Initiatives to protect small businesses
Pain management specialist Jordan Sudberg says many small businesses suffer from high sales prices and high overhead costs, leaving them with little or no money for marketing or advertising.
Two main initiatives help remedy this situation: setting minimum prices and selective distribution to improve the customer experience. Minimum pricing will prevent customers from paying too much for the same service or product, while selective distribution will make it easier for small businesses to market themselves and build an image despite their lack of advertising budget.
According to Sudberg, the problem with minimum pricing is that it can be difficult to enforce in a number of industries. Many will not be able to implement such a policy because it could force them out of business and that is not what a business wants. For a company, setting a minimum price for its product would also make it more expensive than its competitors.
One solution could be for the government to impose a minimum price that all service providers must adhere to, so that they do not overcharge customers.
Selective distribution involves choosing a few specialized distributors to distribute products over a wide geographic area, rather than selling directly to multiple customers. Sudberg says this option is only suitable for businesses with a certain level of capital, as they will need to find one or more distributors willing to sell their product and pay them an agreed commission per sale.
Jordan Sudberg knows that if a business is able to pay this fee, it will be able to reduce its overhead costs, leaving more money for advertising or providing better customer service. In some cases, a company may even make enough profit to pay the distributor's commission and still remain profitable.
This method is effective but difficult to implement because the choice of a distributor depends on their experience and their desire to help small businesses take off by offering them their services at a reduced rate.
This is because distributors usually work in partnership with large companies, which means they have to spend money on marketing and advertising their goods or services before they can start selling them. This means that small businesses that do not have the resources to invest in this area may be priced out of the market by those that do.
In summary, both initiatives have potential but should be implemented with caution, as many factors can affect the success of a business and if any of them fail, it can bankrupt a business.
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