Do you think this is efficient? Do you think amazon
operates like that.

No, Amazon does not operate like that. That is why we haven't lost a hundred
million. Yet.

StanB

Yeah, we only lost two or three million (I have lost count),
Is this what is meant by economies of scale?

Rp

StanB wrote:

"James B. Shearer" wrote in message
om...

Consider EB 02-19 which says in part "All Book-and-Equipment
purchase orders shall be approved by the Vice President for Finance"
and "All vendor payments shall be approved by the Vice President for
Finance". Do you think this is efficient? Do you think amazon
operates like that.

No, Amazon does not operate like that. That is why we haven't lost a hundred
million. Yet.

Amazon would be profitable right now if they hadn't borrowed
a billion to expand into areas outside their cores sales of
books, music and videos. They were simply too ambitious.

"ASCACHESS" wrote in message
...
Do you think this is efficient? Do you think amazon
operates like that.

No, Amazon does not operate like that. That is why we haven't lost a
hundred
million. Yet.

Yeah, we only lost two or three million (I have lost count),
Is this what is meant by economies of scale?

This would be more like diseconomies of scale.

StanB

Paul Rubin writes:

..
Amazon has run close to break-even in recent years and claimed that
its losses are still intentional (this was as of about 2 years ago, I
don't know about since then). Its bookselling operation has been
profitable for a while but it chose to keep dropping money in other
areas (videos, tools, electronics, etc.) hoping to become the one-stop
web retail king, sort of like the old Sears Roebuck. The results
haven't been a complete flop but they're nothing like the fantasy.

Because, much as people do with paper catalogs (Sears, Montgomery Ward,
etc.) shoppers now tend to look at Amazon to survey the market...and
then shop on price once they know what they are looking for. Catalogs
only control the market when they have exclusive franchises for the most
desirable merchandise.

--
Kenneth Sloan
Computer and Information Sciences (205) 934-2213
University of Alabama at Birmingham FAX (205) 934-5473
Birmingham, AL 35294-1170 http://www.cis.uab.edu/info/faculty/sloan/

StanB wrote:

"Paul Rubin" wrote in message
...

(James B. Shearer) writes:
As for technology, claims of significant savings are very short
of specifics. What current expenses will be eliminated and how much
will it cost? Consider amazon, it saves relative to the USCF because
it is a web based operation. Amazon does not print and mail out
catalogs or take phone orders. This saves a lot of money.

1) Amazon does mail out advertising (not full catalogs, which would be
huge).
2) I'm not sure about phone orders but Amazon has an -enormous- customer
service staff, much larger than they expected they need.
3) Amazon continues to lose money. I have no idea how much they've lost
to date but it has to exceed $100M.

Yea but they saved 50M. Cause otherwise they'd lost 150M.

My question is who underwrites a 100M loss? Doesn't the well run dry at some
point?

StanB

Actually they underwrote their losses with the ALMA and the APPHBF
funds which were collateralized on a dollar for dollar basis.

We are copying their business model.

Best Regards,

Bruce

Subject: B&E Biz Outsourcing
From: (James B. Shearer)
Date: 07/31/2003 1:15 PM Eastern Daylight Time
Message-id:

(Recmate) wrote in message
...
Subject: B&E Biz Outsourcing
From: (James B. Shearer)
Date: 07/30/2003 9:39 PM Eastern Daylight Time
Message-id:

"Tim Hanke" wrote in message
...

snip

It's not "obvious" to everyone that "the B&E Biz is too expensive to run
in-house." Other people in this country sell products; why can't USCF?

Obviously the USCF can sell products, it just can't sell them at a
profit in a competitive market. This is because the USCF is
inefficient and this is not likely change due to the way the USCF is
governed.

There is nothing inherent in USCF's governance structure that makes the
office
inefficient. There is no reason why efficiency cannot be improved
dramatically
after the move and after a software upgrade. While it is far from certain
that
this will happen, it would be highly irresponsible for the Board and the ED
to
just give up.

Consider EB 02-19 which says in part "All Book-and-Equipment
purchase orders shall be approved by the Vice President for Finance"
and "All vendor payments shall be approved by the Vice President for
Finance". Do you think this is efficient?

This motion was actually desirable when passed, because under De Feis,
purchasing and payments left much to be desired and Board supervision was
necessary.


Do you think amazon
operates like that.
The inefficiency is not just within the office but applies to the
USCF as a whole. The EB has to spend a lot of his time politicing
with the board and delegates. If he does not do this sensible actions
like raising scholastic dues or TLA fees get derailed.

Raising TLA fees was not a sensible action, and not something Niro supports.

In general, if the ED knows how to sell chess products, as Niro does, the Board
and Delegates do not interfere.

Chess Life and
the LMA fund are not completely controlled by the ED. This is
inefficient and leads to diffusion of responsibilty and finger
pointing.

I doubt if comparable organizations are 100% controlled by their EDs, nor would
this be a good thing. The USCF structure in which a Board oversees is common.
USCF has gone through an unusually bad period in recent years, but has had a
Board over its ED for many more years than that. The conclusion that the USCF
structure cannot work because the Board is above the ED is unwarranted.

The immediate effects of moves and software upgrades are
disruption and expense.

Nevertheless, USCF must pursue this course and hope for the best. Looking
ahead a year or two the effects may be profitable.

I have doubts the USCF will avoid bankruptcy.

A good way to guarantee bankruptcy is to adopt the attitude of the Redman Board
and believe that USCF is permanently incapable of doing anything right.


