Big Fish, Small Pond?

Everyone is familiar with the rhetorical question “ would you rather be a big fish in a small pond or a small fish in a big pond” or any number of similar phrases. What I have come to realize is that many (most) people automatically think the question has something to do with the size of the fish! The reality is the focus is the size of the marketplace you choose to swim in. Another saying is “if you think of yourself as a big fish, be sure you aren’t swimming in a puddle”.

So what we have is personal perception and marketplace impact. As with most things, there are benefits and liabilities to consider. Let’s examine the small fish benefits since so many distributors are essentially small businesses - many are 1 person enterprises. 

Consider the cost to operate your business as a starting point. Do you work from home? If you do, and like most others, don’t charge your business rent (maybe just take a tax deduction for home office), then you eliminate what could be a significant cost. What about phone, cell phone and Internet? Are they being provided for your business, shared with personal communication or fully paid by your business? What about your computer? Your car? Are they business utility and personal benefit or a business cost to be calculated?

In general I have found that “small fish” don’t go to great lengths to build structure to their business. They have vast opportunities as the large marketplace (big pond) is almost limitless. Being small also allows for moving fast and avoiding much competition.

On the other hand, liabilities can put pressure on your business. If administrative activities increase faster than sales, that can take your attention away from working with your customers/clients, the only activity that makes money! Growth can also put stress on your working capital. Some take “baby steps'' and find organizations that will get some better nets from suppliers, but that generally does not eliminate the administrative burden. Others find service providers with many options to stimulate growth and profits. I call these organizations ‘Specialized Distributors’ because the best ones are dedicated to serving their members and do not handle any direct to customer business. Services may include the same or better supplier pricing as buying groups, order financing, advanced profit payments, exclusive arrangements  with top rated suppliers, sales contests, annual bonuses, resort trips, private trade shows, merchandise program setup, free web based business platforms, exclusive catalogs in print and online, and more. 

Obviously not all services will be offered by different specialized distributors so be sure to shop around to find the right fit.

Keep in mind that if working with a specialized distributor is right for your business, you will also achieve some “big fish” status without the potential negatives of just being in a puddle. Be sure that you check the public perception of the company, credit ratings (D&B), how long have they been in business, how many other businesses like yours work with them. Ask your suppliers if they pay their bills on time. And be sure your customers remain YOUR customers. 

If working with a specialized distributor is not a good fit for you right now (it might be so taking a look can’t hurt), promoting your “smallness” can be an  excellent way to engage with your clients. Be a “boutique” for customized business promotion. If you put your focus on what your client wants to accomplish and not on products or  what’s on sale, you instantly leave online sellers and other competitors behind. Building a relationship with a great graphic designer is a perfect way to add services without having to hire staff and the perception and scope of the work you do will continue to grow. 

There is a quiet trend lurking in the edges of the promotional industry as we know it. The trend even has a name - disintermediation. Basically it means eliminating the middleman. When “promotional products” is the focus instead of promotional advertising (promotional products media), technology based online “merchandise” sellers are tough competition. They can take all the advantages of the big pond away and the small pond will eventually turn into a puddle!