Death of a Business
How much can happen in fourteen months? Quite a lot.
Last time I posted here I was running my own small business selling consumer electronics spare parts.That business is now long gone.
AEA (as it was called) failed to succeed for a variety of reasons, the largest one being that the spare parts industry evaporated in the space of eighteen months. Perhaps the process had been even longer than that (with its genesis in the 1980’s and the introduction of the first integrated circuit boards into consumer computers) but in 2009-10 the price of new consumer electronic devices went into freefall. Global oversupply, a rising Australian dollar and rapid technological advances all combined to push the retail price of all categories of consumer devices through the floor – but the same did not happen to the spare parts for those devices.
By early 2010 the situation was dire. A premium brand compact digital still camera could be bought for $95 from a major chain; a replacement charger for that same camera had a wholesale cost price for a parts trader like me of $80. Add on some margin and freight costs and customers could buy a brand new camera for $30 less than I could sell them a charger for their old one. The same price discrepancies were developing in category after category – laptops, projectors, video cameras, phones… the future was not in spare parts. After watching several competitors go under the decision to close before incurring huge losses was easy.
Making the decision was quite emotionally racking. When you’ve put three years of 70-hour weeks and quite a lot of money into a business it’s hard to accept that it has no future. However, the writing was on the wall for the spare parts industry and that was that. The only real question was, what next?







