We live in an age of discounts. There are herds of people who call themselves thrifty and wait until things go on sale. Thrifty does exist, but a majority – if not all of the things we buy discounted are cheap. And this is ok for many of us, we expect inexpensive things to fall victim to holes, or inefficiencies – but it was cheap so we buy a new one.
This is one big problem. Our society is causing the the destruction of small businesses in the pursuit of bigger mega conglomerates like Wal-Mart or Target. Cheap is best we say. Here’s why we don’t win with lower discounted prices.
Wal-Mart currently employs 2.1 million people worldwide, and that’s not even mentioning the people who rely indirectly on Wal-Mart – like the manufactures. That’s nearly 2.1 million people who make minimum wage and/or just above it. These people have no where to shop other than Wal-Mart. The manufacturers that rely on Wal-Mart pay less than $4 a day to their employees. Wal-Mart is directly responsible for putting millions of people into poverty. Now lets see how in the 2008 recession – Wal-Mart won. Emek Basker found that for every 1 percent decrease in personal disposable income, Wal-Mart revenues increased by 0.5 percent. During the recession Wal-Mart announced a 6.1 percent rise in sales.
Because of our societal tendency to buy the cheap, we love Wal-Mart for what they offer, but they are actually destroying expertise. We’re losing small-business expertise because it is impossible to compete with those deep discounts. We’re trading in expensive well-made expertise for highly discounted junk.
And the worst part is. Only about 1-2 percent of items that the public knows the prices of are discounted heavily. 1/3rd of the stock Wal-Mart carries is higher than average prices. And the average savings on the rest of the stock is 37 cents. With 1/3rd of those items carrying a savings of no more than 2 cents.
Here is the distinction I want to make. If your a small business – recognize your expertise. Own it and position yourself this way. Use your superior customer service skills to get ahead. Don’t discount it. High quality services and products are rarely discounted – so show people that you are in a different league. Do not try and compete with Wal-Mart’s low rates.
As a small business you need ways to promote yourself in your local community. All it takes is a little experimentation.