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Is it all about the price? Businesses are not Commodities

Consumers sometimes look at the products that they buy as commodities. Products are typically considered commodities when there is high demand for that product, but without a distinction between the brands that represent them. Simply put, commodities are all about the product with no consideration about that value, or lack thereof, which comes with the purchase.

Businesses as Commodities

Business owners, especially small business owners need to take care that their business is not viewed as a commodity by their customers. When your customers think that the only difference between your store and your competition is price, you begin a race to the bottom. Profitability vanishes, and one or sometimes both of the competitors go out of business.

To prevent this and maintain a healthy and profitable business, you have to create and develop a point of difference between you and your competitors. In marketing this is called a Unique Value Proposition.

A Unique Value Proposition (UVP)is the reason why a customer should buy from you and not your competitor. It is what you offer that makes your store a better choice. It answers the question of why customers should buy from your store.

Most customers will pay a little extra for the added value and service that they can’t get from your competitor. Knowing what your UVP is and focusing on it will help you to grow your business and your profits.

Do You Treat Your Suppliers as Commodities?

Doing Business RightWhile we’re talking about commodities, sometimes store owners make the mistake of looking at their suppliers as commodities. Getting the best price is important; you need to be competitive and maximize you profits. But it’s important to look at the big picture and realize the true costs involved.

  • It is easy for a distributor to gain your business by promising a lower price, but if the product is allocated, or they’re out-of-stock when you need the product, you’re actually paying a higher price in lost sales and possibly lost customers. Does your supplier have the product that you need, when you need it?
  • Shipping and delivery errors are bound to happen on occasion. Are they affecting your store or worse…your customers?  If there’s a mistake, how far will your distributor go to fix the problem for you – regardless of whose fault it is?
  • Every business sees ‘spikes’ in sales that wipe out your normal inventory levels.  Does your distributor work like your business partner to get you the product you need, when you need it, in an emergency?


Determine your Unique Value Proposition, develop it, focus on it and keep your business growing and profitable; keep it from becoming a commodity. Look at your suppliers’ UVPs; are they in line with your business’s plans and goals? Are they what you need to increase your store’s profitability and success?

Shopping Bag Full of GroceriesAt Hibbert & McGee we strongly believe in providing a strong UVP. If you aren’t satisfied with your current supplier or distributor please contact our sales department as we would love to discuss the opportunity of partnering with your store.

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