Tuesday, June 18, 2013

Big corporations hinder little corporations

Not quite always, some little corporations do grow into big corporations and some big corporations buy from little corporations.  But think how hard it is for people to start a company in many fields.

When I grew up in Cleveland, there were many grocery stores in walking distance of one place we lived and there were many drug stores and grocery stores in another place.  By walking distance, I mean less than ten minutes, more like five minutes.  Since we moved to Duluth fourteen years ago, a state-wide drug store has closed, a city-wide drug store has closed, and only two independent pharmacies are left.  All the others are in large chain stores and medical centers.

Now suppose you start a small company that makes a skin medication.  How are you going to get it into all those chain stores?  Will the local managers of those stores have the authority to buy local products on their own, or will they have to get corporate approval?  It depends on the company.  But if you had access to locally-owned stores, you would have a greater chance of getting in the door.

I'm only writing based on observation and not personal experience.  I know people who know people who are active in such a small company, and I have observed their marketing results.  The company is Apolonia B, a maker of a skin ointment.  When it first came out, it was available at the city-wide pharmacy, Falk's Pharmacies.  Falk's closed all of its stores rather than compete with the big chains.

As my own jar was getting low, I wondered where I would get a refill.  I checked Apolonia B's web site and found one retailer listed - Whole Foods Co-op (not to be confused with the national chain Whole Foods Market).  Bias warning: we are two of many owner-members and we shop at Whole Foods Co-op regularly.

I can only surmise that being a locally-made natural-ingredient product, Apolonia B was an easy sell to the buyers at Whole Foods Co-op and was probably too time-consuming to try to sell to the big chains.

Our choices for buying locally are dwindling.  At least we have a great choice in locally-owned restaurants and even locally-produced beer, many local hair salons, several locally-owned coffee shops, three or four locally-owned hardware stores, and one locally-owned camera shop.