Beware the Monopolist
In my first business, the game store, we maintained three wholesaler accounts. One was our main supplier, the largest on the US. Another was with a smaller but up and coming supplier that provided us with a back-up source for hot products and a slightly more diverse array of options at the edges of the popularity field. Our third account was with The Devil.
This company was not actually the Great Satan, but I have chosen to alter their name to protect the guilty. You see, the Father of Lies maintains a monopoly on a single line of products representing perhaps 30% of our sales. They are the original manufacturer of the product, a set of games consisting of thousands of products sold separately. They do not work through middleman/wholesalers so their product is only available through direct purchase.
The Morningstar had a monopoly, and boy did they know it. As a new account holder, we were generously allowed to purchase their products at 68% of retail, so long as we placed a minimum $6,000 initial order (a number talked down from $10,000). (Most retail products are purchased for between 45% and 55% of retail.)
Lucifer’s service as a supplier was slipshod at best. No shipments had to be so thoroughly checked and double-checked as the shipments we received from them. We never once received an order that did not contain at least a half dozen missing or swapped items, and no less than half of the packing slips were incorrect.
Every month we discussed dropping our account with The Lightbringer, but every month we concluded that we had no choice but stay on the hook. As I stated above, 30% of our sales were of their products. Although this represented only slightly more than 20% of our profit due to their niggardly pricing, one fifth of our business was still too steep a price to pay for the convenience and relief of freeing ourselves from the yoke of The Fallen One.
We failed to consider the terrifying leverage granted that company by its monopoly, a failure we will always regret. It is possible that a completely different business model, built from the ground up to exclude His Infernal Majesty’s ubiquitous products might have succeeded, but once we had a thriving customer base steadily purchasing their products, denying them the products would have devastated our business’s burgeoning Good Will.
Beware Old Scratch, folks, whatever guise he wears. Look for a way to avoid working with monopolists, even if it means re-thinking your product lines and business model. No one can hurt you like the guy who knows you need him, and, in business, he will hurt you every time if it means an extra buck in his pocket.
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