Competitive Advantages & Disadvantages
Dec. 23rd, 2012 09:27 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
mallorys_cameraThe wealthy industrialist turns out to have been a wealthy middleman. He took a prototype of some small but essential element in the electrical lighting chain to a Chinese factory 15 years or so ago when hardly anyone was dealing with Chinese factories. No, he didn't design the element himself.
No contracts involved. All done on handshakes and schmooze.
Pretty profitable business, though.
Then he dropped dead of a heart attack.
Fifteen years later, of course, every business is taking its manufacturing needs to Chinese factories, and the wealthy middleman's widow is down to supplying one product to one huge conglomerate.
The wealthy middleman's widow couldn't schmooze to save her life. I like her, but I have taken recently to announcing, "Enough, Deborah. I already know that," in the middle of one or another of her diatribes.
The last large conglomerate is about to 86 her one last small product.
She waylaid me on the street yesterday while I was out raking leaves. " – immoral! They have stolen the name of the factory –"
Well, hardly, Deborah. There it was on the outside of the packaging. In Chinese, of course, but you have to assume that a wealthy conglomerate that traffics in goods produced in China has at least one person on staff who can read Chinese. You really should have paid the extra five cents on the dollar to get those goods repackaged.
" – I have been doing business with them for 15 years! And in the last four years, I have not raised my prices once –"
"Well, that may be true, Deborah," I said mildly. "But that hardly counts as a competitive advantage."
She stared at me suspiciously.
"What do you mean, 'competitive advantage?'"
"Well, look. Businesses have been using middlemen to distribute goods for centuries. But the businesses have to see some sort of appreciable advantage from using middlemen. At the time your company was set up, that advantage was that very few companies in the United States were prepared to do business in China. But the B2B sector is completely different now. Everybody's doing business in China. So what can you offer them that they can't get on their own?"
She glared at me. "I have not raised my prices in four years."
"I can think of three offhand," I continued pleasantly. "One, you could be providing quality assurance. Everyone knows that Chinese factories are notorious for producing shoddy, substandard goods –"
"But I am not providing quality assurance!"
"That's not the point. You could be. Two, you could indemnify them for product failure. I wouldn't recommend that. Your insurance rates would go up drastically, and your company might be on the hook for a huge amount of money somewhere down the line. Three, you could have an exclusive contract with the factory producing the goods –"
"But the factory will just ignore the contract. They are in China!"
"Again, not the point. Your customer is in the United States where the contract is enforceable."
Her mouth moved silently, and she stared at me.
"I mean, it really depends upon how dependent your lifestyle is on the income you might be losing. Are you dependent on it?"
She stared at me for a minute and then named a sum. It seemed like an astronomical sum to me. "It pays my expenses so I don't dip into savings."
Oh, right. The expenses on the hoarder house where every room is packed with unopened Lord and Taylor boxes up to the ceilings.
"So you'd prefer to keep the income?"
"Yes, of course."
"All right! Well, then, you need to be proactive here –"
Upshot: I'm going to help her out by trying to dig up some dirt on the Chinese factory. I'm sure it's there somewhere. No, I'm not charging her for it. If you're thinking this is a lot of work for one lousy agora sweater, you'd be right.
###
The housemates are off to Georgia for the holiday. The house feels very empty without them. I've been occupying myself with cleaning – vacuumed all the public spaces yesterday, washed the kitchen floor, scrubbed handprints off kitchen surfaces – and of course, by tunneling down into the exciting world of copyrighting in an effort to bolster cash flow. I'm almost caught up with the ten days I lost from Hurricane Sandy.
The other thing I'm doing is making a Plan for the Coming Year.
I'd really like to volunteer to do the VITA tax prep thing again this year. I really enjoyed doing it last year. Oddly, given what a complete space cadet I am in so many ways, I have a real aptitude for numbers and strategic planning. Plus, you know, I was helping people, which I really like to do.
The VITA tax thing, though, is for poor people. And there are no poor people on Lawn Guyland. Except for me. So there are not VITA tax preparation centers. The closest is in Long Island City, which is way the hell out in Queens.
The other thing I've been thinking of doing is volunteering at a Suicide Prevention Center.
This is something I thought of doing while I was in Ithaca, except I felt too sorry for anyone who would get me on the other end of the lifeline. "Of course, you don't want to kill yourself!" I would prattle cheerfully. "Because, you know, you'll only be reincarnated and have to repeat the class again. The same type of shit will happen in your next life! Wouldn't it be better just to deal with it in this lifetime so you can come back as a bird or something?"
