Toward Healthier Markets...

In a previous post I stated the following:

“If your business is doing well, it contributes to the overall health of the marketplace. My business is healthier when it exists in a healthier marketplace.

If your business is falling apart, it negatively affects my business. Not because I can't sell to you, but because a failing business is a drag on the entire market.”

This concept is ignored when I race to the bottom on price. If I cave to demand and come in with the lowest price possible, I will have to ruin the integrity of my product in order to survive. This destroys your business and mine. Your business suffers because customers will not return if you sell shoddy merchandise. My business fails, because I no longer have you, and other businesses like you to sell my products to. By seeking the bottom, we end up there.

By the same token, it makes no sense for me to charge more than my product is worth. Not because my competitor will beat me on price, although that will happen too. It is foolish to overcharge because doing so weakens the purchaser. If you can't recover the value you expend for products you use in your business, your business suffers, and again, the health of my business is tied to the health of yours.

The goal of the market builder is to work within a market to expand the value to all participants within the market. Too often the market is seen as a “zero-sum game”, in which there is a finite number of dollars, and every dollar that company “X” gets is one less dollar available for company “Y”. In a healthy market, the available sum of money is limited only by the creativity and willingness of producers to continually build value into the market.