Big businesses move in circles many in small business cannot comprehend. Deals are interlocked favors which build layer upon layer and in a way which cuts out all other players.
National and global corporation relationships are such that small business has no hope in achieving a level playing field.
I’m not writing this to be critical of big business but to acknowledge the reality of the game. On the iTunes deal announced last week, Apple wants to sell more iPods, Coles has the retail network so it is logical that they enter into a mutually beneficial deal. Small businesses, like newsagents, never had a hope because Apple wouldn’t seem them on the radar as relevant. While newsagents have more stores than Coles, they lack the one think which Coles leverages exceptionally well our of their head office – market power.
The only way small businesses and, specifically, newsagents, will be able to leverage in a way similar to Coles will be for them to create and or control products and services exclusive to their channel. It may be that the focus is on premium service, for example – service so good that customers rave about it. If newsagents can deliver that and have customers talking up the line that they prefer to deal with newsagents then suppliers will want to tap into the goodwill built through such service.
I appreciate that this is less tangible than an exclusive product as such. However, it is something which newsagents and, indeed, all small businesses, can own today. But it’s a chicken and egg situation. You need great traffic to be able to serve enough well so they rave about you and you only get the traffic if you have good current product and right now you’re only getting this if you’re a big business mate and doing a reciprocal deal.
Apple has tainted its image by doing a deal with Coles Myer and hopefully consumers will see it that way and not purchase recharge at Coles stores.
In the meantime it would be good if our politicians researched deals like this from a policy perspective and assessed whether they are in the best interests of the consumer. The last time parliament research anything like this was in the late 1990s. Small business is not on their radar it seems.