07-24-2009, 02:09 PM
Vllad Wrote:Now days it is the suppliers who decides who lives and who dies. You have two nail companies that thrive, one that sells to Lowe's and one the sells to Home Depot. All others die because they can't get their nails to the public.
I'm not entirely convinced...
For example, if Joe's Nails, mass distributed via Home Depot, were substandard quality and made in Singapore, and Bob wants to make a nail company stamping out superior nails, I would think the real question is "Can Bob make a living" rather than "Can Bob compete with Joe".
I agree he can't compete with Joe. Home Depot isn't going to pick up Bob's product so Bob isn't going nationwide anytime soon. But if Bob can demonstrate the value of his nails to customers in a particular locale, he may be able to start up a small time company producing nails and selling them locally.
So maybe he can't come out of the gate competing with Joe and Home Depot, but he can still create a competitive product on a local level, IF local companies agree in the value of the thing.
I feel like I see the same thing in the grocery store all the time.
There's this great soda that's made with sugar rather than corn based sweeteners. They can't compete with Coke. They aren't going to be distributed by Wal-Mart. But they get local grocery stores to pick up their product. Maybe they aren't going to be the next Pepsi but they can make a living creating an alternative product so long as there are enough consumers who see it as worthwhile to buy their higher priced goods.
Same thing with "organic" milk, eggs and vegetables. They really can't compete with big producers and they cost more but they can get enough distribution and customers to apparently earn a living and keep making their product.
Or same thing with beer. You aren't going to topple Budweiser but you can probably open your own brewery and compete on a local level, especially if you can sell the idea that "buying locally produced beer is worth the extra dollar over the cost of a Budweiser".
The real question may be if there's enough of this local stuff going on to make any difference.
That is, there's no doubt that Joe's Nails is #1 nationwide and the next biggest competitor is small beans, but is Joe's Nails 99% of the market, dominating it entirely, or are they 65% of the market with Bob taking up 1% and another 34 small time local companies across the nation each taking up another 1% of their own? A small time local company isn't going to take anything away from Joe and Home Depot but 50 small time local companies can, if they can demonstrate the superiority of their product.