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Wish pushes inventory to small businesses: Helpful or hurtful?

(BUSINESS NEWS) Wish offers small stores large quantities of items to sell, but do they actually want to help, or just get cheaper shipping?

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Wish, persistent purveyor of oddities, fetish fuel, and a seemingly endless collection of mostly made-in-China cheapie junk, is moving their inventory into small, local businesses near you.

Wish built its empire by having suppliers in China ship directly to their customers, avoiding the need to receive, store, and deliver inventory stateside. It’s a slick, sneaky move that helped them keep their shipping costs down, thanks to a shipping subsidy. However, the Universal Postal Union, a branch of the United Nations responsible for international shipping rates, has recently done away with this subsidy, and now those shipping costs have doubled.

While Wish has been utilizing small businesses to sell their goods since January 2019, they now plan to expand their on-the-ground sales by pushing out their goods into small boutiques around the country. In doing so, they can bundle sales from China to circumvent the shipping laws and still not need to invest in warehouses or pay employees like Amazon.

So, does this help or hurt small businesses?

It’s an undeniable fact that small stores in the U.S. are hurting due to the pandemic. Perhaps they need this saving grace – this low-hanging fruit of inventory to stay afloat.

People aren’t out and about as much as they have been for obvious reasons. And when they are, they aren’t spending hours browsing in stores, either; most have a list or an idea of what they need and are in and out as quickly as possible. By acting as a Wish pickup location, small businesses will be able to attract people into their stores. Odds are, many of these people will splurge on an impulse buy or two since they’re already there.

Retail is already hard enough with the proliferation of online shopping. Maybe this is a case of “if you can’t beat them, join them.” Amazon partnered with bigger chains to serve as pickup spots; at least Wish is offering the same opportunity to smaller stores.

This may also be beneficial for consumers as Wish is also known for its bargain prices. It is not merely cheaply made goods they’re selling; they are also selling them for cheap. With more people unemployed and underemployed than ever before, many customers are seeking those deals. According to Forbes, Wish has traditionally catered to those in the bottom 25% of household incomes, making it a good alternative to Amazon and other online retailers.

On the flip side, while I want our charming small stores to survive, my concern is that with Wish merch flooding the shelves of our local businesses that are in survival mode, there will be less room for the handmade, local, unique goods that these stores have built their name and reputations on.

Instead of bailing out these original stores with charm and personality, Wish may be turning them into thousands of tiny clones. Sure, I mean, if I needed loose, pink plastic panties that look like an upside-down shower cap, affordable “diamond” ring, or body part enlarging cream, Wish would have definitely have those. But if I want dollar store stuff, I will go to the dollar store. I’m not ready to see my charming local businesses carry that many cheap goods made in who-knows-where and under what conditions.

Many of us make the effort to shop at local stores because we want to support unique artists and makers. I want to feel good about buying my artisanal whatnots and take pride in paying a little more, knowing my purchase goes back to an individual who made it with passion.

Lest you think I’m picking on them, Wish is the 4th largest digital marketplace in the U.S., moving around 3 million items a day. They’re an $11 billion business, so I’m pretty sure they are too busy counting their money to have their feelings hurt. According to Forbes, it was the most downloaded shopping app in 2019. So, they’re laughing all the way to the bank, if you will. Wish is already utilizing 36k stores in the U.S. this way, with a goal of 100k by the end of 2020. Fingers crossed that this move actually provides a temporary lifeline for our favorite small businesses.

Joleen Jernigan is an ever-curious writer, grammar nerd, and social media strategist with a background in training, education, and educational publishing. A native Texan, Joleen has traveled extensively, worked in six countries, and holds an MA in Teaching English as a Second Language. She lives in Austin and constantly seeks out the best the city has to offer.

Business News

Too connected: FTC eyes Facebook antitrust lawsuit

(BUSINESS NEWS) Following other antitrust hearings, we’re expecting to hear more about the FTC’s antitrust lawsuit against Facebook, soon.

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Facebook being crossed out by a stylus on a mobile device.

Facebook might be wishing it had kept the “dislike” button.

On September 15, the Wall Street Journal announced that the Federal Trade Commission was preparing a possible antitrust lawsuit against the social media titan. Although the FTC has not made an official decision on whether to pursue the case, sources familiar with the situation expect a determination will be made on the matter sometime before the end of 2020. Facebook and the FTC both declined to comment when asked about the story.

The news comes following a year-long investigation by the FTC that has looked into anti-competitive practices by the Menlo Park-based company. This past July, the United States House of Representatives held hearings in which they grilled the CEOs of Amazon, Apple, Google, and Facebook regarding their business practices. In August, Facebook CEO Mark Zuckerberg also testified in front of the FTC as part of the department’s antitrust probe into the organization.

The FTC seems to be especially interested in Facebook’s past acquisitions of WhatsApp and Instagram, which they believe may have been done to stifle competition. In internal emails sent between Zuckerberg and Facebook’s former CFO David Ebersman back in 2012, the 36-year-old seemed worried that the apps could eventually pose a threat to the social media conglomerate.

“These businesses are nascent but the networks established, the brands are already meaningful, and if they grow to a large scale the could be very disruptive to us,” Zuckerberg wrote to Ebersman, “Given that we think our own valuation is fairly aggressive and that we’re vulnerable in mobile, I’m curious if we should consider going after one or two of them.”

When Ebersman asked him to clarify the benefits of the acquisitions, Zuckerberg stated the purchases would neutralize a competitor while improving Facebook.

“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc. now will give us a year or more to integrate their dynamics before anyone can get close to their scale again.” Zuckerberg said.

