It’s Do or Die for Small Business

Eric Najjar
Jul 10, 2017 · 4 min read

It’s easy to dismiss the intimidating giants that are Amazon, Petco, and PetSmart. As a small business they’re just too big to compete against. Unlike these billion dollar multinational behemoths, you’re small business doesn’t have a war chest or a multi-million dollar line of credit. Independent manufacturers can’t take advantage of the same economies of scale to increase margins and boost profitability and small retailers don’t have the purchasing power to drive down their average cost per unit. Not just that, but you don’t even have a marketing department. But it’s the summer, so you have Andrew. He’s a junior in high school and he’s going to help shore up your Facebook and Twitter accounts and might even create an Instagram for your store or brand, if you’re lucky.

Honestly, this is starting to sound a bit rough. After all, if you have no way to compete and your competitors have every advantage in the book, then what’s the point? Why not just close down or sell out and start a new life in Arizona, or Maine, or wherever?

The problem with those first two paragraphs is that they’re not true. Unfortunately, we’re told every day about the demise of small business. I get it, it’s catchy. People love a good horror story. It’s the reason we all know about the Hindenburg Disaster, while almost no one knows the story of Mary Seacole. We’re intrinsically drawn to bad news even when things in our life are going alright. It’s for this reason that the narrative has shifted to such a harsh tone in opposition to small business.

Now, I’m not saying that small and independent businesses aren’t facing an uphill battle, of course they are. What I’m saying is that the narrative has to shift in order for real change to take place. Let’s think about the advantages the aforementioned large competitors have. First, they have cash in the bank and credit on hand. Not only do they have credit, they have lower interest rates and better terms. This allows them to place larger, smarter orders while also giving them the high ground in negotiations. That’s economies of scale. In turn, their goods and supplies are cheaper meaning they can retain higher margins or drop their prices to better compete throughout the market.

In respect to small business this is a vicious cycle. The narrative is that small business is failing, even if they’re not. This artificially reduces creditworthiness which makes purchasing goods riskier and a more direct cost. It means fewer products could be purchased, which drives up the cost per unit and reduces margins. The ultimate result is a self-fulfilling prophecy, small businesses actually start to fail. What’s worse is that it leads to contagion. When one small business goes bust it puts a blemish on all the businesses around it. While it’s not fair it doesn’t have to be. No bank or supplier is going to believe you when they hear every day that small business is failing.

If you want to save small and independent business, you first have to change the way you think of it. I hear every day from business owners who tell me that things aren’t the way they used to be. Of course they’re not. Times change and tools change. It’s up to us adapt. It doesn’t help anyone to hear only of the problems and nothing of the solutions. And believe me, the solutions are out there. When everything is in flux there are two things you can do. You can wait and see how the landscape changes or you can get in there and change the landscape for yourself. Small businesses are scared because they woke up one day and all the rules had changed. I don’t blame them. Who wants to spend time and expose themselves to even more risk after realizing their not in direct control of the market around them?

The thing is, everything is moving towards standardization through decentralization. This is the perfect environment for small businesses to succeed, but first they have to change the way they think of themselves. I think people forget that Amazon was started by a man selling books out of his living room. It’s time for small and independent businesses owners to think about the future they want and make it theirs.

We’ll be here to support you.


ShopKetti is a wholesale platform connecting independent creators and retailers in the pet industry. Explore the community and join for free at shopketti.com

ShopKetti

A Small Business Startup Simplifying Wholesale for Independent Business

Eric Najjar

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Startup starter on a mission to help small businesses succeed. Learn more at ShopKetti.com

ShopKetti

ShopKetti

A Small Business Startup Simplifying Wholesale for Independent Business

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