Circuit City is preparing to close its 567 remaining stores as efforts to find a buyer have failed.  Liquidation of the remaining inventory will be part of this closure.

Like most other things in business, a problem for one person is an opportunity for another.  All-sales-final, everything-must-go sales can bring monster deals for entrepreneurs.  I’ve been to store closings during the final days that the remaining inventory was discounted 90% or even 95%.  Brand new, in the package, selling literally for cents on the dollar, almost certainly at a loss.

When Tweeter closed in December, we bought a few items for sign displays.  We used these at a craft show my wife went to, and we paid a fraction of what they would have cost at Staples.  There was still a limited inventory of high-end electronic equipment with the price slashed 50% or more.  If I followed that market more, I know there were great deals in there.  Possibly great enough to resell on eBay, even if I didn’t really want to own the equipment.

If Circuit City closes its doors in a similar fashion, there could be some fantastic deals.  Items aren’t slashed 90% right from the start, of course, but as the store gets smaller and the shelves clear out, the deals get better on what remains.  On the last day, the selection will be thin, but the deals will be phenomenal.

To take advantage of the closing, try these:

• Find out when the last day of business is. The more time you have to look over the merchandise, the better.  The more planning you can do, the better.
• If you have a resale business like an eBay store, start scoping out the items, and see what you can sell them for.  Determine a price point that will give a good chance for profit on the item.
• If you’ve had your eye on a particular item, one that you’d want to own, don’t wait too long, especially if it’s a popular item.  A 10% or 20% discount on a high-ticket item is good for you.  You’ll want to buy when the discount isn’t so great that you’ll have competition from resellers.
• Don’t be afraid to lowball. The worst they can say is no, and the closer the final day of business gets, the less likely they are to say no.
• Ask about the business equipment. They’ll need to sell their shelving, cash registers, price guns, tape, computers, etc.
• Bring help. They probably won’t provide help lugging out truckloads of stuff.
• Borrow money to buy? Only if you’re really sure that you can afford it!  This recession will be long.  Make buying some liquidated inventory an opportunity, not a burden.

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I stopped by Borders while I was in town tonight and read part of Larry Winget’s People Are Idiots And I Can Prove It! It took me a little hunting to find it, though.  I started by heading over to the personal finance section — his last book was You’re Broke Because You Want To Be, after all — but it wasn’t there.  It was in the psychology section, which is probably more appropriate for this one.

So, when I came home, I went to Amazon.com and ordered it.  We have Amazon Prime and I had $10 in gift certificates that I earned by searching the web through SwagBucks, so it cost me all of a few bucks shipped to my door by the end of the week.

Anyway, People Are Idiots … is written in his standard “break ‘em down, shake ‘em up, point ‘em in the right direction” style that is his trademark.  He freely admits that none of the suggestions he makes in the book are new.  They’re the same old thing.  To lose weight, you have to eat less and exercise more.  To become wealthy, you have to spend less and earn more.  And so forth.

What’s different is how he goes about motivating people to take his suggestions.  It’s all about psychology.  It’s the same kind of psychology that makes Dave Ramsey brilliant, because if we all did what we knew was right, we wouldn’t be in nearly the amount of hurt we are in now.  It can be a very effective tool to get our emotions involved, either by slaying a little debt dragon, or by getting angry at the mess we’ve made with our lives.

I liked the clarity of what I read earlier tonight, and look forward to reading the rest of People Are Idiots And I Can Prove It! when it comes in.

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Aww man, no sooner do I post about Costco credit cards like the TrueEarnings® Business Card from Costco and American Express then I hear that the offer is being discontinued!  Bummer.

So if you were thinking about getting 5% off the cheapest gasoline in town, you’ll need to apply before this Friday, November 14th, 2008. Sorry about that!

The non-business TrueEarnings® Card from Costco and American Express, as far as I know, is still being offered.  That still gives you 3% off of qualifying gas.

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I was revising the prices of some of my items on my eBay store and noticed that eBay has taken keen notice of inflated shipping charges.  EBay charges sellers fees based on the final sale price of the item but not on the shipping, so it has taken aim at sellers who inflate their shipping charges in order to pay smaller final value fees.

I noticed the crackdown in two different places:

• Revising the price of a three-magazine lot.  EBay warned me that my shipping price seemed high for the type of item I was selling.
• Revising the price of a single magazine.  EBay now has imposed a maximum shipping charge for a single item “based on what other sellers are charging and what buyers consider reasonable.”  The maximum shipping fee I’m allowed to charge for a single magazine is $5.00.  If I were to have mandatory insurance, it would have to be included in the $5.00.

