One of the eight factors that impact the value of your company is something the team at The Value Builder System refers to as \u201cThe Switzerland Structure,\u201d which emphasizes the importance of business independence. It cautions against excessive reliance on any single entity, whether suppliers, employees, or customers. While many business owners recognize the risks associated with dependency on a high-profile customer or employee, the hazards of anchoring to a single supplier are often overlooked.<\/p>\n\n\n\n
Supplier dependency comes in many flavors, but the most destructive is a dependency on a single marketing supplier for sales leads, such as a dominant e-commerce site or social media platform. <\/p>\n\n\n\n
How Chad Maghielse Improved His Score on the Switzerland Structure <\/strong>\u200b Maghielse expanded to another e-commerce platform, Chewy.com, and launched his own online store. This strategy reduced Amazon\u2019s share of his sales to 65%, while Chewy and his store contributed 30% and 5%, respectively. A significant reduction in his business\u2019s platform risk and an increase in its appeal to potential buyers resulted from this strategic shift.<\/p>\n\n\n\n Thanks in part to Maghielse\u2019s diversification strategy, Pets Are Kids Too was acquired in a deal that valued the company at three times its EBITDA, with a substantial portion paid up front. Maghielse\u2019s journey highlights the critical insight that diversification not only shields against market volatility but also enhances a business\u2019s overall value.<\/p>\n\n\n\n 6 Ways Marketing Supplier Dependency Cuts Your Value<\/strong>\u200b Embracing the Mentality of the Swiss <\/strong>\u200b One of the eight factors that impact the value of your company is something the team at The Value Builder System refers to as \u201cThe Switzerland Structure,\u201d which emphasizes the importance of business independence. It cautions against excessive reliance on any single entity, whether suppliers, employees, or customers. While many business owners recognize the risks …<\/p>\n","protected":false},"author":2,"featured_media":2496,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_wp_convertkit_post_meta":{"form":"-1","landing_page":"","tag":"0","restrict_content":"0"},"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15],"tags":[],"mai_display":[],"class_list":["type-post","category-value-building","entry"],"yoast_head":"\n
Chad Maghielse\u2019s company, Pets Are Kids Too, originated with a simple spray to help improve his dog\u2019s breath and swiftly expanded to over $2 million in sales with a 35% profit margin within three years, relying solely on Amazon. Recognizing the risks of this dependence on the e-commerce giant, Maghielse embarked on a path of supplier diversification.<\/p>\n\n\n\n
\u200bAmazon, for instance, is a prime example where businesses heavily invest to gain market access and visibility. However, dependence on a single sales platform like Amazon can devalue a business in the eyes of investors or acquirers for several reasons:<\/p>\n\n\n\n\n
Reducing your reliance on a single marketing supplier not only bolsters your company\u2019s market resilience but also notably increases its value. Adopting a Swiss-style mindset, which values independence and strategic autonomy, is more than a tactical move; it is a key strategy for achieving sustainable growth and boosting the value of your business in the long run.<\/p>\n","protected":false},"excerpt":{"rendered":"