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trakka
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Power Protect, post: 49763 wrote:
Sorry, but its nothing like when Woolworths moves in. I’m no fan of the proliferation of the large chain supermarkets and their ever expanding interests so dont think I’m pro big-guy.

The company you are looking to steal market share from has invested time and money in building the brand locally and purchasing containler loads of stock that I would expect have to be carried for some time before it is sold. They have spent money on advertising, signage, promotional material, warehousing space, and it has probably cost them a bit for people that break the equipment through carelessness but are still given a replacement under warranty.

All these things carry a cost which is recouped through the margin on the products they are importing. The reason you can do it cheaper is because you are not putting in the effort, you are just capitalising on the dollars they have already spent.

How is it not like when Woolworths moves in?

I invested time and money and purpose built a retail store. I purchased stock, signed supplier agreements, spent money on advertising,signage, promo materials and equipment. I worked night and day. I lost money to damaged stock and shoplifters. And then Woolworths moved in, and with their substantial buying power undercut my prices. They could sell prices cheaper than I could buy them wholesale.

Did they “steal” my marketshare? No. They won the business through price.

So, how is that different?

I have a business that imports products from overseas – mainly from the USA. My business stands to be severely impacted if someone decides to parallel import. However, I understand that is part of the business and I went into the venture knowing that it could happen (I know people who parallel import- but different products). If a competitor is able to sell at a lower price and create value than I need to adapt my business practices to compete or at the least review my supplier agreements.

If Snow goes ahead with his venture he will be taking the same risks and making the same kind of investments of time and money, as those selling the same product already.

There are some new products and services introduced every year, but the majority of businesses are started as someone thinks they can do it better or introduce a product or service that is not yet available in an area.

Does that mean the majority of start up businesses are “stealing” from existing ones?

Tracy