NEW VIDEO 10/7/2019
Randy Fry’s past shenanigans have caught up to him and the vendors have cut him off of his 90 day credit float. It used to be if you wanted to sell your product in his stores, the terms were, Net 30 with 2% discount for paying on time, which is normal. Then here is where the shenanigans start. You must pay freight to and from his warehouse. So, when people return your product to them, you must pay to get it returned to you, plus a 6% coop fee for advertising is deducted from his payment, except he doesn’t advertise. So, there is 8% deducted from his payment to you. So far, all of the conditions are tolerable for most vendors as you get instant access to all 30 some odd stores. Best Buy takes a year of negotiating to get your product in there, unless they want you, then it’s very quick.
So, here’s the kicker with Fry’s and why it’s caught up to him. So, he gets 2% net 30, he cuts the check on the 30th day, minus the 2% discount and the 6% advertising coop fee, then the check sits in his inbox for another 60 days before he signs it and mails it to you. In the meantime, he’s ordered more product from you on the 60th day that you haven’t been paid for either. So, now it’s been 90 days that you haven’t been paid on the first invoice and now he wants more product again. Now you’re ready to cut him off because you haven’t been paid for 90 days on the first invoice. The second invoice is 60 days, so it hasn’t aged enough to flag yet. Then the first check magically shows up before you’re ready to cut him off, so his account is good and he gets to order more product. Meanwhile, he’s had a 90 credit interest free float, that you did not extend to him. So, he takes product from you and doesn’t have to cough up any money and has 90 days to sell it to get the money to pay you back before you cut him off. This was how he could have 8 foot high shelves stocked to the ceiling and isles crammed full of stuff, with no room to walk around, all of it borrowed from vendors. Everyone put up with it, because he sold a lot of product.Now starts his demise. In 2011 when both hard disk factories in Thailand got flooded out and caused a worldwide shortage, Western Digital and Seagate cut him off. Told him, you want product, you pay for it when you order. So, the hard disk shelves were bare for a while. Then other vendors followed suit and told him the same thing.
Fast forward a couple of years, product is noticeably thin at the stores, because he didn’t have the money to stock them. So, they spread it out to disguise it. Product thins out noticeably more, shelf height get cut in half, product get moved from floor to shelves. Thins out even more, shelves removed and isles widened. Now product is so thin, it can’t be hidden anymore. People don’t go there because they have no product and they have no product because people don’t go there. Before you couldn’t find a parking because the lot was full, not there are no cars there. Fry’s still has his grocery stores, which is how he started out, but electronics was his money maker. Once Fry’s is gone, there will be only one computer store in LA/OC area, Microcenter in Tustin and Best Buy is too expensive. After they go, Amazon will be the only thing left and people will have to order and wait for product to arrive. No more same day buying or repairs. Sorry for the book.