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ivan@stellysee.de
| From | Michael Coxe <audities@gmail.com> |
| Subject | Re: Thank you, Jaimie |
| Date | Mon, 14 May 2007 16:10:55 -0700 |
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Michael Bennett wrote:
> There was a great New
> York Times article a few years ago about Ohio Arts, the company that
> makes the Etch-a-Sketch. The Etch-a-Sketch factory was in a small Ohio
> town and was really the entire economy for the town. Wal-Mart started
> selling Etch-a-Sketches, setting a low price point. In a couple of
> years, orders exploded. Sounds good, right? But with rising wages and
> health care costs, profits were flat. Ohio Arts asked Wal-Mart if they
> could raise the retail price. Wal-Mart said -- stay at this price, or
> we won't sell your product. The result? They closed down the Ohio
> factory and moved production to China. The small town was devastated.
Which is really sad as you can't "cover" or bootleg an Etch-a-Sketch
in the US, Europe or most other civilized countries - patents/copyrights.
Ohio Arts has been in the retail business for a long time and knows the
retail market as well as anyone. It was their fault for agreeing to
Wal-Mart's price point insistance. I can't believe they couldn't predict
the outcome. They're been though lots of business cycles. Management
greed & short sightedness. You don't have to sell thru Wal-Mart & many
companies don't, just like they don't sell thru Costco or Target for
the same reason.
Now if you're in a cost-driven business like high tech you might as
well sell to anyone since commodity pricing applies. But if you have a
monopoly - why? Blaming Wal-Mart is like blaming the devil IMO.
- michael
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