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If you can't succeed because somebody made a low effort, low quality copy of your product, then you don't deserve to make money. Especially in light of the fact
by toasterlovin 7y ago
If you can't succeed because somebody made a low effort, low quality copy of your product, then you don't deserve to make money. Especially in light of the fact that Coke has been around for 150 years and is essentially just sugar water.
- ses1984 7y agoCoke actually has regulatory protections in place. They can use flavor extracted from coca plant through a special arrangement with the dea. Anyway they sell all kinds of varieties of sugar water, and the margins are extremely thin.
- cortesoft 7y agoI mean, the law itself doesn't say only Coca-Cola can use the coca leaves.... they just have an exclusive deal with the only company that is licensed to import it.
- awshepard 7y agoDoes that sort of regulatory capture accomplish the same effect though? If you're a competitor in the space, you'd either a) not have any access to an ingredient you want, or b) would have to go through the trouble of finding a new company to import it AND get them licensed (which I assume is likely a difficult thing to do). To an extent, the barrier to entry could end up so high that it's effectively _as if _ Coca-Cola has a legal stranglehold.
- cortesoft 7y agoYes, it does. Just pointing out that Coca Cola isn't named in the law.
- wolco 7y agoDid I read that correctly. The margin on coke are thin?
- ses1984 7y agoIf you think the margins aren't thin, why don't you swoop in and undercut them?
- likpok 7y agoThe specific flavor/process of coke is protected, but you can get pretty close outside of that. Their other products are often indistinguishable (e.g. sprite/sierra mist). The value there is the brand, not the specific flavor. The special dispensation for Coke works on a branding level: "we have a special process dating back to 1890".
- CamelCaseName 7y agoI'm not sure if this is how you're defining brand, but the real value is in their exclusivity agreements with restaurants and (some) grocers. This is the reason any restaurant that doesn't just resell soft drinks they bought at the grocery store only sells either Pepsi / Coca-Cola. It would be really interesting to see what kind of rates major chains/conglomerates (E.g. McDonalds, Subway, 3G, Recipe Unlimited, etc.) get for their soft drinks as these guys are big enough that they can probably push their own soft drinks and really bite into Coca-Cola/Pepsi's turf.
- toasterlovin 7y agoFWIW, the exclusivity agreements only work because they interact in a virtuous cycle with the incredible amount of effort Coca-Cola has put into building their brand with consumers. Nobody signs exclusivity agreements with PC Cola[0]. [0]: http://www.presidentschoice.ca/en_CA/products/productlisting/pc_cola3933.html http://www.presidentschoice.ca/en_CA/products/productlisting...
- opencl 7y agoWendy's does have their own "Dave's Sodas" brand.
- dobleboble 7y agoMargins are thin? "Coca-Cola's latest twelve months Net Income Margin % is 23.1%." "Coca-Cola's Net Income Margin % for fiscal years ending Dec, 2014 to 2018 averaged 14.3%." https://finbox.com/KO/explorer/ni_margin https://finbox.com/KO/explorer/ni_margin
- supercanuck 7y agoThey split off Coca Cola Enterprises to achieve this. https://en.wikipedia.org/wiki/Coca-Cola_Enterprises https://en.wikipedia.org/wiki/Coca-Cola_Enterprises
- gist 7y ago> Coke has been around for 150 years and is essentially just sugar water. Coke is still around (primarily) because of tremendous money spent on marketing and tremendous money spent on owning the channel of distribution of their products (where 'own' means defacto by how they operate).
- toasterlovin 7y agoExactly my point. Figure out how to build a business that can withstand having its products copied.
- raz32dust 7y agoThis is a very simplistic view. (a) Patent litigations can cost a lot of money, and small companies might not be able to fight big ones. (b) Some products are more easily patentable than others. The current situation is definitely not great for innovation or creativity.
- toasterlovin 7y agoMost companies build a moat with something other than patents. Brand, scale, distribution networks, etc.
- rutierut 7y agoI largely agree with your point but I think your example could have been better, companies like CC but a better example would be Red Bull could easily be switched out for a cheap clone and not suffer much in revenue, Red Bull has no superior quality but it's the brand that sells.
- Chris2048 7y agoRed bull tastes better than a lot of others.
- benologist 7y agoAmazon has copied 50,000+ items, some open source, some proprietary SaaS, they surely weren't all garbage undeserving of success. Predatory platforms might be the actual problem.
- toasterlovin 7y agoFWIW, it seems like you're referring to software. I'm commenting solely on their retail business (and that's what the linked article is about).
- benologist 7y agoThe 50,000+ items are physical things across their many brands, they're facing an antitrust action in the EU for the possibility sales data is the deciding factor for what to copy. http://europa.eu/rapid/press-release_IP-19-4291_en.htm http://europa.eu/rapid/press-release_IP-19-4291_en.htm
- toasterlovin 7y agoFWIW, every major retailer can use the exact same data about in-store sales to determine which products to private label.
- ajhurliman 7y agoSource?
- sdan 7y agoAWS
- ApolloFortyNine 7y agoLicenses to stop 'software as a service' from being able to make changes without publishing them back have been around since 2002 [1]. You can hardly develop open source software and then be shocked when someone goes ahead and uses it within their rights. [1] https://en.wikipedia.org/wiki/Affero_General_Public_License https://en.wikipedia.org/wiki/Affero_General_Public_License
- twblalock 7y agoThis is especially true in the fashion industry, and even more especially true in the shoe industry. Amazon isn't the only company that makes shoes that look like Allbirds. All the shoe companies rip each other off.
- vernie 7y ago...in fact you should probably just hurry up and die!
- jariel 7y agoNo, it's why trademark and copyright exist. Nobody is complaining that Amazon can 'make better shoes'. The issue is about copying design.
- _iyig 7y agoWhat if the person who copies you also controls the marketplace, and prioritizes their copy above your original? That seems much closer to what Amazon is doing.
- Spivak 7y agoNo different than Walmart prioritizing their store brand which explicitly copy the branding of other products ("woah, there's no way that isn't butter"). If you cant get your customers to seek you out directly then you don't have a brand. As a consumer I like when store brands do this. It tells me what they're trying to impersonate more than the "compare to XXX" in teeny tiny print. But they're just a brand like anything else on the shelf -- Kroger pretzels are better than Rolled Gold, but their sandwich cookies are much worse than Oreo.
- giarc 7y agoI did a search on both Amazon.com and Amazon.ca but couldn't find any Amazon Basic shoes that matched Allbirds. I also didn't listen to the podcast, so I must have missed it.