I think, though, the intense grief that poured out of me with Justin's death, gave me better insight. Apparently, Justin had been popped for a DUI in October. He didn't tell anybody. Stopped going to classes. Missed his court date. Figured his life was over, he was just another fuckup without options. So he decided to take the only option he figured was still open to him.
RTT learned all this because the day after Justin's Ithaca memorial, he drove 600 miles up to Springfield Massachusetts where a memorial was held at Justin's college. That memorial was pretty much a bust, so I'm glad someone was there to fly the colors. He went with two adults – NR's Dean of Students who also teaches African drumming classes, and counseled RTT when Ben decided to disappear off the face of the planet for two weeks way back when. And a friend of Justin's grandmother, a respected businessman in the Ithaca community.
After the memorial, the police walked them trough Justin's file. The file apparently contained photographs of Justin when they found him.
Shame killed Justin.
Shame is an emotion I am intimately familiar with. Shame is an emotion I deal with on a daily basis. You incredible fuckup, you don't deserve to live –
So, I think I know what to say to people who are fighting the same battle.
No contracts involved. All done on handshakes and schmooze.
Pretty profitable business, though.
Then he dropped dead of a heart attack.
Fifteen years later, of course, every business is taking its manufacturing needs to Chinese factories, and the wealthy middleman's widow is down to supplying one product to one huge conglomerate.
The wealthy middleman's widow couldn't schmooze to save her life. I like her, but I have taken recently to announcing, "Enough, Deborah. I already know that," in the middle of one or another of her diatribes.
The last large conglomerate is about to 86 her one last small product.
She waylaid me on the street yesterday while I was out raking leaves. " – immoral! They have stolen the name of the factory –"
Well, hardly, Deborah. There it was on the outside of the packaging. In Chinese, of course, but you have to assume that a wealthy conglomerate that traffics in goods produced in China has at least one person on staff who can read Chinese. You really should have paid the extra five cents on the dollar to get those goods repackaged.
" – I have been doing business with them for 15 years! And in the last four years, I have not raised my prices once –"
"Well, that may be true, Deborah," I said mildly. "But that hardly counts as a competitive advantage."
She stared at me suspiciously.
"What do you mean, 'competitive advantage?'"
"Well, look. Businesses have been using middlemen to distribute goods for centuries. But the businesses have to see some sort of appreciable advantage from using middlemen. At the time your company was set up, that advantage was that very few companies in the United States were prepared to do business in China. But the B2B sector is completely different now. Everybody's doing business in China. So what can you offer them that they can't get on their own?"
She glared at me. "I have not raised my prices in four years."
"I can think of three offhand," I continued pleasantly. "One, you could be providing quality assurance. Everyone knows that Chinese factories are notorious for producing shoddy, substandard goods –"
"But I am not providing quality assurance!"
"That's not the point. You could be. Two, you could indemnify them for product failure. I wouldn't recommend that. Your insurance rates would go up drastically, and your company might be on the hook for a huge amount of money somewhere down the line. Three, you could have an exclusive contract with the factory producing the goods –"
"But the factory will just ignore the contract. They are in China!"
"Again, not the point. Your customer is in the United States where the contract is enforceable."
Her mouth moved silently, and she stared at me.
"I mean, it really depends upon how dependent your lifestyle is on the income you might be losing. Are you dependent on it?"
She stared at me for a minute and then named a sum. It seemed like an astronomical sum to me. "It pays my expenses so I don't dip into savings."
Oh, right. The expenses on the hoarder house where every room is packed with unopened Lord and Taylor boxes up to the ceilings.
"So you'd prefer to keep the income?"
"Yes, of course."
"All right! Well, then, you need to be proactive here –"
Upshot: I'm going to help her out by trying to dig up some dirt on the Chinese factory. I'm sure it's there somewhere. No, I'm not charging her for it. If you're thinking this is a lot of work for one lousy agora sweater, you'd be right.
The housemates are off to Georgia for the holiday. The house feels very empty without them. I've been occupying myself with cleaning – vacuumed all the public spaces yesterday, washed the kitchen floor, scrubbed handprints off kitchen surfaces – and of course, by tunneling down into the exciting world of copyrighting in an effort to bolster cash flow. I'm almost caught up with the ten days I lost from Hurricane Sandy.
The other thing I'm doing is making a Plan for the Coming Year.
I'd really like to volunteer to do the VITA tax prep thing again this year. I really enjoyed doing it last year. Oddly, given what a complete space cadet I am in so many ways, I have a real aptitude for numbers and strategic planning. Plus, you know, I was helping people, which I really like to do.
