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IT’S BETTER TO OWN A MARKET, NOT A MILL


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  Mills (a.k.a. factories, production plants) do not sell things; they make things. If no one buys what the mill makes, and no one sells what the mill makes, the mills stop making. A market is a customer or any number of customers that buy or borrow or rent or lease things. Markets are the source of revenues. Mills need markets to exist.

 Mills don’t generate revenues; they spend money. Mills buy materials, parts, labour, energy, and services. Mills are immensely important. If they don’t make detect-free quality products, on time, at low costs, the owner of the mill will not stay competitive. But mills do not make money; they make things that are sold. If the products are sold at a price above cost, the company makes money.

 It is the sale that makes money! Some mill managers, and some management, mistakenly think that mills make their company money. Mills are often critical to the ultimate making of money, but the money is only made when someone sells the product at a profit, and when the selling company collects the money.

 Nike owns a market; it doesn’t own any factories. Nike’s products are made for Nike according to strict specifications. Nike buys its shoes from the shoemaker and resells the shoes to its markets.  (Nike’s shoemakers also own a market––Nike!) Dell computer owns a market, and it sells lots of computers, but it does not make computers. Taco Bells owns a market to which it sells millions of tacos and burritos, yet Taco Bell does not make tacos.

 Markets are fluid. They change in a million ways every day. Mills are hard to move. Mills can be mausoleums or monuments, as are those that line Ikeja, Lagos or Agbara, Ogun State,  Nigeria. Mills are not fluid; they are not easily changeable. Markets want a fast response. Mills move slowly.

 The road to profits, to marketing success, starts with the customer, the market. The most important factor success in business is having a customer. Markets make mills. Mills don’t make markets. Mills make what markets want. When a mill makes a product without having a market or makes what a market does not want, the results are (1) no mill revenue; (2) unsalable costly inventory; and (3) mill-a-bye-bye!

 Mills and mill workers are the backbone of making things. But they do not inherently make money. If you own a mill, you should, as much as possible, treat it as a competitive outside supplier competing for your business on the basis of quality, cost, delivery, and service.

 Markets––the consumers––are still buying cotton, and longtime cotton sellers are still selling cotton, but cotton mills are in mothballs.

 Marketing superstars focus, focus, and focus on what their market wants. If delivering what the market wants depends on a mill, make sure it’s a marketing mill, not an old-fashioned manufacturing mill.

 Markets, not mills, mean money in the cash register.

Bernard TaiwoBernard Taiwo
Bernard Taiwo
I am Management strategist, Editor and Publisher.

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