Now, at first glance it may indeed seem reasonable that a magazine could be shipped for $5.00 within the US.  I wouldn’t fault anyone for thinking that, but unfortunately this just isn’t the case.

United States Postal Service regulations state that magazines (outside of the periodical rates allowed to publishers) cannot be shipped either by Media Mail or by Bound Printed Matter.  Magazines cannot be shipped by Media Mail because they almost always contain advertising.  Magazines cannot be mailed as Bound Printed Matter because of an explicit disallowance in the Domestic Mail Manual, Section 363.3.1h.  First-class mail, Parcel Post, and Priority Mail (as well as more expensive services) are OK.

First-class mail has a weight limit of 13 ounces.  The minimum charge for Parcel Post is $4.55.  Priority Mail has a flat-rate envelope available for $4.75 if I pay for the postage online, but these envelopes are not big, and if the magazine cannot fit in the envelope and it weighs 1 pound, 1 ounce or more, I’m over the $5.00 limit and have to take a loss on the shipping.

So, where does this leave me?  Well, I don’t really have much choice except to transfer the cost to the price of the item.  I’m not on eBay to lose money on every sale.  Nonetheless, raising my prices makes me less competitive.

It makes me really uncompetitive, though, with PowerSellers that ship by Media Mail all the time.  I won’t be a jerk and link to them here, but some of the top eBay sellers in the Magazine Back Issues category ship by Media Mail.  (Packages can be inspected at any time, and I’ve heard of some post offices charging the recipient Express Mail prices for items shipped by an improper method.)

So does eBay just not get it?  I think it’s a tough problem to solve, and they probably do a pretty good job at determining reasonable shipping charges for most items.  Magazines are a strange product to ship, as I’ve outlined above.  It’s more expensive than most people think to follow the rules in shipping magazines.  Several of the biggest sellers don’t ship by the rules, and besides, people are used to having their magazine subscriptions just show up.  It’s not free to mail magazine subscriptions, of course, but it appears free to the customers.  Basically, shipping magazines need special consideration for allowable shipping charges because there are restrictions on how they can be sent.

Oh well, I suppose I can make cheap Priority Mail shipping a feature of purchasing from my store instead.  Turn lemons into lemonade and all that.

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Jim over at Blueprint for Financial Prosperity commented on my short little Restaurant.com post — the one where you can use coupon code TREATS to save 80% through Halloween — saying that the participating restaurants in his area had left the service.

One might conclude that these restaurants are in a bit of contraction mode.  The restaurants used Restaurant.com to gain new customers and keep old ones by having them sell discounted dining certificates.  The restaurants hope to make up for the initial loss of giving discounted meals to customers by (a) getting them in the door and buying higher-markup items like drinks and appetizers and (b) having them come back with their friends.

When times get rough, it’s all too common for businesses to cut back on advertising and marketing.  The concerns become putting food on the table and making payroll, in that order.  Withdrawing from Restaurant.com is a cutback on advertising.  Restaurants are likely to get hit pretty badly in this recession (and any recession) because eating out is a discretionary expense.

Businesses are going to see tough times.  Consumers will be guarding their spending.  They will buy the essentials first, and forego other expenses that they gladly made when they felt richer.  They’ll be fixing what they have to save money instead of buying the latest and greatest.  Businesses will have to provide awfully good deals, but the deals can only get so good before the business is losing on each sale.

Home-based business will see hard times, too, but I think the concern with secondary-income businesses — like blogging, for example — will be to keep things going even though the income drops.  Making payroll may not be an issue, but writing several posts a week for a fraction of what was coming in a few months ago might get old.  Watching affiliate income drop might get old, too.

I’ve been blogging for over three years now.  The recession could last well into 2010, but I’m convinced that things will go on the way up again.  It just may take a while.  Unless a serious financial emergency comes up, I’ll keep plugging away, building up my post count, subscriber count, etc.  (Thanks for reading!)  When the economy starts up again, people start spending again, I’ll have a stronger business than before the recession.

The recession won’t be forever, and lower sales and profits won’t be forever either, but just keep at it!  Some of your competition won’t keep at it, and that’s good for you.  You’ll be in a stronger position after the recession.

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