Combatting the Acquired
Today’s post is from Patrick Quinn is a Procurement Specialist at SafeSourcing Inc.
It is no secret that the illusion of choice exists in every industry. Most brands you find at the store are owned by only a few companies, and the same problem exists for almost every manufactured product that we see in our homes. This observation can be quantified when you look at the total number of listings on stock exchanges from year to year. In the mid-1990’s, over 8,000 companies were publicly traded on the NYSE and Nasdaq. Because of the 2008 recession that number dropped to around 3,600, and as of Q1 of 2022 6,296 companies were on the two markets. But the growth has slowed down over the last several years. In 2018, 5343 companies were traded, so where has the growth gone?
Instead of going to market for capital, growing companies are acquired and become a brand under a larger firm. More and more industries have been heading this direction and the parent companies can control prices further and further. This can make comparison shopping incredibly difficult, as the more brands and names appear, the fewer options there actually are.
But, instead of letting the same big firms share the space in your market and control each and every price over and over, there is another option. Tip the space between the firms towards each other make them compete directly for your business. An eRFQ forces these firms to acknowledge each other’s existence as competition, if even for a moment. The results can be quite fascinating to see, and beneficial for your bottom line.
To help you pit the big guys against each other, please contact a SafeSourcing Customer Service Representative.