Where Is the Money Really Being Made?

                                                                   

In any industry there is usually a sweet spot or two, where the best money is made. 
They may be able to have control over key terms like pricing and payment terms.  Meanwhile, in some other segments of the industry, the margins could be very slim and highly competitive.

The segments can vary by industry, but here are some suggestions:

·         Inventors

·         Raw Material Supplier

·         Raw Material Distributor

·         Manufacturer

·         Shipping/Logistics Firms

·         Distributor

·         Retailer

Let’s say you look at an industry and you determine that the manufacturers are making the best money.   There can still be another deeper cut.  Where is the money made within the manufacturing segment:

1.       Company

2.       Employees

3.       Sales Reps

4.       Investors

5.       Bankers

The answers can be quite revealing.  It might be out of sync-the players putting up the most capital or taking on the most product/service risks might not be making the best money.

The answer can change over the course of time.  Manufacturers might make the best money in the early and middle stages of an industry.  Later on though, too much capacity could be added and prices might fall.  Meanwhile employees have become more entrenched.  The manufacturers and investors might be losing money.  The best money might be made by employees.

How about your industry? 
                    Are you in the sweet spot? 
                                   If not, what might you do to change your position?

 

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