The VITA tax thing, though, is for poor people. And there are no poor people on Lawn Guyland. Except for me. So there are not VITA tax preparation centers. The closest is in Long Island City, which is way the hell out in Queens.
The other thing I've been thinking of doing is volunteering at a Suicide Prevention Center.
This is something I thought of doing while I was in Ithaca, except I felt too sorry for anyone who would get me on the other end of the lifeline. "Of course, you don't want to kill yourself!" I would prattle cheerfully. "Because, you know, you'll only be reincarnated and have to repeat the class again. The same type of shit will happen in your next life! Wouldn't it be better just to deal with it in this lifetime so you can come back as a bird or something?"
I think, though, the intense grief that poured out of me with Justin's death, gave me better insight. Apparently, Justin had been popped for a DUI in October. He didn't tell anybody. Stopped going to classes. Missed his court date. Figured his life was over, he was just another fuckup without options. So he decided to take the only option he figured was still open to him.
RTT learned all this because the day after Justin's Ithaca memorial, he drove 600 miles up to Springfield Massachusetts where a memorial was held at Justin's college. That memorial was pretty much a bust, so I'm glad someone was there to fly the colors. He went with two adults – NR's Dean of Students who also teaches African drumming classes, and counseled RTT when Ben decided to disappear off the face of the planet for two weeks way back when. And a friend of Justin's grandmother, a respected businessman in the Ithaca community.
After the memorial, the police walked them trough Justin's file. The file apparently contained photographs of Justin when they found him.
Shame killed Justin.
Shame is an emotion I am intimately familiar with. Shame is an emotion I deal with on a daily basis. You incredible fuckup, you don't deserve to live –
So, I think I know what to say to people who are fighting the same battle.
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no subject
Date: 2012-12-23 03:18 pm (UTC)I love this way of thinking. Someone who probably has more money than they could ever spend, even if they live to be 250 years old, and yet they're afraid of "dipping into their savings." It's especially amusing when they're speeding in the fast lane, headed toward the Dirt Nap at top speed. But for fuck's sake, DON'T DIP INTO YOUR SAVINGS!
Sometimes, for laughs, I'd sit with my buddies and fantasize about how to spend the lottery prize none of us will ever win. All the other guys talked about investing the money in this and that, living off the interest, etc. etc. blah blah fucking BLAH.
"I'd give all but $4 million away, and I'd live on that. Figure spending a max of $100,000 a year. That'd last me forty years and I'll probably be dead long before then."
"But you'd be SPENDING YOUR CAPITAL," they bleat, as if any of us are going to live forever.
I guess the goal is to die with as much money as you can possibly accumulate, instead of living as simply and pleasantly as you can.
no subject
Date: 2012-12-23 03:36 pm (UTC)Of course, I have the right to make snotty comments about it too. :-)
The nutty Israeli neighbor grew up dirt poor, so I think psychologiically $$$ is very tied up with her sense of security. That's probably also the reason why she hoards.
no subject
Date: 2012-12-26 01:32 pm (UTC)no subject
Date: 2012-12-23 08:09 pm (UTC)no subject
Date: 2012-12-23 08:26 pm (UTC)Oh, you're totally right. I am just going to do some preliminary work for her. No more than an hour. And then if she wants more information or strategy, I'll turn it into a business arrangement.
I really can't tell her level of committment. From my perspective, she let a promising business just wither up and die. And it's not as though she actually needs this money.
Talking to her took me back to the days when I was doing corporate biz dev, which I always really enjoyed and had a real aptitude for.
You and Donna need to rent a car and drive up to Cambria to see Hearst Castle. I'm serious. Also, in January, the three of us should go to a museum together.
no subject
Date: 2012-12-24 04:52 am (UTC)no subject
Date: 2012-12-24 02:17 pm (UTC)no subject
Date: 2012-12-24 04:52 am (UTC)no subject
Date: 2012-12-24 02:18 pm (UTC)I need to stop thinking about him though.
no subject
Date: 2012-12-24 11:26 am (UTC)no subject
Date: 2012-12-24 02:20 pm (UTC)no subject
Date: 2012-12-24 11:31 am (UTC)Try to have a Merry Christmas...
And noglammit you found me on Facebook!
no subject
Date: 2012-12-24 02:23 pm (UTC)Something very similar happened to me when I was a bit older than Justin. I was too ashamed to talk to anyone about it. Like acid on the soul, that kind of stuff is. Suicide has never been an option for me though. I wasn't kidding when I wrote that you'd only have to come back and repeat the class. I honestly beieve that.
Sent you a Friend request on la FB.