Now it's official - Herbert Motzek wants to quit
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I agree with this somewhat. I am surprised at the amounts people are asking for in a group buy thread knowing a little background of the company and how difficult it is to get tobacco shipped from overseas. However, maybe this large of an order is just the thing this little mom and pop business needs to turn the corner and start making some real money. Maybe they will find an investor or sell to one of the big companies now.
A process being labor intensive is not cause for cancelation of a product in demand. On the contrary, it means the product should receive a valuation that best reflects the costs and the process simplified as much as possible.
If the producer refuses to scales up then there is little that can be done, however demand can never be caused for closing shop.
As for the group purchase, in the event that the order is toolarge, it can always be partitioned to meet supply capabilities.
Either way, this is far from what many a business men would define as a train wreck.
If the producer refuses to scales up then there is little that can be done, however demand can never be caused for closing shop.
As for the group purchase, in the event that the order is toolarge, it can always be partitioned to meet supply capabilities.
Either way, this is far from what many a business men would define as a train wreck.
Of course demand can contribute to the closing of a business. Too much demand can exhaust and divide owners. I've seen companies fold up because the owners become overwhelmed by the demands of increasing production. I've seen small family operations fold because one partner wants to grow and the other wishes to maintain. One may be perfectly content with the status quo, the other, a bit greedier, wants to increase production.
Warren you are actually only driving my point forward, as in all of your examples it is not the demand that brings a business to close, but the unwillingness to scale or owner rivalries and disagreements.
Should the aforementioned owners agree on maintaining the status quo, they would be perfectly capable of refusing business beyond a certain quota.
A business can always say no.
In a free market, usually someone would capitalize on the limited supply by dominating the supply and reselling at a premium until the producer lifted prices to maximize their own share of revenue.
If the status quo would remain without scaling and without increasing prices, the prices would eventually rise regardless.
Perhaps pipe tobacco being an industry limited in size see these trends happen at a far slower pace than others.
Should the aforementioned owners agree on maintaining the status quo, they would be perfectly capable of refusing business beyond a certain quota.
A business can always say no.
In a free market, usually someone would capitalize on the limited supply by dominating the supply and reselling at a premium until the producer lifted prices to maximize their own share of revenue.
If the status quo would remain without scaling and without increasing prices, the prices would eventually rise regardless.
Perhaps pipe tobacco being an industry limited in size see these trends happen at a far slower pace than others.
That's what is happening here. The question is who will capitalize on the opportunity, or is the Strang appeal limited to the internet?
Some people like having a small business and don't want to scale up and deal with those headaches. We're talking about an older couple that seem quite happy to produce a limited amount of a high quality product. Also how often are people going to order 15 pounds? You scale up production and then find the market is still smoking the last big order and won't order again for a year or so.
Sometimes making a little money and being happy is better than taking the risk and effort of being bigger just for a little more money and maybe less happiness.
Sometimes making a little money and being happy is better than taking the risk and effort of being bigger just for a little more money and maybe less happiness.
I agree there, and I think that's their business model, but since they are looking to get out of the gig and Va/Pers continue to sell massively, it's an opportunity for someone else.
Please remember that Mr. Motzek is one of the very few official and licensed producers of tobacco. Here in Germany the government has an iron fist upon alcohol and tobacco production. It´s not just about finding someone to take over their shop. He will have to deal with the tax authorities to get an official permission to produce tobacco. This will be a major hassle and might not be worthwhile for a lot of interested parties!
It is the demand which creates the tension and stress. The question is: "Can a 'mom and pop' endure the pressure of increased demand?" You are over simplifying the situation and leaving the human element out of the equation. Business models are just that, models. Personalities cannot be left out of the real world decision which may be required. The pressure may simply dictate that they quit in order to keep the union intact. If "mom" or "pop" are uncomfortable with the increased demand and think that it is time to close up shop, not dissolve the partnership, just simply get on with life after tobacco, what are the chances the business, without one or the other partner, each of which is integral to the sucess of the business, survives.
Further, if one or both see the business as very personal, successful only because of their involvement, knowledge, technique, and "parent" like oversight, the only option is to shut the doors. They are not going to sell their "child" to anyone. All of which was caused by the pressure of consumer demand.
Many MBAs fail because they are unable to apply what they learned to real world situations. One must take what was spoon fed and fit it to work in the world made up of human sensitivities and concerns. Some businesses are not business, they are labors of love. Few MBAs, professors, economists, etc. understand or apply the human element to business.
Further, if one or both see the business as very personal, successful only because of their involvement, knowledge, technique, and "parent" like oversight, the only option is to shut the doors. They are not going to sell their "child" to anyone. All of which was caused by the pressure of consumer demand.
Many MBAs fail because they are unable to apply what they learned to real world situations. One must take what was spoon fed and fit it to work in the world made up of human sensitivities and concerns. Some businesses are not business, they are labors of love. Few MBAs, professors, economists, etc. understand or apply the human element to business.
Then the brand will be sold and produced somewhere else that's business-friendly...
I agree, but they're still responsive to market forces.
Education is universally like this, which is why some of the smartest people skip it.
The smartest may skip a formal education ( A terrible generalization). The wisest do not. They get one, adapt it, use it and prosper. Some learn on their own. Others never do. A lot of the "smartest" may skip it, get some success, then hire the MBAs for management realizing they may be entrepreneurs and are not business oriented. Those types make the MBAs rich.
That's the beauty of the labors of love. They can ignore market forces completely and still be successful as far as the owners are concerned. They do not have to be profitable, only satisfy the emotional and/or economic needs. Some do not even have to break even, might operate at a loss, the consumer might never know. It's not a charity in the strictest sense of the word. It's a labor of love the owner is comfortable with, possibly funding the enterprise from other income. Economists, MBAs, etc. have no concept of such. They are anomalies in the business world, usually ignored.
That's the beauty of the labors of love. They can ignore market forces completely and still be successful as far as the owners are concerned. They do not have to be profitable, only satisfy the emotional and/or economic needs. Some do not even have to break even, might operate at a loss, the consumer might never know. It's not a charity in the strictest sense of the word. It's a labor of love the owner is comfortable with, possibly funding the enterprise from other income. Economists, MBAs, etc. have no concept of such. They are anomalies in the business world, usually ignored.
I'm not sure of your definition of "elites" or how obedience enters into the discussion. Successful business people usually, I say usually, live by the adage; "Whales only get harpooned when they surface to spout." And, the ones I know are very self-disciplined and goal oriented.
Everyone hears of the Trumps, Gates, etc. How many of us know the names of all the Microsoft made billionaires who do not run around touting their largess and success? Only someone who reads Forbes could probably reel off the names of the 1800+ on the list. I read it. Didn't memorize the list and know of a couple who are not known by Forbes. I suspect there are many such.
Everyone hears of the Trumps, Gates, etc. How many of us know the names of all the Microsoft made billionaires who do not run around touting their largess and success? Only someone who reads Forbes could probably reel off the names of the 1800+ on the list. I read it. Didn't memorize the list and know of a couple who are not known by Forbes. I suspect there are many such.
He says that he is 70 and wants to retire. Probably he just wants to sit and enjoy his life including his pipe, that's all. Why to make things complicated when one just wants a simple retirement?
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