Do you by default source from the big players in the industry?

[JakeThomas]

Was reading this morning that a supplier to Woolworths and Coles was up in arms at the lack of competition in supermarkets in Australia and that suppliers are constantly being being lumped with unreasonable demands.

This got me thinking to something that happened recently in my industry - An envelope supplier, who a few years back went on the attack to win market share by drastically dropping prices. This prompted the competition to lower their prices too and started a bit of a price war.

This (and what some said was bad management) resulted in this company going bust. At the time, they had an estimated 40-50% of the Australia Market share. As they could not trade while insolvent, thousands of orders were cancelled and many people had supply problems.

This got me thinking, is it wise to constantly just support the bigger players because their prices are a few % cheaper?

- Jake

[YVB]

Maybe because knowingly trading insolvent is not allowed? Bad management would also include trading or pricing at levels that aren't profitable or a mismanagement of assets (cash being one). It may surprise some people but there are many companies out there with multimillion Dollar turnover but are just breaking even or even making a loss, as size is not an indicator of profitability, one thing needed to remain in business.

In every industry there are the price buyers and because of scale the bigger players can generally offer lower pricing and lately a few % cheaper may mean the difference between getting or not getting work, which usually means being very clear on points of difference and value for the smaller players to get their share.

[Business Coaching Sydney]

Jake. You bring up an interesting point... is it worth it just to save a few bucks?
I believe that we are in a constant battle due to the big players. I buy my meat from a Butcher, my seafood from a fish monger etc. If I can support SME's then I will. However, If I am after hardware I go to Bunnings! After reading your post I thought... why do I go to Bunnings, and you know, I didn't until my local small hardware store went broke!
I guess, as long as SME's compete on price, they will lose the battle, all SME's need a Uniqueness so they don't need to compete on price!
My answer to your question, I believe we should support the sme's as long as they offer good value and service.
cheers