The comment below the last post about Amazon prompted me to write this article. Its essence is that supermarkets and other giants are killing small businesses, and this is because customers vote for giants with their money.
This is true, but if a small store is unprofitable, then the owners should either close such a business or not sit on the fifth point straight — they need to invent something. Customers should not be acting to their own detriment to feed someone.
But what to do
I'll tell you about a small store that shows you how to develop and prosper in an era of “competition with big ones”. It is located in a residential area of the city, and looks like a regular store, but inside it is very different from the competition in its range. Now one by one.
1. Not far from town, there is a nunnery where nuns run a small farm with cows. The store owners made a fuss and agreed with this monastery to supply milk, cottage cheese, whey and other dairy products.
The milk is packaged in identical bottles and sealed; it's not as scary to buy it as at the market. But it tastes like regular homemade milk, just like other products. The nuns probably produce all this primarily for themselves, but the volumes are small to supply to the supermarket, but enough for a small store. The price is more expensive than that of grandmothers in the bazaar, but cheaper than in supermarkets (this is logical, there are no million intermediaries).
2. A fish. Instead of filling your freezers with frozen hake and mackerel, the owners have cooperated with local fishermen and buy live fish from them (which, again, is cheaper than through intermediaries).
3. There are no other products in this store because it makes no sense, since all other products are nearby in the supermarket and will be cheaper there. But the reduction in the range made it possible to place the store in a small space (pay less rent and utilities), as well as simplify inventory management (more on this below).
4. Inventory management. A common situation in this store is when the store is almost empty in the afternoon. This is bad for owners, but good for customers, as they are confident in the daily freshness of the products.
5. This approach allowed owners to reduce store hours, which saves on staff salaries.
What do I think about competition
Just in case, I would like to note two of my positions that may look contradictory, but they are not:
1. I'm strongly against monopolists' antics, when, for example, Amazon/Google/Apple decides whether someone's small business will exist on their platforms without the ability to communicate and discuss their decisions. I believe that we need external control over their decisions to close something.
Those who have dealt with these giants will understand what I'm talking about: with hundreds of “yards” of revenue, these companies are not even trying to establish adequate communication with small businesses, which are often 100% dependent on them. Google-like people usually make a form that you, of course, can write to, but in response you will receive a template unsubscribe from a robot with extensive references to some points in a vague Policy. You had to accept this Policy because there are simply no alternatives to work with.
2. At the same time, I am very much in favor of competing between “big” and “small”. So I'm not the kind of guy who's going to say that Amazon/Google/Apple should be split up because it's impossible to compete with them and they'll have all the money in the world.
In an interview, Sergey Galitsky, the former owner of the Magnit chain of stores, was asked a question and accusation about the bankruptcy of small businesses. To which he replied that small businesses should not whine, but look for the weaknesses of supermarkets and win the competition, research the range of competitors, sell eco-friendly products, look for local producers and similar things that large chains will not do.
So I want to convey that entrepreneurship is about inventing and developing, not about buying cheaper and selling at a higher price.