November 12, 2013

Dear Catalog CEOs: Amazon + USPS = You Do Not Count

Dear Catalog CEOs:

Well, you've been humiliated once again (click here please).

You sold your wares on Amazon, teaching Amazon what sells and what doesn't sell. Amazon used that information, and is now headed toward $100,000,000,000 (yes, that's one-tenth of a trillion dollars of annual sales ... it will take less than three years to get there at current growth rates). In a total market where growth is at or less than inflation, that level of sales volume has to come at your expense, don't you think?

Meanwhile, you are busy lobbying a dysfunctional Congress to keep the USPS viable. You are fighting to help the USPS, because, of course, helping the USPS stay viable allegedly keeps your business viable.

And while you're busy lobbying to help the USPS (spending your time helping the USPS, not spending that time selling your own wares via e-commerce - how silly is that when you stop to think about it), here's what the USPS thinks of you:
  1. Considers ending Saturday delivery of your catalogs.
  2. Strongly considers significant postage increases - charging you significantly more for the same level of service.
  3. Provides your biggest competitor, a non-cataloger named Amazon, a business that does not fund the USPS via the kind of postage you pay, exclusive Sunday delivery of their products in major markets (NY/LA this year, many more next year), helping run you out of business even faster.
How utterly feckless can our industry be? 

I mean, you paid postage for decades - decades! You funded the pensions of the very Executives who decided to sell out to Amazon - and I get it, Amazon is getting close to being bigger than all of us put together, it's hard to blame the USPS. But come on! Do you treat your loyal customers this way?

This tells us that the future of the USPS is not the mailing of pieces of paper - it's the delivery of merchandise. When viewed via that perspective, Amazon should get top priority.

Merchandise.

Remember, you funded the USPS so that they could get to this point where they pivot to serving Amazon better than they serve you.

Our industry is Charlie Brown, with the USPS + Amazon playing the role of Lucy, pulling the football out at the last second of an attempted kick.

It's common for postage to represent 5% to 10% of annual net sales - often equal to 50% to 80% of all other fixed costs incurred by your business. Think about that whopper of a statement for a moment. You spend more on postage than almost anything else.

How has your loyalty been recognized by the USPS?

When are you going to stand up for yourselves and say "ENOUGH"?

As Lucy says at the end of this video ... "Isn't it peculiar, Charlie Brown, how some traditions just slowly fade away?" (click here for the video if you follow via email or RSS). The USPS/Amazon Sunday partnership helps facilitate the evolution of our tradition. 

Only you can fix this. 

You know what you have to do to evolve. Your future involves spending much less money with the USPS. Time to get busy. It's clear the USPS and Amazon don't care about you. We knew Amazon didn't care. Now we know how the USPS feels about you. Get busy.