Imagine that you are selling something that you simply cannot sell or produce in large volumes. This something becomes a golden opportunity for you, as you don’t even reach the level where economies of scale become noticeable. What should you do in such cases? Produce something else that doesn’t contradict your moral principles. Or use some scale-efficient resources in collaboration with someone else.
For example, a company produces “organic” products. Their level of development is at the starting stage. They dream of purchasing equipment for the production and packaging of butter. For now, they do everything almost manually, using quite ordinary household appliances. They produce as much as 70 kilograms of product a day, and they barely have their own transportation to deliver goods from another region to Kyiv. They send it via a minibus in a thermal bag. The minibus runs once a day. Their sales channel is very limited. Home delivery of products is impossible due to the lack of their own vehicle. There’s no way to increase sales. As a result, the product is priced so high that it is only sold by one wine boutique in the city.
They are hindered by high moral principles when it comes to producing “non-organic” products. However, their growth is limited by transportation, which they cannot afford. If they had transportation, it could also facilitate home deliveries and expand their distribution network. This would lead to a new level where expensive and sophisticated equipment could operate at full capacity.
But besides organic and chemical, there is something in between that aligns with moral principles — the so-called “homemade.” A slight step back to the level of market trading would provide them with both profitable transportation and delivery of “organic” products to those who need organic, and delivery of “homemade” goods to those who need “homemade.”
In order to distance oneself from anonymous It’s enough to simply keep track of the product’s lineage and not mix raw materials from different cows. This way, the consumer can be assured that the likelihood of contamination is minimized. After all, the risk of poisoning and infections, and the need for pasteurization, arises from the fact that one contaminated liter mixed with a ton of other milk can make the entire ton unsafe.
In other types of businesses, it can often be worthwhile to consider allowing yourself to engage in something else so that your main product can share costs with that additional venture. For example, ice cream vendors start selling other products in the winter—like frozen vegetables. They may not make a significant profit from it, but the distribution and logistics structure doesn’t sit idle in the off-season, and that’s the main thing.
Sometimes the only way to reduce the cost of promoting your product is to sell your competitors’ products. If certain strategic or high moral principles prevent you from doing this, you can always create a channel of seemingly independent sellers that you sponsor and support for one reason: to have them offer your product first, and only then the competitors’ products.
Such sellers would be able to ensure sales volumes that would allow them to make a profit, and your product, whether it is of rare demand or low production volume, would be sold as if these sellers were solely focused on it.