Retailers & Distributors

Amazon Threatens Distribution

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Amazon has proved itself a significant etailer in major markets across the world, and technology, including mobile accessories, is increasingly a strong category for the company. However recent moves into the wholesale business in the US through its Amazon Supply arm, highlighted by an in-depth Forbes article, suggest a much more disruptive move by the giant.

Amazon has proved a lucrative channel for accessory vendors, distributors and resellers in the countries it addresses in Europe. These are currently the UK, France, Germany, Italy and Spain. Vendors and distributors have have often been successful with Amazon themselves, while resellers have been able to extend their reach through the Amazon Marketplace. In all cases, understanding how Amazon operates, and working wisely within these frameworks, has been the best recipe for success.

Amazon Supply

The Forbes article highlights Amazon Supply as the unsung initiative that could threaten wholesalers and distributors in every category Amazon covers. Amazon Supply leverages the company’s scale, logistical excellence, and low margin business model to offer access to much of its catalogue at wholesale pricing.

Vendors and distributors in the US are already starting to review their relationships with Amazon. For many distributors, the company is a good customer, while vendors have longstanding distributor partnerships to consider. The potential for conflicts of interest are significant, and how much these are a concern to Amazon remains to be seen.

Amazon Supply has not launched in Europe yet, but is an initiative worth tracking, in particular by distributors. A good time to review the fine print in those Amazon agreements perhaps.

Go Forbes on Amazon Supply

Go Amazon Supply

Go Amazon Services Europe

Dixons-Carphone Warehouse Merger Update

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Following the 24 February announcement of a possible Dixons-Carphone Warehouse merger further details emerge on the situation-- the Takeover Panel grants a negotiation extension.

Dixons CPWInitially the Panel set a 24 March deadline for the deal to create a mega CE retailer worth around £3.5 billion. However the retailers "require more time to evaluate a potential merger of the two businesses," and thus deadline has been extended to 19 May 2014.

"Discussions are still ongoing and there can be no certainty that a firm offer will be made," a joint statement reads.

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Russia's Megafon Returns to iPhone

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Second-biggest Russian operator Megafon returns to the iPhone after 5 years of break, with plans to buy "at least" 750000 iPhones from Apple over the next 3 years for resale purposes. 

MegafonReuters reports the Russian operator is also committing around $28 million (1 billion rubles) on iPhone marketing, advertising and promotion over the 2013-2016 period.

Megafon stopped carrying iPhones in 2009 following a sales guarantees dispute. Vimplecom, the 3rd biggest Russian carrier, signed a similar deal back in Q3 2013. 

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RadioShack to Close 1100+ U.S. Stores

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Sales fell 20% to $935.4 million during Q4 2013, while the retailer's net loss hit $191.4 million. It was the 8th consecutive quarterly loss. And sales at stores, the ones open at least a year, sank 19%.

Radio Shack front

So what do you do? RadioShack's new management plans to close up to 1100 stores. Which stores get the axe will be determined by location, area demographics, lease duration and financial performance.

The average size of a RadioShack store is 2426 square feet. That compares to Best Buy with 1200 square foot Best Buy Mobile stores as well as 20,000, 30,000 and 45,000 square foot Best Buy big box stores.

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Dixons, Carphone Warehouse in Merger Talks

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Dixons and Carphone Warehouse confirm discussions are taking place on a possible merger between the two companies-- one creating a mega CE retailer worth around £3.5 billion.

Dixons CPWHowever a press release insists "discussions are at a very preliminary stage and there can be no certainty that a transaction will be forthcoming."

Carphone Warehouse is the biggest of the two retailers, with a market capitalisation of £1.8bn and around 2000 stores in 7 countries. Dixons is valued at £1.7bn and has 1154 stores spread across 12 countries.

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