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Re: Hosta Availability

  • Subject: Re: Hosta Availability
  • From: "Andrew Lietzow" <andrewl@hostahaven.com>
  • Date: Tue, 5 Jun 2001 21:14:34 -0500

Hi Bob,
A while back, I conducted an informal survey of all retail growers that were
members of the AHGA who had an email address.  The subject was regarding
access to wholesale price lists on the internet and whether retail vendors
thought this to be a good business practice.   I'd be glad to share those
results with you if you are a member of the AHGA or even the IHGA (Iowa
Hosta Growers Association).

Some people believe that publication of a wholesale price list, such that
the general public has ready access to that list, is NOT a bad business
practice.  I happen to strongly disagree.  There are very few industries
where this does not adversely affect the business of the customer to whom
the wholesaler is marketing/selling their product.  Why do they want to harm
their own customers by letting any person on the street know what their
dealers pay for their product?  I don't believe it takes an MBA to know this
is probably not a good business strategy.

Most consumers don't have enough information to understand how the pricing
structures for various products are established and why in one industry
standard markups are 25% but in others they are 1000%.   Fortunately, most
wholesalers in the nursery trade password protect this information,
believing that such price lists should remain confidential to the
dealer/customers of that wholesaler.

In general, I operate within the framework of an accounting principle called
the "need to know" principle.   I don't believe that making such lists
available to the general public is a good, long-term business strategy and I
am not alone.  Jim knows this but chooses to ignore it.  It's a free country
so he can adopt any practice he wishes.

As for the market potential for domestic Hosta sales being 285 million, I'm
thinking the number is considerably smaller, but am willing to concede that
the number is quite large.  Even as a commercial grower, I would be remiss
to believe I would be anything other than a buyer to most of the people on
the Hosta lists to which I have belonged.  However, I can tell you that no
matter what the industry, if I as a buyer  know what you as a seller paid
for your product, I've already got a leg up on you in the negotiations.

Many growers treat this market like the entire market is a pure competition
market, with the sellers being "price takers" rather than "price makers".
While this may be true for the hundreds of commodity product Hostas, it is
not true for the higher-end plants. That market is an oligopsony and the
hybridizers know this.  I had a contact today who wanted to purchase a
streaked, H. Breeder's Choice.  For that plant, I'm a price maker because I
only have two and I'm not anxious to sell either one of them.

Bob, for most humans, it is like Pogo said, "We have met the enemy and they
is us".  At least I think that is what he said...

Hosta la Vista!

Andrew Lietzow, MBA
#1 Plantsman at http://HostaHaven.com
1250 41st Street
Des Moines, IA 50311-2516

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