Even More Brits Get Rich

Here is more on the Brits Get Rich Discussione.
On Jul 22, 2008, at 2:12 AM, dun.com> wrote:

OK, I'm not cogniscant of the outlook so much in the US, but although the mortgage crisis is going to affect business in Europe as well, is it really going to be as catasrophic as this?? You're saying that the real estate boom and remortgages has fuelled consumer spending artificially and so when consumer spending has to cut back it's going to wipe out large swathes of companies, such as medium sized cushion manufacturers?
*** Not going to be, is already. The policies of the US Fed and the cooperation of the other central banks in printing money profligately, low interest rates, easy credit over the last decades in particular, has led to massive misallocation and malinvestment. Bankruptcy filings are up 45% first half of 2008 in USA... 3200 martial arts studios to name one segment have closed down in May alone. Cities and counties are going bankrupt due to dramatic drop in tax revenues (biz and real estate taxes). Yes, it is that dire already, and it is early yet. Vance and and Tony believe they are smart because they made money when everybody made money. Now they are being taken because they think they are smart.

Of course there is money to be made, such as the Chinese who are selling vance forests and quarries, and taking tony's money to build factories, when you can drive around china and see plenty of unfinished factory buildings, abandoned. The problem in China right now is labor shortage, not finance.

There is also plenty of legitimate money to be made, plus, if your goal is to spport a lifestyle, you can make more money that you know what to do with doing well while doing good.***

Tony is selling to a large/medium sized chain in the US though, those guys always pay on time, no?
***No... Bed Bath and Beyond is in trouble, Macy's is for sale, as are most in both of these fellow's customer base. The mass merchandisers are doing fine, the upscale are doing fine. Mid market is in trouble. the first thing they do is slow pay...***

Vance is already selling direct to consumer in the UK and getting paid, going into China doesn't change that? Unless I misunderstand you.
***Your premise is Vance is "just seeking wider margins..". he would say that, wouldn't he? My premise is his UK biz if folding, and these China antics are desperation moves.***
Also something else you mentioned before... You said that these guys have the wrong strategy to go big to get the price down, because the Wal Marts of the world can always buy cheaper. I'm not saying they're competing on price mind, I just think they're hitting a specific price point for the quality, design, service they provide. Anyway, you say that Walmart would just go in and take Tony's order but cheaper. However... there must be a place for companies competing on the scale of Vance's and Tony's operations, because they both get orders. If the Walmarts serviced that market or were cheaper they wouldn't have any sales. I think there are two reasons:

- Just like we provide a value to retailers by splitting up the minimum order quantity, Tony provides a value to retailers, because he accepts lower orders than the big importers, and because he will have a larger range of designs due to them not being manufactured in huge quantities. Also, the customers don't want the same design as everybody else.

*** $3 million dollar orders for 4 pillows at FOB is big biz... he will meet plenty who will beat that...If I was his chinese factory partner, I would undercut tony without him knowing, break him financially, then own the factory and cut tony out, and have the advantage of not having to amortize the cost of the factory in the cost of the pillows, because tony sunk and lost the money. The scene where Tony is at the trade show worrying about people taking cell phone pix was funny, because his biggest threat was standing next to him... his partner! Tony and Vance got the partners they deserve. The first rate biz people would not work with Tony nor Vance.***

- Dealing with small/medium sized retailers is not hte core business of the big importers/wholesalers, they leave that to the likes of Tony.

***I've seen so many Tony/Vance's go under.***

John

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