
Inside RadioShack's Slow-Motion Collapse (2015) - mastazi
https://www.bloomberg.com/news/features/2015-02-02/inside-radioshack-s-slow-motion-collapse
======
exabrial
Incompetence destroyed this company. There's a maker revolution happening
right now and they can't figure out how to harness it. Imagine if each radio
shack was a hammarspace and had been adding tooling steadily for the last 5
years.

~~~
manyxcxi
I (naively) popped into a Radio Shack about two years ago thinking that they
might have some random electrical parts I was looking for. Once I got past the
cellphones, remote control cars, and junk too cheap to be sold at Sharper
Image, I found the four drawers of parts in the back corner, mostly empty.
Perf boards were like $6/piece, and they sold an Arduino starter kit for like
$200.

I remember the store nearest my house growing up having multiple AISLES of
just power adapters and barrel connectors, etc, and it was a tiny store in a
strip mall sandwiched between a Baskin Robbins and a Subway.

It was certainly a sad realization.

~~~
hkmurakami
Can anyone comment on Fry's component selection these days?

~~~
manyxcxi
The one by my house in Seattle was REALLY good. And had a good selection of
misc. robotics parts (even if at ridiculous prices). The one by my house in
Portland is lighter in some areas but has more Pi/Arduino/etc. variations in
stock.

In both stores it was at least three aisles worth of things like components,
perf boards, various breakout kits, enclosures, etc.

------
nodesocket
Radio Shack is a case of terrible management unable to see the writing on the
wall and adapt. The idea that Radio Shack can't compete against online
electronics stores (such as Amazon) is false. They just failed to focus on a
market and stick with it (specifically electronic enthusiasts).

For example, what if they partnered with Raspberry Pi, and offered a Pi store
inside of Radio Shack where you can buy Pi's, accessories, and talk to Pi
experts. Copy the Apple store experience for this vertical.

According to this post[1], they've sold 10 million Raspberry Pi's. At an
average price of $35 each that represents a 350 million dollar market. While
not huge, there is certainly opportunity to capture accessories. See cell
phone cases as an example.

[1] - [https://www.engadget.com/2016/09/08/raspberry-
pi-10-million-...](https://www.engadget.com/2016/09/08/raspberry-
pi-10-million-sold/)

~~~
jfim
Even assuming they sold every single Raspberry Pi at 100% profit, 350 million
across 5000+ stores is 70k USD per store. Even with a lot of accessories sold,
that's probably not enough to keep the whole operation afloat.

~~~
brianwawok
And why hire someone highly trained to sell a $35 pi, when someone with no
training can sell a $700 iPhone.

There is a reason they tried to switch to cellphones.. needed something easy
to sell and expensive enough to justify their rent.

~~~
mark-r
The problem with a strategy like that is it's hard to be better than everybody
else who has the same idea. Perhaps their mistake was opening so many stores
in the high-rent areas in the first place; it didn't really mesh with their
original core market.

------
sathackr
I went to a local Radio Shack the other day to get a cheap soldering iron.

There was one person in the store, sitting at a fold-up table with a Sprint
table cloth over it. They explained that I wouldn't be able to buy anything
except cell phones because the Radio Shack employee had gone on break.

I've said for 10 years now that Radio Shacks problem was its focus on cell
phones. Employees were highly incentivised to sell phones, and everything else
suffered as a result.

Just as mentioned in another comment...Anyone can sell phones now, and once
that became a reality, they began competing with much leaner business models
that focused on phone sales with much lower overheads.

------
sharkweek
Please read the linked story from SBNation writer Jon Bois (one of the
funniest writers out there), about his time at RadioShack

[http://www.sbnation.com/2014/11/26/7281129/radioshack-
eulogy...](http://www.sbnation.com/2014/11/26/7281129/radioshack-eulogy-
stories)

One of the funniest/saddest things I've ever read.

~~~
sokoloff
Here's another pretty good humor piece on the shack:
[http://www.theonion.com/article/even-ceo-cant-figure-out-
how...](http://www.theonion.com/article/even-ceo-cant-figure-out-how-
radioshack-still-in-b-2190)

------
kabdib
About ten years ago I needed a capacitor for a failed power supply. I drove to
RS, found a replacement cap in the parts bin (which was virtually hidden in a
corner in the back of the store), and went to the register.

The cashier gave me a disdainful look and didn't even want my money. He just
handed the cap back to me and told me to leave with it.

These days I just order parts off of eBay. They arrive in a few days, and
they're really cheap. The parts usually work, too.

~~~
Stratoscope
I recall reading an article a few years ago about RadioShack in that era. It
said that employees weren't just rated according to how much they sold in
total, but also by the _average amount_ of each sale.

So that cheap capacitor would have dragged down this employee's performance
rating and compensation. It was better for him personally to ignore a
capacitor disappearing out of the store than it would have been to ring it up
and take your money.

