With the advent of the Motor Car at the turn of the century horse drawn carriages soon turned obsolete.

There was a time - a time long gone when People who still rode on horses or in horse drawn carriages saw with curious surprise the appearance of the motor car. How come a mean machine could transport people. A machine without life like a horse? Will it do? Is it safe? Few dare to ride on the motor cars of those yester years.

Not now. On our highways today we don't see any more of those quaint horse drawn carriages. It would be a big surprise indeed, for modern man, to see this ancient mode of transport around today.

Ha! The Bible said, "At the time of the end "many shall travel to and fro and knowlege shall be increased" (Daniel 12:4)

And we are living in the end times where knowledge increased by leaps & bounds. So we must embrace change. If we don't change with the times change will leave us behind.

Take taxi for example. Long thought as the only way and only method of business operation. Until Grab & Uber taxis appeared. And the normal taxi companies that still follow the traditional way of operation will go out of business one by one just like the horse drawn carriages.

Why Grab/Uber will take over the conventional type of taxi operations?

These are the answers from Calvin Tan Research

1) Conventional Taxis are controlled by Big Organisations. They bought them in fleets of hundreds or even thousands. Then to hire it out to Taxi Drivers for a fee of say Rm70 to Rm80 a day? So there is a Middle Man. For Grab/Uber Taxis there is no middle men. The men could own them outright as any private car owner could.

2) A Conventional Taxi ply the road & highways looking for fares.

Lots of wastage

a) He wastes lots of petrol unnecessarily going into every road or lane looking for passengers in rambling mode. Sometimes hours are spend on the road with futile results.

b) As he uses the Taxi to the maximum there is heavy wear & tear on the Taxi concerned. 

c) A Conventional Taxi has a Reg no. with HW (Hire Wilayah) or HJ (Hire Johor) followed by the numbers on the Registration Cards. 

3) Unlike the Conventional Taxi at its end of life which is almost reduced to a junk - The Car used as Uber/Grab are usually in better condition. He does not ply the road unless there is confirmed passenger. So his time is put to better use. He does not incur unnecessary petrol consumption.

Why?

The answer is this.

The Conventional Taxi Driver drives everywhere looking for passengers while The Uber/Grab have passengers looking for them. Sometimes booking a Grab/Uber Taxis for days in advance. This is a more efficient way of doing business.

So the Uber/Grab Taxi Owner has Savings. Savings from not hiring from Taxi Companies. Saving from expending less petrol in the search for fares. Saving from wear & tear to his car. And better resale Value for his car later.

With all these Savings the Grab/Taxi Drivers can afford to charge a lower fare. And so with many turning to Grab/Uber Taxis the Conventional Taxi Mode of Operation will also go the way of the dinasour.

And This ECommerce Is Another Innovation of the Times. The Phenomenal Success of Amazon of USA & Alibaba of China attest to the fact that Digital ECommerce Is The Sunrising Industry of the future.

Those who embrace and adapt to it will both survive & prosper. Those who stubbornly cling to the old ways of coinventional departmental store type of business will face stagnation, shrivelling sales and starvation later. Doom & death await these stiff necked dumb people.

These are the reasons why ECommerce Is The Way Forward

1) In Conventional Business There is First The Producer or Manufacturer. Let's say a Publisher.

The Book is Printed with 

a) Material cost. A hardcover or sofecover book.

b) Royalty to authors - usually 5%

2) Then the Book is sold to WholeSalers or Jobbers/Stockists in bulk. And they are given up to 60% Discount from the Retail Price.

3) The WholeSaler Then Sells to Retail Book Shop at 33% to 45% Discount depending on the quantity of purchase. 

5 copies (33% discount)

10 copies (40% discount)

25 copies (45% discount)

How do Calvin know? You might ask. Well, Calvin has been in Book Business for 5 years from 1982 to 1987. The bookstore name is BEREAN BOOK CENTRE. I worked in a Christian Bookstore with Mail Orders with Discount to Book Club Members in East & West Malaysia, Singapore, Brunei & as far as Australia.

We not only sell books directly to walk in Customers. We also send out a monthly Price List to all Churches, Christian Organisations & Individual Christian members.

And we found out that Publishers like to give Huge Discount for BULK ORDERS. If we buy 10,000 british pound from a Publisher called "THE BANNER OF THE TRUTH TRUST" we could getr a 60% Discount with Free Freight.

The conversion for Book then was Rm5.50 to one British pound. But the actual currency conversion rate was Rm4.50 to One British pound. So we got another extra Rm1.00 gain as Book Conversion Rate is marked up.

Now we gave a nice 30% to 40% discount to book club members. If orders are Rm100 or above they get free freight. Of course it eats into the profit if we send by "PRINTED MATTER" REDUCED RATE" through the Pos Office. So we also use lorry transport which is much cheaper. This only apply to Peninsular Malaysia.

If we buy from Book Wholesalers in Singapore we only get 33% to 40% discount. And we could not afford to give such a high discount of 30% to 40% and yet make a profit.

Some times Publishers will give out notice of Pre Publications (Books yet to be printed. Say now is March. The Upcoming New Book will be printed by September - 6 months away) If we place order early for these Pre-printed books we will get special discounts. So we also include these as "Special Offer Pre-Orders) They paid up in full first & then wait patiently for actual delivery date to get their books.

DROP-SHIPMENT

Ha! This one saves us lots of time, money & the trouble to unpack and pack. How? Sometimes we instruct Publishers to Ship Direct to Customers Straight From UK or USA to their addresses in Singapore or other parts of Malaysia directly. This is called "Drop Shipment"

Ha! I did all these before the advent of the internet or ECommerce. Only difference is. We sent out a monthly mailing list. And there was no fax either. All by mail or through phone which is expensive.

Today, everything is at lightning speed through the Internet & iphone.

Yes! I remember Conventional Bookstores were making lots of noise due to our price  discounting. And soory for some. They closed shop.

And now ECommerce is finally here.

The ECommerce Platform Malaysia is tapping through Alibaba Platform is Huge Indeed! A Market of 2.5 Billion people world wide.

And by buying direct from Manufacturers prices are cut from 30% to 60%. So Huge Huge Savings for all.

These are the scale for a Conventional Bookstore or Business

Total Cost of Retail Price on the Shelf/Shelves (100%)

1) 20% to 25% goes to Manufacturer

2) Wholesaler takes 60%

3) Wholesalers give Retailers 40% Discount (So wholesale profit is 20%)

Retailers made 40% because he has to pay for overhead like rental, electricity and wages.

So manufacturer gets 25% & whosaler gets 20% & Retailer gets 40% = 85% of the cost

What happens to the 15%?

It goes to advertising, shipping and handling & other admin costs.

So imagine if we can eliminate both wholesalers & retailers we havr cut off 2

i) Whosalers profit & cost of overhead with premises rental & staff

ii) Retailers profit & cost of overhead with premises & staff (not counting aircond & lighting bill in Shopping complex from 10am to 10pm)

So by buying DIRECT ONLINE there will be a Huge Saving of Up to 60%

I think this will be the norm in future. ECOMMERCE HAS TO MARCH ON AND TAKE OVER THE COMMERCIAL WAY OF BUYING & SELLING BY STORM.

Embrace it and you will both survive & prosper!

Many Happy Returns

Regards,

Calvin Tan Research

Jurong, Singapore