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Offline 360c

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I think the Chemist Warehouse model will spread to other markets, the domain realestatewarehouse.com.au is taken along with a lot of other "warehouse" names.

I don't think you understand how Chemist Warehouse works.



Offline dodger

  • Tommy Gunna

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Sorry I should choose my words more carefully, I didn't mean their exact model I meant it in the sense that you take a market and blitz it with discount outlets.
With real estate there's no stock so it would be a chain of agencies with heavily discounted fees. Other industries could be targets so far it's chemists and hardware.



Offline Fil-Ski


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Sorry I should choose my words more carefully, I didn't mean their exact model I meant it in the sense that you take a market and blitz it with discount outlets.
With real estate there's no stock so it would be a chain of agencies with heavily discounted fees. Other industries could be targets so far it's chemists and hardware.
With bright yellow and black colour scheme?



Offline 916senna

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Sorry I should choose my words more carefully, I didn't mean their exact model I meant it in the sense that you take a market and blitz it with discount outlets.
........
optometry (sp?) is another example with spec savers etc etc



Offline 360c

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Sorry I should choose my words more carefully, I didn't mean their exact model I meant it in the sense that you take a market and blitz it with discount outlets.
With real estate there's no stock so it would be a chain of agencies with heavily discounted fees. Other industries could be targets so far it's chemists and hardware.

Fair enough; but Chemist Warehouse is a bit different from that model. Essentially they have the image of being cheap by painting the stores up like a JB HiFi store of old. They use some departments  (like scripts) as loss leaders to get people in the door. Then they entice them to buy heaps of retail stock while they are there. In the retail area they cherry pick lines to discount (at the suppliers expense) whilst the rest is often more expensive than competitors. Looks damn cheap; but may well be anything but. Their margins through economies of scale and selective discounting are surprisingly high.

With Real Estate you have no range of services to discount, so nothing to subsidize the loss leaders. You essentially have your sales book and your property management book and little else.



Offline dodger

  • Tommy Gunna

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For those wondering what this has to do with cars, the recent events on the share market took over last week and we already have a thread on real estate but I thought this deserved a thread on it's own.
I'll post further when I buy something...... :rolleyes:



Offline 360c

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For those wondering what this has to do with cars, the recent events on the share market took over last week and we already have a thread on real estate but I thought this deserved a thread on it's own.
I'll post further when I buy something...... :rolleyes:

I am always interested in learning about the nuts and bolts of any business. I don't reckon an Uber model will work in this industry; but I do agree it is ripe for a shakeup. Fees vs service provided seems way out of kilter to me.



Offline dodger

  • Tommy Gunna

  • Joined: Dec 2009

  • Location: Melbourne
Fair enough; but Chemist Warehouse is a bit different from that model. Essentially they have the image of being cheap by painting the stores up like a JB HiFi store of old. They use some departments  (like scripts) as loss leaders to get people in the door. Then they entice them to buy heaps of retail stock while they are there. In the retail area they cherry pick lines to discount (at the suppliers expense) whilst the rest is often more expensive than competitors. Looks damn cheap; but may well be anything but. Their margins through economies of scale and selective discounting are surprisingly high.

With Real Estate you have no range of services to discount, so nothing to subsidize the loss leaders. You essentially have your sales book and your property management book and little else.

They're clever no doubt about it, but the smart consumer can also cherry pick and some of their lines are very cheap, fragrances, some vitamins and selected specials.....but most consumers will save a few bucks on the script and give it all back picking up other stuff on the way out I agree.

Real estate fees are over the top now so they can discount all their services quite comfortably, with the price of houses now the consumer would surely be wondering why they are paying 10's of thousands to sell.

We all know the advertising is mainly for the benefit of agents to list property, I think someone will come along and shake the industry up.



Offline dodger

  • Tommy Gunna

  • Joined: Dec 2009

  • Location: Melbourne
I am always interested in learning about the nuts and bolts of any business. I don't reckon an Uber model will work in this industry; but I do agree it is ripe for a shakeup. Fees vs service provided seems way out of kilter to me.

The Uber model wont work in every industry but multiple discount sores will fill that gap.

JB Hi Fi is another, you cant go anywhere else to buy a CD or DVD really.....now they're into many electrical goods not just TV and Hi Fi but the best example is Bunnings, when's the last time you saw a local hardware store ?

Discounting traditionally high expense items whether it's services or goods is certainly on the rise.



Offline B2

  • Slowest Ferrari Owner

  • Joined: Apr 2008

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optometry (sp?) is another example with spec savers etc etc

Aaaarghhhh!!  You're right there Jon.  I am a very loyal person and always go to the same people wether it be suppliers at work or my local pharmacy/optomertrist etc.  They know me (and my family) by name.  I'm a Prada man and wanted a set of Prada frames for my reading glasses but they are only availabe through the big stores now!!!!

Just a footnote.  The Italians now style.  It's in their DNA.  They always dress well and look good.  I try to follow in their footsteps when not in my flanelette shirts. :)



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