Tests for Direct Buy and other Intermediate Company Operations

1.   One simpl test is to try a booking for a hotel via say Expedia or Priceline. Then use the relevant hotel or resort directly adn ask for promotions available. 

2.   For airlines do the same and you will see that the inermediate companies are actually ripping you off via what they call taxes and Booking charges.

Why is that?

The reason is very simple. There are companies that actually produce and sell a service or producr. As you can see these companies are actualy buying and selling real resoucescs to make a product or sevice and are actually involved with the product or service. They typically have their own networks to market and sell their serives and products. Some of their selling and marketing networks can be quite elaborate and extensive. But it is critical to note that it is vitually impossible to beat their sales network by some bulk or other buying. This is because then they would themselves be doing the same. Example: You can buy a chevy at a dealership or another vendor. But the vendor is not going to be able to beat the dealer price for a new car. Try it out.

And then there are companies taht really don't produce anything but are just brain childs of modern day programmers and app writers. They simply take the products and services of the existing compamies, present them in a convenient format for you to look at. Basically they are making money using your laziness. So they go to the airelines and collect the flight inormation and buy X number of seats and hope to make a profit in the process. The idea is that the actual vendor is able to get rid of a block of flights wihtout having to make an effort to sell them and then get their money upfront and the inforamtion-hasher gets a decent profit without ever having to setup a fatory, the distribution and marketing. 

So what is this all about. Very simple. It is someone's laziness. Try out expedia or Priceline. They got big doing nothing and built on peoples' laziness! If they were that good they would not have to advertise as heavily as do. Does Delta or American advertise their products heavily? Of course not. They don't have to since they actually have a product to sell. Does Honeywell or Boing advertise haeavily? I think you got the idea. So here we just learned a rule to identify companies are doing something and others that are thriving on your laziness.

Hussain Rule of marketing:

If a company advertises heavily it does not have a genuine product or a good product . Their product is only conceptual and is not that good from the usability point of view or the financial point of view. Avoid such companies as much as possible. They are basiclly compensating for their flawed or substandard product via a heavy dose of concept (advertising ) which is basicaly brain washing. Here are some examples.

Try the chicken sandwich from Mcdonald's and Wendy's. Wendys beats Mcdonald's hands down. It is bigger, it is a better piece of chicken breast and is better cooked and has a better tasing sause. But Mcdonld's is a bigger entity than Wendy's. That is because of their heavy dosage of advertising. You can test out the 2 sandwiches. And I I never eat fast food anyway except when I have no choice. And I never eat a hamburger in particular.

Here is another example:

Have you seen the ads run by Expeida and Priceline. But the products they sell are not made by them and the makers of the producrts, that is the hotels and airlines have fully developed channels of their own. Do they advertise as heavily as Priceline and Expedia? Many times I have beaten their prices by goig directly to the service provider and not the middle man. Which leads me to the second Hussain rule of marketing.

The price that you pay for anything must be the price that you canot procure. Let me explain. 

I went to Home Depot looking for a smoke detector. The one I saw at Menards was a dollar cheaper than at Home Depot. I asked the guy at home depot:

If I can sell you the detector for 50 cents less than what you are selling would you buy from me? The guy says but Sir we ar selling them. We don't need to buy them 

I said I understand that but I can bring you these detectors for less than your published price. I can take my car to Menards and buy a whole heap of them and sell you for less than your price. The guy thought I was crazy and dismissed the whole argument.

But the point is that you should not be selling something at a price at which the prospective buyer can sell you the same thing. You either pitch me or I pitch you. But not both! That is the whole point of a market system and is ancient in origin and the very reason for there to be market for something, anywhere, at any time.! Of course there is always the convenience argument. But the fact remains that a lot of companies are actually parasites on the body economique of the producing companies. And their CEO's are simply bean counters and clerks looking for flaws in the maketing system and teh varieties your laziness to come up new useless intermediate products to get into your pocket. 

You can save yourself a lot of money by doing some simple research and buy directly from the service providers and not the parasites that have gotten big doing nothing at all.