Competing with the the top of the Supply Chain?

[bboyu]

Hi guys I'm back with some questions. This thread is an offshoot of a very old one by @biophase : https://www.thefastlaneforum.com/co...s-or-is-it-just-bad-business.7035/#post-23298

The question is quite similar to the one raised by @biophase. His premise was different in the sense that he wanted to know why wholesalers/manufacturers would sell direct to the consumer and not maintain their B2B function to which @MJ DeMarco replied:

"What you're experiencing is the ability of manufacturers to now directly sell to the consumer via the internet. Without the internet, this would not happen. The web is destroying the middleman and allowing manufacturers to go directly to the consumer. This is one of the many things the internet will ultimately destroy behind stockbrokers and travel agents ... you might not like it, but the manufacturer loves it and the consumers get the best price. Being a distributor is a fastlane passenger arrangement while the manufacturer is the driver ... its all about control."

What I want to know though is what are you supposed to do when you see manufacturers selling directly online from the get go or once you have set up an arrangement - with them and they see how much business you have generated for them - that they decide to undercut you completely and go direct to the consumer?


What do you do from the beginning to account for this or prevent this from happening? MJ, when you are bootstrapping something and have no other way to begin but as a middleman - what do you do?

If you look at starting a business and select a business you would like to go into - this issue would and probably does occur with majority of businesses - by a process of elimination - if you was to boil down to a model where this may not occur - you wouldn't be left with many choices for businesses to go into would you?

I may be wrong. Please can you guys shed Light on this for me? @zen******* @MJ DeMarco @biophase @JackEdwards @RichKid etc etc and any other legend that can share their wisdom.

 

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[TWR]

How about manufacturing the goods yourself?

Not always possible but it's the avenue I am going down at the moment and I now have more control. The main thing being that I don't stop at 5pm like the distributors, no more long waiting on delivery plus easy customisation for the consumer.

Not a legendary answer but that's my 2c

 

[Mike.B]

Hi guys I'm back with some questions. This thread is an offshoot of a very old one by @biophase : https://www.thefastlaneforum.com/co...s-or-is-it-just-bad-business.7035/#post-23298

The question is quite similar to the one raised by @biophase. His premise was different in the sense that he wanted to know why wholesalers/manufacturers would sell direct to the consumer and not maintain their B2B function to which @MJ DeMarco replied:

"What you're experiencing is the ability of manufacturers to now directly sell to the consumer via the internet. Without the internet, this would not happen. The web is destroying the middleman and allowing manufacturers to go directly to the consumer. This is one of the many things the internet will ultimately destroy behind stockbrokers and travel agents ... you might not like it, but the manufacturer loves it and the consumers get the best price. Being a distributor is a fastlane passenger arrangement while the manufacturer is the driver ... its all about control."

What I want to know though is what are you supposed to do when you see manufacturers selling directly online from the get go or once you have set up an arrangement - with them and they see how much business you have generated for them - that they decide to undercut you completely and go direct to the consumer?


What do you do from the beginning to account for this or prevent this from happening? MJ, when you are bootstrapping something and have no other way to begin but as a middleman - what do you do?

If you look at starting a business and select a business you would like to go into - this issue would and probably does occur with majority of businesses - by a process of elimination - if you was to boil down to a model where this may not occur - you wouldn't be left with many choices for businesses to go into would you?

I may be wrong. Please can you guys shed Light on this for me? @zen******* @MJ DeMarco @biophase @JackEdwards @RichKid etc etc and any other legend that can share their wisdom.

There are many manufacturers that do not benefit from disintermediation, and probably never will. You can always concentrate on adding value as an intermediary (reintermediation) and work with the manufacturers. Selling direct to retail, or consumer, takes away from the manufacturers core competencies in most cases, which is why many will never move away from their intermediary relationships. I don't believe you'll ever be able to sell everything directly to consumer through online distribution channels.

 

[biophase]

Wow, that's an old thread. If it were me I'd stop selling the item and sell a different one. No reason to compete against your supplier. But the ultimate answer is that you need to eventually sell your own products.

 

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[bboyu]

Okay when you say own products do you mean, your own brand or something which you got created, yourself? But then the manufacturer could start competing with you? How would you manufacture something yourself? Literally buy equipment to make it or what? How would you make yourself " safe" from the get go? Without using patents and all of that.

 

[Runum]

Become product agnostic.

Spend time developing your system and then plug in any product you choose.

 

[bboyu]

Become product agnostic.

Spend time developing your system and then plug in any product you choose.

Can you please expand on this? How does one do this? How do you create a system instead of a brand or product/service that you stand by? How do you function as a business this way as in what do you stand by on a daily then in terms of "providing value" to the market? How can you set yourself up that way and be that efficient and not lose out on business? Please expand on that information.

 

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[Runum]

Can you please expand on this? How does one do this? How do you create a system instead of a brand or product/service that you stand by? How do you function as a business this way as in what do you stand by on a daily then in terms of "providing value" to the market? How can you set yourself up that way and be that efficient and not lose out on business? Please expand on that information.

Finding products is what most people spend a lot of time looking for.

What if you found customers first and then product to fill the need?

Setting up the selling/marketing process and strategy is often an overlooked part of the overall system. EBAY and Amazon are easy, other methods of selling are much more of a challenge.

If I can find demand and a product, I add value by getting the two together in a manner agreeable to both the customer and supplier.

 

[bboyu]

Finding products is what most people spend a lot of time looking for.

What if you found customers first and then product to fill the need?

Setting up the selling/marketing process and strategy is often an overlooked part of the overall system. EBAY and Amazon are easy, other methods of selling are much more of a challenge.

If I can find demand and a product, I add value by getting the two together in a manner agreeable to both the customer and supplier.

So what is the best way to find "demands" regardless of any market? Market segmentation? Is this the best way to approach markets? As one segmentation would most likely go through and consume many different products transcending industries and markets ? What do you think?

I find looking at amazon bestsellers and eBay's completed listings as mind boggling - because it's like MJ said "the market doesn't care about you" - you could be looking at the screen all day wondering what shall I sell at the end because all you want to do is jump in and then sell "a" product.

 

[bboyu]

But the ultimate answer is that you need to eventually sell your own products.

Bio can you please expand on this? Do you mean manufacturing yourself? Literally buy equipment to then make the product?

What if you cannot do that yet?

Please elaborate and if you can give some more info on how you structured your Ecom biz from the get go after - you made your mistakes - to overcome obstacles like this and then make it all your own - with your own products.

 

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[biophase]

Bio can you please expand on this? Do you mean manufacturing yourself? Literally buy equipment to then make the product?

What if you cannot do that yet?

Please elaborate and if you can give some more info on how you structured your Ecom biz from the get go after - you made your mistakes - to overcome obstacles like this and then make it all your own - with your own products.

No, I mean get a factory to make your own products and begin starting your own brand.