So we’re perhaps all fully aware of how an open and free market works, but things have gone a little further than that in that the market has opened all the way up. It’s no longer just a matter of anyone being free to do business with anyone else, but rather a case of the kind of transparency which comes with just looking up the supply-chain. Consequently, the question is how does one distinguish themselves or their business, service, offering, etc, in a world where the consumer can very easily go straight to the source?
One OEM, many resellers
This is pretty much how things currently stand in economic markets across the entire world really, including those territories which refer to themselves as operating under the socialist or communist economic model. At the end of the day those economies participate in the greater global economy, which would naturally mean that they operate under the free market, capitalist system, even if only for the duration of the time they participate in cross border deals.
In that regard one major model seems to be consistent in that there are pretty much just a few OEMs (Original Equipment Manufacturers) while the rest of the “suppliers” basically just buy that original product and then resell at a mark-up. Some retailers go on to refine that original product in some or other way, perhaps integrating it with original equipment from other OEMs and then selling it on to the end-buyer who is basically just the consumer.
In this day and age however, consumers perhaps don’t know that they’re just one phone call or email away from dealing directly with the Original Equipment Manufacturer, in just about any field. It doesn’t have to be physical equipment or products, but can rather entail something like digital products. For example, a lot of software applications are built on top of open source development languages and platforms, which means the end-consumer who has knowledge of development and programming could very well go directly to this “open source” and not have to pay the service fee levied by retailers who build a product with that open source software and sell it on as a value-added service.
Okay, so perhaps people do in fact know that they can bypass just about any retailer and head straight to the supplier, but the reason they don’t is because they see value in the intermediate retailer acting as their buffer. It’s more a matter of convenience which is sold on as tangible value, for example you wouldn’t want to drive 90km just so you can get something 2 pence cheaper from the original producer as opposed to getting it at the retail price at your nearest store.
The same applies to something like an online casino platform which basically offers the same games as any other one. You find value in distinguishing factors of convenience, like being able to play offline casino games which you can enjoy when you don’t have access to the internet. That’s basically how the competitive advantage is gained in what is a wide open market – creating added value the consumer just can’t go without.
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