I am not suggesting the EB and ED give up. There is a big
different between wasting 15% of your revenue and 25%. What I am
suggesting is that the EB should be aware of and take into account the
USCF's limitations and not try to do things that are beyond its
capacity.


The limitations were caused by bad management and an obsolete computer system.
Both problems can be corrected. I expect better efficiency plus lower costs in
Tennessee, though there may be a difficult startup period.


The idea (practiced by the Redman Board) that USCF can't do anything right
so
it should start closing down or outsourcing everything is ridiculous. With
better management, past failures need not be repeated. I am still hopeful
that
we have the management we need now, though my optimism has declined quite a
bit
as a result of the Debi Sherry incident.

The Redman board tried to operate a chess server and publish
chess books. Both were predictable disasters.

Other people publish chess books profitably but the USCF can't.

USCF hasn't tried. The De Feis attempt was pathetic.


Other people run profitable chess servers but the USCF can't.

It's not so easy to compete with ICC. USCF should make deals with the various
online play companies and give up on the idea that its own "branded" server
will promote membership.

The USCF should stick to its monopoly markets and avoid losing
battles with more efficient organizations.


Historically, USCF has had two major sources of income, adult dues and B & E.
To shut down one of these would be folly, especially when even with the current
inefficiency, there is no evidence that B & E loses money.


What's obvious is that USCF is inefficient in how it processes orders.
To
address this problem, USCF needs better computer hardware and software.

This is the George John theory and it is wrong. The USCF is
inefficient because it is badly managed, the computer problems are a
symptom not a cause.
Also the USCF lacks the economies of scale of some competitors like
amazon.
James B. Shearer


USCF has major advantages for selling books and equipment over other
vendors:

1. The prestige of being the national chess organization helps sales.
Many
prefer to buy from USCF now, even though service is not nearly as good as
it
could be with a software upgrade.

2. USCF can advertise in Chess Life and on uschess.org at cost. Other
vendors
cannot.

Remember the USCF is turning down full price ads from other
vendors to protect its uncompetitive B&E business.

Really? I don't believe that USCF has ever turned down any such ads. For
example, there is a half page ad for Chess Digest in the April 2003 issue.



Btw what does the USCF charge for full page back cover, inside
cover and inside ads?


If not for USCF rated tournaments, I think the back cover is about $5000 and
the other covers about $3000.


3. USCF can award itself lucrative concessions at major tournaments such
as
the National Scholastics, US Amateur Team East, National Open and US Open.
Other vendors cannot.

These concessions could be sold.


And they are when the ED decides not to use them. But it's a big advantage to
have the option to use the concessions.


B & E is not a source of significant profit now, but neither does it lose
money. If USCF finally straightens out its computer mess, B & E sales will
become very profitable. It would be foolhardy to discard this possibility.


B&E lost hundreds of thousands of dollars in 2001-2002. It is
probably still losing significant amounts.

I don't think it's losing anything, but this depends on some accounting
assumptions. If you want to ignore the real worlde and say that B & E is
responsible for a large percentage of USCF overhead, including things USCF
would still have to pay if there were no B & E, you can make a case for there
being losses.


It is unlikely the USCF
will ever straighten out its computer systems to the satisfaction of
outside critics like George John. What do you think the odds are that
the USCF will straighten out its computer mess?

USCF will either straighten out its computer mess within a few years or go
bankrupt. Planning for bankruptcy has little point, so the Board and ED should
try to fix the computer situation, and base future plans on the assumption that
it will be fixed.

Bill Goichberg


What will B&E
profitability be if it doesn't?
James B. Shearer

Historically, USCF has had two major sources of income, adult dues and B & E.
To shut down one of these would be folly, especially when even with the
current
inefficiency, there is no evidence that B & E loses money.


If not B+E, where would you say USCF is losing money?
Our financials seem to indicate that we have a leak somewhe-)

Rp

"ASCACHESS" wrote ...
If not B+E, where would you say USCF is losing money?
Our financials seem to indicate that we have a leak somewhe-)

Richard,

People like you are opposed to the kids paying their share of dues, and I
presume you are also opposed to the kids paying a fair rating fee.

So selling more Books & Equipment is pretty much USCF's only hope of getting
back in the black.

Tim Hanke

It's not so easy to compete with ICC. USCF should make deals with the
various
online play companies and give up on the idea that its own "branded" server
will promote membership.

By the way, it HAS given up on the branded server. It just keeps signing deals
with GamesParlor for no apparent reason anymore.

John Fernandez

People like you are opposed to the kids paying their share of dues, and I
presume you are also opposed to the kids paying a fair rating fee.

So selling more Books & Equipment is pretty much USCF's only hope of getting
back in the black.

Tim Hanke


I quote you in total for fear of putting a different meaning in your words.

Tim, in my opinion, the historical business plan (or lack thereof) is so bad
that when someone like you with real world business experience looks at what
the office methods actually are, that a plan may begin to take form to replace
what exists.

"It has always been done that way" is NOT a plan.

You brought up kids not paying their share of rating fees.
Under the current inefficient system, this is true of everyone, but are the
kids whose results are generally on disk getting a better deal than the adult
who submit their tournaments on paper?

Question back to you.
Nolan says ratings are losing $60K per year.
Which segment is losing more, scholastic tournaments submitted on disk or adult
tournaemnts submitting paper?

Are you prepared to charge the adults the actual cost of rating the paper
submissions?

Richard Peterson