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Hunting Profits Is A Predatory Business

Whilst casually reading the newspaper one day, Jane Smith (not her real name), a portly young woman, stumbled upon an article about a company marketing something called a Powerhoop. 
She read how the Powerhoop is a new phenomenon, based on an old idea. The weighted Hula-hoop is used primarily by women to reduce the waistline, strengthen the stomach muscles, thighs and hips. Realising it could be the answer to her losing some inches around her waist, Jane immediately got on her computer with a view to an online purchase.

The original article was placed by the leading seller of Powerhoops in the UK (let’s call them) Hoops Are Us. The company is owned and run by a couple ‘seasoned’ entrepreneurs. They’re ‘old school’ not social media savvy and spend a great deal of money on PR, directed at traditional media.  

 Having found the Hoops Are Us website, Jane navigated her way to their checkout, whipped out her credit card, filled in the details and hit “enter”. With that the confirmation of sale page popped-up startling Jane with a £9.00 delivery charge on the. Nearly 10% of the cost of the product. She cancelled the order, closed the Hoops Are Us page, and googled for an alternative supplier.

Andy Johnston (not his real name) is a fully qualified personal trainer. Young and energetic Andy decided to become an entrepreneur when he opened a small gym. It’s a cosy affair, no bigger than a four car garage. However, Andy harbours lofty ambitions and will not rest. He expanded his business into the supply of sports equipment. It’s all online. He holds no stock, using a process called ‘drop shipping’. This allows him to sell virtually any piece of sports equipment (Long Tail) including - Powerhoops.

Unlike Hoop Are Us Andy markets his business primarily through the social media networks (Facebook, Twitter and HootSuite). Moreover, he’s become fanatical about SEO (Search Engine Optimisation).

 Jane searched on “powerhoops” and Andy (optimised as ever) pops up as one of the few that can supply the product. She zeros in on his delivery price. Happy with it, she whips out the credit card again, types in her details, places the order and Andy receives the money.

 The actual delivery cost to both Hoops Are Us and Andy for the delivery of a Powerhoop (they use the same facilitator) is in fact £8.50.

Andy charges £5.00 for the delivery of Powerhoops. He accepts the £3.50 reduction in his margin as part of the cost associated with winning the business. But like the hyena he hunts profiting from the work done by larger predators.

Small, aggressive, modern and light, when he strikes they lose their lunch, which becomes his dinner.