The Law of Diminishing Returns

The Law of Diminishing Returns

The Shelf Life of a 12-Foot Home Depot Skeleton

By the time the skeleton has rotted into a pile of dust, it will have been three centuries of age.

The home improvement store is no longer a store. It is a graveyard of its own making.

It sits on a hill of old railroad tracks, with an old freight spur as a monument. As a result, the hill is covered by the rotting carcass of a historic structure, and is dotted with the rusting bones of several other historic structures.

When the owner of Home Depot, Michael Spangler, bought the property in 2005, he built his store right up to the hill, right up to that freight spur, where he’s found all the skeletons of his failed businesses.

What Spangler did was simple. He bought a real estate investment with a lot of potential that he never developed. But, as happens to so many Americans, he wanted to be the owner of a retail establishment. His only problem was, the property was a skeleton that needed a lot of renovating before he could really get going. He tried to add more stores to the site, but each of them was met by a wave of protests from neighbors. The protests went on and on until he decided to tear down the entire old structure and build something else.

In short, Spangler, now in his mid-sixties, is the world’s most extreme example of the process known in business as “The Law of Diminishing Returns.”

As he explained it, there are only two kinds of businesses — those that survive and those that don’t. Home Depot clearly fits that description, but just barely.

According to Spangler, the real problem is, “Home Depot is a pretty good store.”

It’s a store that sells a wide variety of merchandise and goods and services, yet has yet to become profitable. It is a store that is good at getting its customers to spend money there, yet lacks the ability to make a profit on

Leave a Comment