Want to avoid monopolies and oligopolies?

A lot of people are interested in avoiding big monopolies and oligopolies such as Proctor and Gamble. But your lotion’s P&G. So is your soap and laundry detergent. You think about what brands you could use that don’t have these, because you want to support small business and entrepreneurs.

I can think of plenty of independent brands with top-notch products. Nicka K makeup, Neeso jeans, Lucky and Dalan soaps, Madina and Mitchell beauty, Sun detergent, Satin and Avatar hair dye. Now, you may be familiar with these brands, or you may not. If you are familiar with these products, you may know them as brands available in dollar stores, discount stores, urban beauty supply stores, and multicultural supermarkets. You may attach a certain stigma to them, for example, Neeso apparel is mainly distributed through local chains that are viewed as low end, and Madina is distributed through street peddlers.

Now I’ve used Madina beauty products as well as their competitors, such as L’Oreal, and Madina actually performs better. But L’Oreal is sold at Walgreens, while Madina is relegated to dollar stores and peddlers. Why are independent brands generally found in inexpensive stores and stigmatized as cheap? This doesn’t just apply to makeup and jeans, but also to food products such as “low end” cheese brands I’ve found in dollar stores.

This is because people that own mid-sized chemical plants and clothing warehouses in suburbs have a tough time getting their product sold at national stores such as Walmart, Walgreen’s, Target – and Sephora, Nordstrom’s and Whole Foods. The key word isn’t low quality, but mid-sized. Walmart is going to want a delivery of 2 million units, for example, while independent stores – the majority of which are dollar stores – are going to be fine with a delivery of 2000 units. If your factory’s capacity is not very high, you’re going to sell your stuff at dollar stores and make money off of low margin and high sales. This is also because as an independent brand, you’re not as well established.

Some independent brands choose to stay in the mid-range category and market solely toward dollar and discount stores. Eventually, they might end up on the shelves at Walmart or Dollar General and gain a cheap, generic reputation in the public’s mind. One example of this is Arizona iced tea, which started as an independent company, but which quickly expanded to corner and grocery stores throughout America. Arizona is a delicious drink with top-notch ingredients, but it is seen as a preferred beverage for college students, instead of as an adult refreshment.

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