As a teen I had a job at Toys R Us, I started as a seasonal worker, but was kept on after the holiday season
Like the rest of the world and definitely as a teen, I thought ok this will be a breeze, no one buys toys after Christmas so we will get paid to show up and hang out. Yes, I did not realize that the company had to make money to pay us and all the other bills. But at minimum wage we were cheap, cheap, cheap labor. Especially in the early 80’s (yes, I am old).
Then their business model was explained to me and it worked, throughout the rest of the year, TRU got by with the sales of cases of diapers and formula. The model worked.
Then once I was married and started have children I went to TRU for formula and diapers. The model was still working years later. Then TRU changed the model. They stopped selling cases, only individual units. So as a consumer, I went from vendor to vendor for the sale price, because I was not getting the volume deal any longer at TRU.
Seemingly ever since that change TRU has been in decline. They even merged the TRU brand with their “Babies R Us” brand, but that only slowed the tide, it did not stop it.
Now in Bankruptcy and looking to close even more stores, I have to wonder even though markets change, if they stayed with the working model. My guess is some genius thought they would make a greater profit by selling individual units at a higher margin, forgetting that their competitors were doing that very thing and were in second place or lower.
So don’t fix what works! Tweak, monitor and react if necessary.