This isn’t the first time the FTC has investigated Facebook either. Last year the agency fined the company $5 billion for the mishandling of user’s personal information, the biggest penalty imposed by the federal government against a technology company. As a part of the settlement with the FTC in that case, Facebook also promised more comprehensive oversight of user data.

If the FTC does pursue an antitrust suit against Facebook, it could end up forcing the social media giant to spin off some of the companies it has acquired or place restrictions on how it does business. Considering how long it will take to file the litigation and prove the case in a courtroom, however, it seems that Zuckerberg will once again be “buying time.”

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Business News

What you need to know about the historic TikTok deal (for now)

(BUSINESS NEWS) No one really knows what’s happening, but the TikTok deal’s impact on business, US-China relations, and the open internet could be huge.

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Male black hands holding app opening TikTok app.

So, maybe you’ve heard that Oracle and Walmart are buying TikTok for national security!

Um, not exactly.

Also, Trump banned TikTok!

Sort of? Maybe?

But then he said he approved the Oracle-Walmart-TikTok deal!

We guess?

The terms of the proposal seem to shift daily, if not hourly. The sheer number of contradictory statements from every player suggests no one really knows what’s going on.

Just one example: Trump said the deal included a $5 billion donation to a fund for education for American youth. TikTok parent ByteDance, said, “Say what now?”

Here’s what we think we know (as of this writing):

Oracle and Walmart would get a combined 20 percent stake in a new U.S.-based company called TikTok Global. Combine that with current US investors in China’s ByteDance, TikTok’s parent, that would give American interests 53 percent. European and other investors would have 11 percent. China would retain 36 percent. (On Saturday Trump said China would have no interests at all. But that does not jibe with the reporting on the deal.)

Oracle would host all user data on its cloud, where it is promising “security will be 100 percent” to keep data safe from China’s prying eyes. But reporting has differed on whether Oracle will get full access to TikTok’s code and AI algorithms. Without full control, skeptics say, Oracle could be little more than a hosting service, and potential security issues would remain unaddressed.

Walmart says they’re excited about their “potential investment and commercial agreements,” suggesting they may be exploring e-commerce opportunities in the app.

The US Committee on Foreign Investment in the United States, which is overseen by Treasury Secretary Steven Mnuchin, still has to approve any deal.

As for the TikTok “ban” – which isn’t really a ban because current users can keep it – the Commerce Department postponed the deadline for kicking TikTok off U.S. app stores to September 27, to give time for the deal to be hammered out. Never mind that it’s still not clear whether the U.S. government has authority to do that. Unsurprisingly, ByteDance says it doesn’t in a lawsuit filed September 18.

Whatever happens with the whiplash of the deal’s particulars, there are bigger issues in play.

According to business news site Quartz, moving data storage to Oracle mirrors what companies like Apple have done in China: Appease the Chinese government by allowing all data hosting to be inside China. A similar move could “mark the US, too, shifting from a more laissez-faire approach to user data, to a more sovereign one,” says China tech reporter Jane Li.

More obvious: Corporate sales and mergers are now part of the parrying between the U.S. and China, which adds a whole new playing field for negotiations among businesses.

In the meantime, TikTokkers keep TikTokking. White suburban moms continue to lip sync to rap songs in their kitchens. Gen Z continues to make fun of the president – and pretty much everything else.

And downloads of the app have skyrocketed.

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Business News

Hobby Lobby increases minimum wage, but how much is just to save face?

(BUSINESS NEWS) Are their efforts to raise their minimum wage to $17/hour sincere, or more about saving face after bungling pandemic concerns?

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Hobby Lobby storefront

The arts-and-crafts chain Hobby Lobby announced this week that they will be raising their minimum full-time wage to $17/hour starting October 1st. This decision makes them the latest big retailer to raise wages during the pandemic (Target raised their minimum wage to $15/hour about three months ago, and Walmart and Amazon have temporarily raised wages). The current minimum wage for Hobby Lobby employees is $15/hour, which was implemented in 2014.

While a $17 minimum wage is a big statement for the company (even a $15 minimum wage cannot be agreed upon on the federal level) – and it is no doubt a coveted wage for the majority of the working class – it’s difficult to not see this move as an attempt to regain public support of the company.

When the pandemic first began, Hobby Lobby – with more than 900 stores and 43,000 employees nationwide – refused to close their stores despite being deemed a nonessential business (subsequently, a Dallas judge accused the company of endangering public health).

In April, Hobby Lobby furloughed almost all store employees and the majority of corporate and distribution employees without notice. They also ended emergency leave pay and suspended the use of company-provided paid time off benefits for employees during the furloughs – a decision that was widely criticized by the public, although the company claims the reason for this was so that employees would be able to take full advantage of government handouts during their furlough.

However, the furloughs are not Hobby Lobby’s first moment under fire. The Oklahoma-based Christian company won a 2014 Supreme Court case – the same year they initially raised their minimum wage – that granted them the right to deny their female employees insurance coverage for contraceptives.

Also, Hobby Lobby settled a federal complaint in 2017 that accused them of purchasing upwards of 5,000 looted ancient Iraqi artifacts, smuggled through the United Arab Emirates and Israel – which is simultaneously strange, exploitative, and highly controversial.

Why does this all matter? While raising their minimum wage to $17 should be regarded as a step in the right direction regarding the overall treatment of employees (and, hopefully, $17 becomes the new standard), Hobby Lobby is not without reason to seek favorable public opinion, especially during a pandemic. Yes, we should be quick to condone the action of increasing minimum wage, but perhaps be a little skeptical when deeming a company “good” or “bad”.

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