I wish I could find the article; there was a story in it almost identical to
yours.

In a way this reminds me of when HN used to track not just your total karma
but also your average karma. If you cared about such things, it meant that
every time you posted a comment you had to think not only about whether it was
a worthwhile comment, but also whether you expected it to move your average
karma up or down.

If you had an average karma of 10, then you wouldn't want to post a comment
that you figured may only get 5 upvotes - even though those votes meant that
five people appreciated your comment.

To me at least, HN seems like a friendlier place now that average karma is
gone. And RadioShack would have made more money if they hadn't made their
salespeople worry about lowering their average sale.

But, like some of the wacky schemes I've come up with, it must have seemed
like a good idea at the time.

~~~
soylentcola
Can confirm that this is how it was, at least for the ~6 months I worked there
in the early 2000s. I'd recently been laid off and saw RS was hiring. Being
somewhat technically inclined and having fond memories of the place in my
youth I figured it was as good as any other low-end retail gig while I looked
for something better. This was not the case.

I'm not going to get into any long RS stories but in terms of sales averages,
it went roughly like this as far as I can recall: Actual hourly wage was
around the state minimum but you could make commissions and "SPIFF" bonuses
for selling things like cell phone contracts (since they got a cut of those).
The cell phone thing was straightforward - sell a phone contract, get a flat
amount added to your paycheck.

But the commission thing was awful and things were set up so that it was
incredibly difficult to get commission. You had to sell not only a certain
amount, but rather your average for each day of a pay period had to be at a
certain level in order to even qualify for commission. If you were unable to
hit those goals every day, you got no commission, even if one of those days
you sold thousands of dollars worth of merchandise.

So they would make sure to give everyone at least one or two short shifts a
week or shifts during crappy hours so that it was nearly impossible to make
commission. Combine this with the sales meetings you had to attend out of town
every (month? can't remember) it was almost like you were losing money by
working there.

Thankfully I found some other crap job that at least paid better and in time,
I moved on to better things but man...that place was awful.

------
weq
dick smith - the australian version of radio shack did exactly the thing and
went under last year. they ended up getting bought out by an online retailer.

i used to go into them as a child, do the hobby boards and that pretty much
got me into programming. I stopped going later in life as the electronics isle
got smaller and smaller.

Now we have JayCar -- only sell electronics, long isles of caps and
components. DIY everything. Seem to be going strong! They are semi used by
tradies, but we still have other wholesalers who mainly service that market.

[http://www.smh.com.au/business/retail/dick-smith-closing-
dow...](http://www.smh.com.au/business/retail/dick-smith-closing-down-sale-
the-strangest-saddest-stuff-thats-left-20160428-gogye1.html)

~~~
quanticle
Dick Smith didn't die. It was murdered [1]. Long story short, a private equity
firm bought out Dick Smith from Woolworth's using money that was on Dick
Smith's balance sheet. They did some huge write-offs to lower the (paper)
value of the business, sold inventory at a steep discount to boost revenue,
and then put the company back on the market, with a P&L statement that looked
good, but masked the fact that the company was a husk of its former self. As
expected, investors bit, and the private equity firm walked away with a half-
billion dollars of profit, while the later investors were left holding the
bag.

[1] [https://foragerfunds.com/bristlemouth/dick-smith-is-the-
grea...](https://foragerfunds.com/bristlemouth/dick-smith-is-the-greatest-
private-equity-heist-of-all-time/)

------
chandmk
I always wondered if they supported and built a community of teenagers by
providing classes, competitions on electronics related projects, and computer
hadware, they could have retained a passionate base of customers for long
time.

------
brianprovost
"There are still potential RadioShack customers out there. Some [...] have a
professional need for a disposable cell phone."

Pretty much just drug dealers, right?

~~~
pps43
If you're not doing anything wrong you have nothing to hide?

------
EGreg
They should have mentioned Best Buy's Geek Squad. They had the "get some help
from a guru" covered. That's what RadioShack could have done.

[http://www.bestbuy.com/site/electronics/geek-
squad/pcmcat138...](http://www.bestbuy.com/site/electronics/geek-
squad/pcmcat138100050018.c?id=pcmcat138100050018)

------
LordKano
20 years ago, I used to work for Computer City and they treated us like Radio
Shack's embarrassing little brother.

The writing was kind of on the wall, even back then. Metric and spiff driven
sales staff. They were making quick money without thinking about long term
viability.

They eventually sold off Computer City to CompUSA but I was long gone by then.

------
bsder
Tandy Corporation also had some executives embezzling money, IIRC, but I can't
seem to find a reference on the web about that.

------
jbyers
(2015)

~~~
mastazi
OP here, thanks for the heads-up (I didn't realise it was an old article), I
have fixed the title.

------
hudibras
De rigueur for any HN mention of RadioShack:
[http://www.radioshackcatalogs.com/](http://www.radioshackcatalogs.com/)

