So you are a hotdog vendor….
Take a little imaginary journey with me for a few moments. Let’s say that you are a hotdog vendor with a hot spot on the corner of Main and Third in Anytown. The hotdog business is booming and you are making enough cash to support your family with 2 beautiful children. You are not a huge corporation but a simple entrepreneur that invested your savings in a business. You don’t have any financing because you don’t need it, hotdog sales are paying your bills.
Then along comes a big marketer and sees that the hotdog business is booming and wants a piece of that action. Mr. Sleezy is his name. So Mr. Sleezy goes into work the next morning and reports at the morning meeting that hotdogs sales are booming. Over coffee and donuts, the execs at Middleman Corporation hammer out a plan to get a cut of the hotdog business without having to buy a cart. They decide to pay a beautiful swimsuit model to stand around the corner from the hotdog vendor at Main and Third in Anytown (that’s you, in case you forgot) and sell hotdogs for 50 cents more than the price of yours. As Ms. Curves (that is the swimsuit models’ name) is selling the hotdogs, Mr. Sleezy is taking the money and running over to you and buying a hotdog for your price, bringing it back to their customer, and pocketing the 50 cents extra.
Time lapse of 3 months…..
You find that you are selling hotdogs like crazy but only have one customer now. Yep, Mr. Sleezy. At first you don’t mind because afterall, your price is the same and you are selling more than you ever did to any of your previous direct customers. You know that Mr. Sleezy is making 50 cents per hotdog but his marketing has created a huge demand for hotdogs! Sounds good, huh?
Time lapse of 6 more months…..
Mr. Sleezy realizes that he is your only customer and starts to feel the power. He goes to the morning meeting at Middleman Corporation and announces that he has figured out a way to make more money in the hotdog business. So here is what he does. He comes to you and explains that the only way he will continue to buy your hotdogs is if you pay him a monthly membership fee to continue to receive his business. You are irritated but if you don’t do it then you will surely be out of business because you no longer have direct customers, your only customer is Mr. Sleezy. So you agree.
Time lapse of one year…..
Your profit margins have shrunk and since now Mr. Sleezy wants to only pay you every 45 days, your cash flow has virtually stopped flowing. Your vendors for hotdogs want paid and you are still making payments on your cart. You tell them that as soon as Mr. Sleezy pays you, you will pay them. So the envelope comes in the mail which is suppose to be your check. But what you find is a statement that says you owe Mr. Sleezy $100! The statement says that your membership fee went up, there is now a marketing fee, a quality fee, a sales transmission fee, and a fee for the new paper napkins that you are required to put under every hotdog.
Now, what do you do? Looks like you will have to either stop selling to Mr. Sleezy and try to get your customers back or close up your hotdog vendor business. So you tell Mr. Sleezy that you are not going to sell to him anymore. But Mr. Sleezy doesn’t care because there is a hotdog vendor a block away that opened up that he can buy from. You already know the fate of that vendor, the same fate as you. You lost all your customers, ended up far in debt, and can barely survive.
What is worse, your customers are now paying 50 cents more for a hotdog and praising Middleman Corporation for such good hotdogs and prices.
Cast of characters:
Hotdog: Flowers
Hotdog Vendor: Real Local Florist
Middleman Corporation: FTD, 1800FLOWERS, TELEFLORA
Swimsuit Model, Ms. Curves: The Internet, TV, and Radio
Mr. Sleezy: All flower order gathering companies like justflowers.com, florist.com, etc.
Moral: Cut out the middleman and buy direct from real local florists for the best quality, best price, best service, best delivery, best design.
