.3
    2012 ($139.4) $0
    2013 ($400.2) $0
    Totals $2,144.1 $3,033.8

  2. Fry’s found new markets but Radio Shack didn’t.

    Amazon was cheaper with Prime and Radio Shack’s products were marked up because you were paying a salesman and high mall rent.

    The only time I saw Radio Shack busy was on Black Friday selling SD cards for $5 but that doesn’t pay the rent.

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